Mailbag: Repeat Exam Takers – Tips & Strategies

hi steve
i read your csc experience on facebook recently, and found it helpful…wish i had read it earlier, beacuse i recently did my first attempt on the csc vol 1, and failed…i was wondering if you could give me some advice on how to pass it this time…i found it really hard, and i know u wrote it while ago, but if u remember anything about it that could help me it would be greatly appreciated

cheers

…(read more)

The Conduct & Practices Handbook

I will be leaving this blog open for future reference as I am now complete the CSC and moving on to the Conduct & Practices Handbook (CPH) course offered by the Canadian Securities Institute (CSI).  I am also documenting this process on a seperate blog that you can check out here:

CONDUCT & PRACTICES HANDBOOK (CPH) BLOG

I’m Officially Done the CSC

I just received my second exam results back, did much better on the second exam then the first one.  I have to say it was a sight of relief when I saw the “Complete” underneath the registration tab on my personal menu.  It’s just another thing complete, and it does feel good to have done.  I contacted CSC to see how long the certificate normally takes to ship out.  The estimated time was between 4 and 6 weeks, so I’m guessing around mid-April.  For those of you who may be ordering frames from CSI, you may be interested to know that they don’t ship with the diploma.  The CSI representative told me that the frames ship separately from the certificate, and the time frame for a frame to delivery is roughly 2 weeks.  They are charging around $70 for a $30 frame, not including shipping.

I am waiting until late June when I register for the Wealth Management Essentials (WME) course to order the updates CSC text.  There is a small story behind this.  I found out that CSC was finalizing a updated textbook to be released late January, early February.  These dates were way to late for me, so I studies off the online textbook instead, and decided to order the hard copy book when I signed up in later courses.  I like having reference materials in hard copy format, and the low cost of a book compared to printing it myself seems worthwhile.  I made sure to get the updated 2009 hard copy CPH materials, which I am currently going through.

Overall, I found the CSC to be an excellent introductory course into finance, that exposed me to a variety of different sections in the financial services industry.  While this was an advantage for those seeking general knowledge of the industries primary component, I also found this approach to be quite arbitrary, vague and narrow in scope.  The first volume of the book had essential components that will be required throughout your studies, and with the exception of chapter 12, were all extremely useful to me.  I did find that separating chapter 12 from 13 and 14 was perplexing, given that they both speak to the same specific component; financial statement analysis.  Also I found the second volumes chapters to be stretched out, as if they were trying to fill the information in to make it worthwhile.  The chapters on segregated funds and mutual funds could have easily been placed into a larger chapter with more streamlining of contents.  The same goes for hedge funds and other managed products.  I found a lot of this information was repetitive, or simply just taking up space.

Overall I did find the second exam easier than the first, but probably not in the way you think.  What did it for me was, by the time I had taken 1 CSC exam and read the first 12 chapters, I was way more acquainted with the CSC writing style and testing style, than I was the first go around.  So although the material was similar in difficulty throughout most of the key chapters, I think my technique improved causing me to believe the second exam was easier.  Overall, I think both exams are challenging and require a good degree of comprehension.

My advice for those enrolled or planning on enrolling in the Canadian Securities Course (CSC) is to focus on understanding the key concepts, and worry less about calculations and memorization of definitions.  The materials in the bonds and financial statement sections were pivotal to success in the second half of the course.  Furthermore, I felt economics for the time required of study, was far to undervalued on the exam and not worth considerable time.  Overall, if you commit to a study routine and exam content comprehension, you will have no trouble passing this exam.  Don’t confuse comprehension with the basic concept of “easy”, that is thrown around far to often in relation to this course.

Be diligent, prepared and focus on the material at hand and you will find that, although the exam is challenging, you can excel if you have prepared properly.  I highly advise against straight memorization or trying to “game” the exam.  This will just cost you time and money in the end.  I hope this blog can be of some use to people taking this exam in the future, as I have tried to pack as much content and information in here as I could in the short time I took this course.  I will now be moving over to the CPH blog (link in the sidebar) for two short weeks, at which point I will then move to a more permanent home on my CFA blog (link in sidebar).

It’s been fun,

– Steve

Why Multiple Designations is NOT a Waste of Money/Time

I thought that, before I wrapped up this blog with my final post I would leave you with an overview of where this is all going.  The CSC is just one of many, many courses that I plan on taking over the next couple years as I continue my education in finance.  I’m reluctant to post this information, as many people coin the term “chasing letters” all to often.  The term chasing letters refers to individuals who, instead of gaining experience, gain education. The argument against these individuals is that there enormous breadth of knowledge is useless because they have no ability to apply this knowledge in a  real world situation.  As for my own opinion, I believe that there are multiple sides to this story.  Firstly, there are the individuals who seem to be envious of those with higher credentials and greater job prospects then them, so they feel the need to categorize they people as over-educated and under-qualified individuals.  The second is that, there are those individuals who think amassing an array of letters under there name but not acquiring the practical skills and networks needed for success in the workplace, will give them an added advantage.  Trying to put either in black and white terms seems to be kind of childish and irrelevant to the broader picture.

The point here is that neither extreme is very beneficial to either party.  A degree of balance and hard work does, however, set you apart from a large number of people.  Setting realistic goals and obtaining knowledge AND experience will allow you to be successful in any career.  This is why it bothers me when people believe a PhD or a MBA is just a waste of money.  Again, at 22 or even 24, a MBA in business doesn’t make a lot of sense.  But what about graduate studies for law, philosophy, medicine and so on.  What about for a up and coming executive.  Companies make 5, 10 and 15 year plans and start working slowly on them now.  Individuals who do the same have a better chance of succeeding at those objectives. Think of it this way.  A lot of experience when your older is almost a given, but a lot of education when your older is not.  The same is true if we flip this scenario; A lot of education when your younger is a given, but a lot of experience when your younger is not.

So you tend to be more educated and less experienced when you are younger, and more experienced and less educated when you are older.  This is not to say that you become less knowledgeable as you grow older, but taking all things aside, typically experience grows more then education as time goes on.  Therefore, when you reach career milestone ages like 30, 40 and even 50 your experience is growing at a steady pace while your education is not.  So if you can remove yourself from the scenario and understand that, at some point, those certifications,designations, degrees and diplomas will have value in your later years, you now understand the concept behind aggressive educational pursuits.

What I’m trying to say here is that, investments in education can truly pay off with the right combination of experience.  For me, giving up either one makes little to no sense.  If I am able to achieve needed experience in a variety of fields, make connections with a variety of people and do my time in my early years at work, while also significantly increasing my educational experience and qualifications on the side, I have now positioned myself as an asset to a company, or a set of companies.

Amassing the letters that accompany the enrollment in a recognized financial designation should not be a primary outcome, rather a consequential one.  Taking a course such as the CFA forces you to comprehend the material in relation to Financial Analysis in such a way not possible with general experience.  This also offers you opportunities to practice those new found skills in areas of increasing responsibilities.  I just wanted to type this  post out to illustrate my thoughts on the continuing education goals me and some of my other colleagues have set for ourselves.  I think it is unfair to discount the usefulness of a broadly based educational background coupled with an increasing level of work experience in your related field.

With that being said, I am going to post my study plans next, to give you an idea of what I’m talking about and what you can do after completion of the CSC.

Done the CSC? What’s Next for You?

So you polished off the CSC, and now you have many different options.  A lot of people choose to polish off the Client & Practices Handbook course, which is another regulatory requirement to trade stocks and bonds (see IIROC‘s website).  You have to ask yourself in which direction you want to go.  I would recommend signing up for and completing the CPH, as it is smaller and more common sense then the CSC.  It should increase your value in the hands of the employer, and increase your knowledge.

I would also give some though to a long term goal like the CFA, CFP, CAIA….etc.  These designations truly set you apart from the crowd, but be diligent in your approach to these courses, as they are no cake walk.  As for me, well I write my CPh exam in under 12 days.  I start studying tomorrow, so if your interested, head on over to the CPH blog I have set up.  A link to it is in the sidebar.  I hope to provide a similar experience on tat blog as I have here, just more consistently.  Take the time to ask yourself questions of where you want to be in the short and long term, and address these needs now.  Proactive planning can do a lot for your financial future.

– Steve

A Quick Note About Bonds…..

I just wanted to say a quick word about bonds.  Volume 1 has a entire chapter dedicated to bonds, which at the time seems a tad out of place.  However, if you read the whole book in one pass you would realize that bonds plays a huge part in the entire CSC course.  Everything seems to in one way or another go back to bonds at some point.  Of course equities also play a large role, but they are not nearly as complicated as bonds are.  Make sure you master the concept of the inverted relationship between bonds and interest rates as well as the volatility characteristics of bonds in certain market conditions.  If you can really nail down the concepts in the bonds chapter, you will be much better off in further chapters.

– Steve

Exam Techniques for CSC-L2

I thought I would revise the CSC-L1 exam techniques a bit to reflect my experiences with the second CSC exam. These are some of the exam techniques I used to CSC-L2 that may help you:

• Spend less time calculating the formulas and more time understanding what they mean; this particular exam seems to emphasize the understanding of what the final number in the formulas mean, more than how to calculate that number.
• Focus on the portfolio management process, taxation and the mutual funds section.  These comprise a huge section of the exam.
• Understand the material, don’t just memorize it.
• Although the chapters on segregated funds, other managed products, hedge funds and so forth were interesting, they didn’t seem to play a huge part

Be prepared.  This exam was difficult, and definately not easier then the first exam as some people have indicated.  There are more complicated mathematical formulas here, and a lot of minute important details.  Definately don’t take this exam lightly.

The Most Difficult Concepts of the CSC (according to me)

To help give prospective students of the CSC a general idea of what is in store for them, I have comprised this list of the most difficult concepts of the Canadian Securities Course (CSC).  Of course, this list is subject to opinion and debate, but let it be a reference guide and an information source for your decision.  Keep in mind, the older this post is the more likely this content will be out of date.  CSC updates its book yearly, so anything beyond 2010 will likely be irrelevant.

• The standard measures of risk (variance, standard deviation, beta)
• The Dividend Discount Model
• The Four Types of Ratio Groupings (Liquidity, Risk-Analysis, Operating-Performance & Value Ratios)
• Any list that has to do with ethics (as it is extremely vauge)
• The concept of short selling
• The differences between Mutual Funds and Segregated funds
• The minute and specific details associated with taxation and different investment products
• Different fee structures for investment products
• The Sharpe ratio
• Bonds vs Interest Rates
• Inflation vs interest rates
• The Divided Discount model vs. the business/equity cycle

These are the topics that I spent the most time understanding.  I wouldn’t say they were “hard” per se, just the most difficult when compared to everything else.

– Steve

CPH & CSC Overlap?

I was flipping through the CPh book today and I realized that a large majority of the tables and figures in the first 100 or so pages were identical to the figures/tables in chapter 23 of the Canadian Securities Course.  I will confirm this on the CPH blog later in the week, but I thought it was worth mentioning it here for people considering taking the CPH later.  The overlap obviously means less work and better retention in the exam, and gives you a general overview of what to expect with the CPH.  I also notices that an entire chapter on securities regulation had similar content to the securities regulation in volume 1 of the CSC.  There may be a good chance that the overlap between the two courses are significant, which will bode well for those who want to get them out of the way at the same time.

I’ll keep you update over at the CPH blog on this development.

– Steve

I’m Overwhelmed!! How Am I Going to Learn All This Material?

If your asking yourself this, then your human.  Don’t worry its not as hard as it looks.  The best way to work through a large amount of material is by breaking it down into smaller chunks.  First, aim to complete 1 chapter a day for at least 3 days out of a week.  That is a reasonable pace, but a higher pace is recommended if your unemployed or have additional time to spare.  Next, Start on the first chapter and purchase sticky note tabs.  Tab out each of the primary sections (typically 4- 6) for the first chapter and then start reading.  Once you get to the end of the first tab, you’ve accomplished a section.  Now you can move onto the next tab.  Not only does this make things more manageable, but it forces you to recognize transitions in topics and bridges between materials.  This is a highly effective way of managing a large amount of information.

Remember to follow the three basic principles of learning mentioned in my last post: learn, apply, review.  They go by different names sometimes, but they all refer to the same process.  Go through the material, try out the material, and then go back and review the material.  Think of it as a revolving door which you keep going around and around until your ready to go.  Don’t measure yourself with time, measure yourself with your ability to comprehend the material being presented to you in a reasonable manner.  One key point is to shake bad habits.  High school and college teach us how to memorize and regurgitate what is in books.  This is not a skill, and it will not help you in this field.  You may be able to squeak by a entry level course like the CSC by memorizing paragraphs, but you are more then likely to feel the disadvantages to this approach later on in your career.  Learn from the material, understand it and apply it.