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

My Personal Educational Goals

I have set out a 6 year educational time-line for which I want to complete a number of objectives.  Immediately, the skeptic in most people come out when they here 6 years.  Most people can’t stick to a 2 week diet, so that is understandable.  However, if you understood the nature of the finance industry and some of its more prestigious goals, you wouldn’t be all shocked to hear someone mention a 6 or even a 10 year educational goal layout.  Consider the fact that the minimum amount of time to achieve a CFA designation is 2.5 years.  However, the Level 2 and 3 exams are only offered once every year.  Which means to achieve the 2.5 mark, you have to complete Level 1 In December, and Level 2 6 months later.  This is usually a takes most people don’t have to much luck with, though it’s not impossible by any means. Furthermore, the CFA requires at a minimum, 4 years of related work experience.  So just for one program, and three letters you need to complete three extremely hard exams and have 4 years work experience.  Putting it all together you are likely to spend 3 – 4 years completing this program, assuming you don’t fail any of the tests which is highly probable that you will (pass rates are 35% and falling).  This is just one designation, although a very respected one at that.  What if you wanted two? Why would you want two?  Well, without getting into a whole post about the importance of educational diversification, lets just say two is better than one.  We don’t have to argue about not enough experience anymore, since most respected programs require minimum work experience of 2 years and up.

This is the best way I can put it.  If you understand how hard it is to obtain a CFA Charter, with all the requirement, how impressive would if be if a person, while obtaining relevant work experience had both the CFA and another equally difficult designation.  What about a person with three.  Would you say this person was knowledgeable? Able to manage strict time constraints, deadlines and projects while achieving multiple objectives? I would say an individual who is under 30 and has a CFA charter among other credentials and experience is a very talented individual indeed.  My opinion aside, I plan to follow a sequantial path to obtain a broad array of educational designations so that I am able to move between job functions within a company and gain practical experience ina variety of financial functions.

My 6 year plan is a little to detailed to put down here, so I will go over the first two years, and list the remaining designations in bullet form.  Year one involves completing of the introductory courses Canadian Securities Course (CSC) and Client and Practices Handbook (CPH).  This qualifies me to be registered as an Investment Adviser, if I so choose.  Also, the CSC is one of the prerequisite courses for both the Certified Financial Planner (CFP) and the Canadian Investment Manager (CIM) designations.  The CPH is both a regulatory requirement, and a prerequisite to the Fellowship of CSI (FCSI).  So in two short courses that are minimum requirements for entry into the financial services arena, I have also satisfied some course requirements for three separate designations.  If you do some in-depth research, you will realize that a lot of these courses are linked together across different certifications.

In June of 2009, I will write my first CFA exam, which I foresee as being extremely difficult.  After the CFA exam I have a short 6 months to complete the Wealth Management Essentials (WME) course offered by CSI as well as the WME – Financial Planning Supplement offered by the CSI.  The combination of these two courses with the CSC qualify me to write the Certified financial Planner final examination in June of 2010.  After June of 2010, I will be writing either the CIAI, or FRM exam in December.  Series 2 and three follow the two consecutive June’s after that.

Other designations I am looking to obtain over time:

• Ch.P
• CIM
• DMS, FCSI
• CAIA
• FRM
• MTI – Taxation Program

Of course, we are looking at 6 – 8 years before I have these, but if you can dedicate yourself to a long term goal much like post grads do for med school, you can achieve a highly impressive combination of education and experience. I am also aware that a plan is only as good as the actions supporting it.  I am also aware anything ambitious or above what the next guy is doing in a highly competitive industry such as this, will be frowned upon and judged.  Which I am fine with, as completing a plan like this is not an easy task. For me, personally, I think those who are willing to work for the opportunities presented to you, will be able to realize benefit above and beyond those who just settled for the norm.  Just my opinion, and it is, like everything else, likely to change and evolve over time.  I hope this post has been helpful in understanding my approach to continuing education in my career, and possibly given you some insights into your own goals and objectives.

Good luck,

Steve

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

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

CSC vs. CFA Part 2

I thought I would briefly revisit this topic before I switched blogs.  I am registered for the CFA June 2009 exam and I have just completed the second CSC exam, still awaiting my marks.  One of the questions people have is the difference between these two courses, and though I can’t really compare material difference until later I want to make a few things more clear:

CSC

• CSC is an entry level REQUIREMENT for the Canadian Securities Industry
• If you live anywhere but Canada, and do not plan on moving to Canada, getting the CSC makes absolutely no sense
• Think of the CSC as a high school diploma for the financial industry
• This is a two part exam, with no work experience requirements and can be completed any time within one year
• Almost anyone, who is anyone in the financial realm has this course, its not an asset, just a basic requirement

CFA

• CFA is a post-graduate program accepted worldwide
• The CFA is a respected worldwide designation and opens international doors around the world
• Think of the CFA as the PhD of the finance realm
• This is at minimum a 2.5 year program with three tests and minimum work experience requirements
• The CFA is a respected designation because it is very difficult to obtain.  The exam is extremely difficult and the process is intended to weed out everyone except those who are either extremely persistent or aptly suited to hold a CFA charter.

So whats the difference.  To best understand this, lets ask a different question.  What are the similarities?  Once I have a chance to further dive into the CFA material I will write a couple posts on the content similarities between the CSC and CFA.  I think it will be interesting to see the level of comprehension both levels provide.  You will be able to find that piece on my CFA site, which is currently on hold until I finish the CPH course on March 9th.

– Steve

Wording on the Exam

I thought i’d just quickly mention a very important part about the securities exam 1 and 2 that totally caught me off guard. I know i’ve mentioned this briefly a couple times, but I wanted to dedicate a small post to it so that some of you may be better prepared for whats ahead.  As you read through the material you may find that you think most of it is common sense, or fairly easy to understand.  This is not an illusion, as the material is laid out in a very logical way.  As you progress through the book, concepts begin to evolve that are built on previous concepts.  Before you get to confident though it is important to know what CSI will be testing you on, or in better terms, how they will be testing what you are reading.

Unlike other exams, a large part of both CSC exams is about comprehension.  There is no straight definition questions, rather, all of them require you to apply the concepts in some way.  With the math problems, the creators of the exam have figured out the four most likely combination of equations so that, even though you may get the right number, you may not have the right answer.  Use of the phrases “not”, except” and other command words are italicized, but easy to miss.  Furthermore the wording of the questions are intentionally packed with definitions and numbers, some which are relevant, some which are not.  I was surprised to learn that almost a third of both exams was reliant on your ability to take tests, that is, to identify common test tricks.  I don’t know that I am really on-board with the whole idea of the “trick question“, but I definitely think its a good idea to add comprehension into as many questions as possible.  Be prepared for a wordy test, and try to gain as much comprehension of the material as possible.

– Steve

Is the CSC Really Worth the Money?

This is another one of those subjective questions.  To me, it wasn’t about the money at all.  Whatever the CSC charged, unfortunately, I would have to pay.  As I have said many times before, it is like a prerequisite to the finance industry in Canada.  Don’t think of it as an investment or a choice even.  If your sure you want to be in the securities industry, this course is a must have.  It’s not a commodity, its not even debatable.  The course is frankly, essential.

With that being said, the amount of money you have to fork out for the CSC is actually quite reasonable compared to other offerings.  Most study from home courses offer a huge amount of resources to its students, so its not just 100% profit.  Ignoring hardcover materials, the CSC has to provide web hosting space, pay its staff (including the forum moderators), develop resources such as tests, new CSC check questions, revisions to the textbook and so on.  So although I am sure CSC profits from these courses, there is a degree of cost associated to them.  I will talk further about the goals of the CSC and the for profit nature of security educators in Canada.

Is the CSC really worth the money? Straight and simple; yes it is. Register, learn a bunch and be prepared to take many courses that are much more difficult than this one in the future.

– Steve

Mr. 22%

So, the other day when I went to write my second exam for the CSC I was sitting in my usual spot at the back of the room.  It was about 15 minutes until exam time and the room was mostly filled up with people, getting ready to write the exam.  Two individuals to the left of me where talking and I wasn’t paying much attention until one of the guys mentioned how he had failed the CFA.  Now, that is not a bad thing, as the CFA is a tough tough exam and only 35% passed this last year.  Unfortunately, my curiosity spiked so I started to listen into their talk about finance.  I wasn’t studying at this point, as is always the case 1 hour before the exam.  I like to let my brain rest and be sharp for game time. Anyways, as they got talking about finance and so on I recalled all of the other individuals and friends who I have personally talked shop with.

When talking about finance, its hard to avoid the topic of money.  So it’s inevitable that things like salaries come up in a discussion at some point. However, more and more I am running into these types of people in the field.  The type who tends to over-embellish their successes, or over-exaggerate their stories.  It’s ok for the first bit, you let them have there fun.  Eventually though, it becomes slightly annoying.  It’s one of my biggest pet peeves; claiming to have done something that you haven’t.  You take away the credit from people who have worked hard to get what you are claiming to have, when legitimately, you don’t have it.

You may be asking yourself, “how do you know what he says is the truth and isn’t the truth?” Well that requires the rest of the story.  So he’s talking to his buddy, going off about how in 5 years he will be making $150,000.  That’s the dream buddy, but unfortunately, not everyone will be making that much.  In fact median salaries for finance for the first 10 years are between $50 – $70.  Some people never break that mark, which is not a bad thing, its just a statistic.  I think the appeal of finance is the profit potential, but that potential lies in the experience, skill and knowledge of that individual as well as the opportunities he/she engages in.  So many factors determine success in finance, and in any field….not a designation or the fact you think your “power suite” will send you to the top of the corporate food chain.  Anyways, I sat there quietly looking down and preparing myself for the test as he went on about how he’s going to make all this money but he doesn’t want the stress.  I thought to myself, so you want all this money and success and power, but your telling me your going to demand that you don’t have to work for it? Stress is a natural part of any high paying job.  Do the math, its simple economics.  If a company is paying you a lot more then its average workforce, its because you are more important.  People getting paid that kind of salary will typically have more responsibility, and thus higher stress. Realistic expectations seems lost on so many people entering this field.

So the conversation went on and to different directions.  They got talking about their current jobs, and Mr. 22% started to say how he made 22% quarterly return on a bond fund for his clients.  At this point, I stopped being annoyed and felt slightly amused.  Not only was he lying to his “buddy” again, but he wasn’t even smart enough to know how to lie right.  I’ll tell you why. In order to trade bonds/stocks with a company you have to be registered with the province.  To be registered, you have to have completed the prerequisite courses for mutual funds (CSC) and bonds/stocks (CPH).  So here we are sitting in the CSC exam, and he is going on about his clients and how he made them money.  That makes me think either (a) he is trading illegally without his employers noticing (b) his employer is allowing him to trade illegally or (c) he is completely full of it.  I went with C, because employers tend to be strict about the whole licensing thing.  If they didn’t, and they got caught….there corporate licence to do business may be suspended or revoked.

The moral of this story wasn’t really about the guy who couldn’t tell the truth to save his life.  It was more about Mr. 22%, the guy everyone knows, the pathological liar.  The reputation of the finance industry since the bubble burst has dropped to all time lows, all because of people like Mr. 22%.  Unethical free-loaders who expect everything but are willing to give nothing.  It’s unfortunate that individuals like myself and others who have to deal with members of the public who group you into this lump sum category.  It is these people who give hard working individuals in this industry a really tough time.  This may seem harsh, and maybe it is.  But it’s something that is truly a pandemic as of late.  To say that I only knew a couple Mr. 22%’s would be an understatement. Of course, I didn’t say anything to either of them as it is not my place, nor is it my business to be eavesdropping in the first place. It does make me wonder what will happen to them in 10 years time.  Will they be multi-millionaire’s anyways?  Will my own opinions cause me to be lumped in with Mr. 22% for good reasoning? Everyone is entitled to their opinion, and freedom of speech allows you to say anything you want, free will is a wonderful thing. I just felt the need to tell this story as a representation of the Mr. 22% in all our lives.

– Steve

What Does the CSC Mean to My Employer?

Be it your current or future employer, the CSC is seen as a prerequisite to the finance industry in Canada. Taking the CSC isn’t necessarily going to increase your long term job potential, but it will open the doors in the short-term for you to make further inroads.  Think of the CSC as the high school diploma for the finance industry.  It’s a requirement and A LOT of people take it every year.  Don’t expect this course to help you stand out as an applicant, but expect it to help you achieve opportunities that will enable you to stand out in the future.  There is no quick fix in the finance realm.  The concept of turning $500 into $5 Million are few and far between.  The opportunity is there, but a single course such as the CSC is only the beginning.  Most individuals who take the CSC follow up with the Client and Practices Handbook to further there registration in their respective province.  From there, if you still wish to continue your education (and thus, your progress within the fields corporate ladder) you can start looking at things that will set you apart from the Masses.  Things like the Certified Financial Analyst (CFA) program will definitely do the trick, but is not for the faint of heart.  Other programs like CSI offered designations (C.hP, FCSI, CIM) are very popular in Canada.

So although the CSC is a necessity, it isn’t going to do wonders for your dreams of $150,000 annual salaries.  It will provide you with the ability to obtain valuable job opportunities to further your skills and educational criteria so that one day you can buy the nice car and the nice home and so on.  So, what does the CSC mean to your current/future employer? It means your willing to take initiative, further your knowledge, take increased responsibility, commit to long-term career options and so on.  The CSC is a valuable asset, just not in the way many people think.  It’s hard to write a post that simultaneously downplays the CSC’s career power while stressing the relevance of the CSC in the Canadian Securities Industry.  None-the-less, the sooner you complete this course, the sooner you can get started on your career aspirations.

– Steve