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Become a CFS Professional

Course Outline | FAQ's

The Certified Fund Specialist (CFS) designation is now celebrating its 17th year. Over ten thousand members of the financial services community have gone through the program. The designation is the oldest designation in the mutual funds industry.

Virtually all of your competitors offer mutual funds as a simple and effective way to investment. Yet, few advisors and brokers really understand how funds interact with other parts of the portfolio or how this investment vehicle should be analyzed. Measurements such as alpha, beta, correlation coefficient, first-auto correlation, R-squared, and standard deviation should be incorporated in the selection process.

The Certified Fund Specialist (CFS) is able to evaluate and compare financial measurements and benchmarks when constructing a portfolio. Modern Portfolio Theory (MPT) is also a key part of the program; its components are broken down and detailed in terms the advisor can easily understand and convey to a client. Armed with MPT and other selection criteria, a suitable and efficient portfolio can be derived.

The CFS 60-hour program provides the practitioner with everything needed to select the right fund for any given situation. The cost of the program is $1,165. The cost includes everything: registration, shipping, materials, testing, and the first year's certification fee. The final exam is given at Thomson Prometric Centers which are located throughout the country. The exam is administered by the NASD. Students must also complete an open-book case study. The CFS program is fully accredited.

Practitioners and academics have written and continually update the CFS materials. Students obtain the best of both worlds-the practical as well as the theoretical. Closed-end funds, ETF's, REIT's, and UIT's are also covered, thereby providing the student with a more rounded education. With this additional investment knowledge, you will be able to offer ideas to your clients that they would not receive elsewhere.

View CFS Brochure

Course Cost: $1,165

CFS Course Outline

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Module I - Overview and Tax Strategies

There is more to this investment than meets the eye. Aspects of mutual funds that are often forgotten turn something that appears simple into something to be marveled. Advisors attract more clients if they incorporate ideas not discussed by other brokers.

  • Categories, characteristics, features, and after-tax returns
  • Distributions, returns, tracking expenses, and exchanges
  • Turnover, transaction costs, size, and cash flow
  • Alpha, beta, standard deviation, and mean regression
  • Dates, declarations, retirement plans, and "catch-up"

Module II - Beyond Tradition

It may well be that open-ended funds should be used in conjunction with their closed-end brethren, ETF's, UIT's, and/or REIT's. Specialization targets specific concerns and takes portfolio construction to a different level.

  • Global and emerging markets, hybrids, and sectors
  • Forecasting, "fed watching," observations, and red flags
  • Funds vs. individual securities vs. derivatives
  • Closed-end funds, ETF's, REIT's., and UIT's
  • Growth, value, GARP, blending styles, and management

Module III - REIT's.

Surprisingly, the one investment people feel comfortable with is usually excluded from asset allocation. Diversifying real estate beyond the personal residence is easy and prudent. Variation within the category can be easily obtained by sector, size, or region.

  • Real estate growth, sectors, characteristics, and risks
  • History, current trends, and management ownership
  • Blue-chip, bond-proxy, growth, and "turnaround" REIT's.
  • Value creation, appreciation, and acceptable debt levels
  • Real estate mutual funds and payout ratios

Module IV - Analysis and Evaluation

Advisory services have proprietary systems that help select investment categories as well as specific funds. Some aspects are insightful and meaningful, others have little value, create a false sense of security, and do not stand up to the test of time.

  • Style boxes, sector weightings, and peer groups
  • Chasing returns and evaluating future risks
  • Core funds, overlap, style-specific, and flexible funds
  • High-yield, prime-rate, and inflation-indexed funds
  • Foreign, small cap, and sector funds

Module V - Difficult Decisions

Selection, monitoring, and portfolio construction take on a new perspective when the markets are experiencing extremes. Limitless sources make recommendations, but the decision-making process of what to do during bear markets is usually omitted.

  • Warning signs and when to consider selling
  • Calm during downturns plus bull market investing
  • Morningstar portfolios and the selection process
  • When a fund loses its manager or closes its doors
  • Buying a fund that is doing well or in the dumps

Module VI - Modern Portfolio Theory (MPT)

Since the early 2000's, "asset allocation" has become the catch phrase of the financial community, yet few understand the workings or limitations of MPT. When properly described and implemented, MPT is truly a blend of both science and art.

  • Multiple-asset behavior and the three-step approach
  • Imperfectly correlated assets and the efficient frontier
  • Real-world portfolios, "experts," and risk aversion myopia
  • Optimal, sub-optimal, and re balanced portfolios Not quite a random walk, what it all means, and post-MPT

CFS Frequently Asked Questions

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Q: What is the cost and what does it include?
A: The $1,165 fee covers everything - registration, materials, shipping, handling, and testing.

Q: How long does it take to complete the certification program?
A: Students are given 12 months to complete the program, but the vast majority of the enrollees complete the materials within a couple of months.

Q: What are the requirements for certification?
A: There are four requirements for certification: (1) pass three multiple-choice exams; (2) complete an open-book case study (see below); (3) fill out a registration form and complete a student questionnaire; and (4) sign a code of ethics.

Q: Were do I take the final exam?
A: Exams are taken at a Prometric Center. These centers are located throughout the country. If it is inconvenient for you to go to a testing center (e.g., too many miles away, disability, trouble logging onto the system, etc.), a proctored exam can be taken in your office. There is no charge to take an office exam, but the proctor you select must be a branch manager or compliance officer.

Q: What is the passage rate on the exam(s)?
A: Approximately 75%. Students who fail the exam can pay a $75 re-exam fee. If necessary, the final test can be taken multiple times.

Q: What if I do not pass or take the test(s) within the 12-month time frame?
A: You can pay $40 for a three-month extension. Multiple extensions can be purchased for a total of 2years from time of enrollment.

Q: What is the "open-book case study" requirement?
A: The case study is a half to a one page set of facts based on a hypothetical client. The response must be typewritten or word processed and less than two pages in length.

Q: Are there any ongoing or CE requirements?
A: Yes. After being a designee for one year, you must complete 15 hours of continuing education, reported once every two years. Designees have a wide range of topics and methods to choose from (e.g., attending seminars, reading books, completing other courses, teaching, writing articles, etc.).

Q: Do I get anything for my $100 annual registration fee?
A: Yes. Students and existing designees will receive the IBF Desk Reference. This 6bs for various sectors and investment vehicles such as individual securities, mutual funds, and variable annuities, plus more. The IBF Desk Reference is an expanded version of what IBF used to sell several years ago for $250 annually (and that version was not in color). Designees will be sent updated 4-color replacement pages for all 120+ charts, graphs, and tables each year. The designee does not pay for the binder, the120+ pages, or the annual updates.

Q: Do I get anything else?
A: Yes. You are entitled to a 50% subscription discount to The Wall Street Journal and/or Barron's. A one-year subscription to the Journal costs a little over $200. Our students pay less than half that amount. The savings are similar for Barron's. You can also save on PC or Mac software. We have made a deal with the largest distributor of computer hardware and software. Virtually any software you need can be purchased at a substantial discount. As an example, the most current version of Microsoft Office costs $350 at Staples or Office Depot. IBF students and graduates can purchase this software for $150.

Q: Does the program fulfill CE requirements for licenses or other designations?
A: This program fulfills CE requirements for CFP, CLU, ChFC and a number of other designations. Please contact our offices at (800) 848-2029 to find out if this program will meet the Insurance or Securities CE requirements for your state.

Q: Are there group or corporate enrollment discounts?
A: Yes groups receive a discount. Contact our corporate accounts department by sending an email to IBF or calling (800) 848-2029.