The Institute of Investments & Wealth, the professional organization that administers the Certified Investment Management Analyst (CIMA), Certified Private Wealth Advisor (CPWA) and Retirement Management Advisor (RMA) certifications, has updated the CIMA curriculum and exam for the first time first since 2019. The organization has changed about 20% of the exam and learning requirements to reflect the current knowledge and skills of financial advisors.

The new exam, which will take effect on August 1, 2024, will focus more on alternative investments and private markets, increasing from 2% to 5% of the exam, and portfolio construction, from 5% to 8% . As part of the alternatives section, it will also test cryptocurrency and digital asset advisors for the first time.

IWI chief executive Sean Walters said the changes reflect high-net-worth investors seeking more sophisticated investment products, such as alternatives and digital assets. An IWI survey of HNW investors found that investment management was the most important service they expected from their advisors.

“There are some advisors who don't recommend products they don't understand,” Walters said. “And I don't blame them for that. But if I'm a high-net-worth client and I'm eligible for private markets or private credit, or I have really complex portfolio-building needs, I don't want my advisor to transfer that to some TAMP or just use portfolios the model coming down the hill from the home office. I want them to know how to do portfolio building at a high level.”

IWI will reduce its focus to a few technical parts and areas covered a lot by technology today. Risk and risk measurement calculations will now count for 6% of the exam out of 12; performance measurement and risk attribution will make up 5% of the exam out of 8%; and customer discovery and investment policy will represent 6%, up from 8%.

Today's professional doesn't need to understand them as well as they did, say, 10 or 15 years ago, because technology is removing that burden, which allows them to focus their time and effort on tasks higher cognitive level, such as applied portfolio construction. or applied portfolio analysis,” said Sean Walters, CEO of IWI.

The exam will also include a new content section on “investment implementation approaches” in 5% of the test. IWI points out that as more advisers are outsourcing investment management to TAMPs, model portfolios or digital allocators, they need to understand those models and the investment decisions behind those recommendations.

“At a lot of firms, they have a team of investment analysts that put together a model portfolio, and they pretty much distribute it through advisers that are affiliated with that firm,” Walters said. “It's like the blue pill that rolls into the shoot and they just give it to their client without thinking.”

The investment implementation section will cover applications of asset allocation methodologies, resolving concentrated stock positions in a portfolio, and how to handle accumulation and allocation issues based on client time horizons, assets and liabilities, and objectives.

The changes to CIMA were based on a 2023 job analysis study that IWI conducted with HUMRRO, a non-profit test development organization. They surveyed 300 investment practitioners, asking them about the importance of specific knowledge needed to do their job.

The IWI currently has approximately 21,000 members, approximately 13,000 of whom hold CIMA, CPWA or RMA certifications. This is up from 10,628 certifications in 2019. Less than 3% of advisors hold CIMA certification. However, a study by Cerulli Associates found that over 15% of teams with $500 million or more in assets have at least one CIMA on staff.

Based on a two-year average, the CIMA exam currently has a 48% first-time pass rate.

“It's a challenging exam,” Walters said. “I don't expect it to become more challenging. If anything, having it more up-to-date will help candidates have more success in the exam.”

IWI was formerly known as the Investment Management Consultants Association (IMCA). it Was renamed in 2017 be placed as the next step after CFA and CFP.