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Asset Management Education - December 17, 2007

Interview with Jeffrey J. Diermeier

In this month's interview, to coincide with the launch of the inaugural Advances in Asset Allocation seminar which is being organised jointly by EDHEC and CFA Institute and will be held in London next March, we speak to Jeffrey Diermeier, President and Chief Executive Officer of CFA Institute.

Jeffrey J. Diermeier

What is the CFA Institute policy with regard to partnerships with academic and research institutions and why has it decided to partner with EDHEC Asset Management Education?

Jeffrey Diermeier: An important part of our mission is to provide high quality financial education for investment professionals, so academic and research institutions are our natural partners. We decided a couple of years ago to approach some of the best schools in the world providing undergraduate and post-graduate programmes in finance which significantly overlap with the CFA Program curriculum, as well as teaching ethical standards for professional conduct. Given this strategy, EDHEC was an obvious candidate and quickly became a CFA Program Partner. We also wanted to provide opportunities for continuing education for our more experienced members. After surveying them, we found that there was a demand for an executive education programme focused on asset allocation. Given EDHEC Asset Management Education’s considerable experience, competence and renown in this area, we decided to collaborate and offer a joint annual programme scheduled for March 2008.

2007 marked the 60th anniversary of your institution; what have its main achievements been?

Jeffrey Diermeier: Over the last six decades, CFA Institute has strived to build the leading association of investment professionals worldwide. That has involved defining a body of investment knowledge, preparing an educational curriculum and examination, setting ethical standards for professional conduct as well as disciplinary procedures, providing opportunities for continuing education, and much besides. I believe that CFA Institute’s major achievement has been to put in place all these requirements to become a profession. Throughout, we have been guided by our mission, which emphasises ethics, education and professional excellence. As a result, we have close to 100,000 members worldwide with even more candidates each year; we are recognised as the leading voice on issues that matter most to investment professionals; and our members are trusted as among the best investment practitioners. The generations that built the Institute can take some pride in that achievement.

What challenges lie ahead for the profession and how does the CFA Institute plan to prepare the industry for these?

Jeffrey Diermeier: We are in the process of preparing our strategy for 2012 (and beyond) and have been talking to a wide range of practitioners, executives and academics, including EDHEC’s own Professor of Finance, Lionel Martellini, so this is a timely question but difficult to answer succinctly. I think the immediate challenges can be summarised as follows: Globalisation and the need for emerging markets to “professionalise” and develop their own skilled human capital; Talent Management and the fact that the industry needs to do more to retain and develop the people it employs and provide them with life learning opportunities which, interestingly, given the changes that are going on in the investment world, investment professionals need to increase their breadth of knowledge versus their specialist skills. This should be good news for EDHEC and similar organizations; Customer Orientation, the industry needs to evolve to provide customer solutions rather just create products; and, Innovation, whereby the industry has to strive to develop new approaches to the world of investment and risk if it is to continue to move forward. CFA Institute is looking to address all of these issues through a strategy of product development and partnerships with industry, academia, members and leading experts in the world of investment. These are exciting times and we are very well placed to address all these issues on behalf of the investment profession and the industry.

What are CFA Institute’s development goals for Europe?

Jeffrey Diermeier: We are pleased with our achievements in Europe: we have around 14,000 members and 23 local societies of investment professionals. We have enjoyed rapid growth in candidates and members, reflecting the widespread acceptance of the CFA Program as a global vocational benchmark for serious investment professionals. Our emphasis on high ethical standards for professional conduct has also proved popular. Looking ahead, we are developing some exciting plans to offer more opportunities for lifelong learning; this will include broader and deeper involvement with our educational partners such as EDHEC. We are also busily adding staff and resources to our European office established five years ago, as a means for better supporting our expanding membership in the region. In particular, we are expanding our European advocacy team dedicated to engaging with regulators and others to champion financial market integrity. All this demonstrates our ambition and commitment to Europe.

About Jeffrey Diermeier

Jeffrey J. Diermeier, CFA, has served on the Board of Governors of CFA Institute since 2002 and became its full-time president and chief executive officer 1 January 2005.

CFA Institute is the global, professional association that administers the Chartered Financial Analyst (CFA) and Certificate in Investment Performance Measurement (CIPM) curriculum and exam programs worldwide, publishes the Financial Analysts Journal, conducts professional development programs, and, through its CFA Institute Centre for Financial Market Integrity, sets voluntary, ethics-based professional and performance-reporting standards for the investment industry.

Mr. Diermeier has served the not-for-profit association in various volunteer capacities for 19 years, including six years on the CFA curriculum committee. He most recently chaired the board’s planning committee, and in that capacity played a leadership role in the development of a five-year strategic vision for the organization. He is a member of the CFA Society of Chicago (one of four societies that in 1947 cofounded the original forerunner to CFA Institute) and served on its board of directors from 1989 to 1992. Currently, Diermeier also serves the investment community as a member of the newly formed SEC Advisory Committee on Improvements to Financial Reporting.

Until early 2004, Mr. Diermeier was global chief investment officer at UBS Global Asset Management. In that role, he oversaw the management of more than $400 billion in assets, covering asset allocation, equities, fixed-income, real estate, and currencies, and a staff of 435 investment professionals in 10 countries. Mr. Diermeier was with UBS and its predecessors, primarily Brinson Partners, Inc., since joining the former First National Bank of Chicago as an equity analyst in 1975. In his almost 30 years with the organization, he served as head of asset allocation, head of the U.S. equity division, and deputy chief investment officer and co-head of global equity. He became global chief investment officer in 2000.

Mr. Diermeier graduated in 1974 from the University of Wisconsin at Madison with a bachelor's of business administration and in 1975 with a master's of business administration from the same institution. He earned the CFA charter in 1979.

Mr. Diermeier has received two Graham and Dodd “Scroll Awards” for research articles he has contributed to the Financial Analysts Journal, published by CFA Institute. He also has received a Roger Murray Award from the Institute for Quantitative Research in Finance. He has received the distinguished Business Alumnus Award from the University of Wisconsin, where he served on the dean's advisory board of the business school and endowed the Jeffrey J. Diermeier Chair in Finance. He is a member of the board of the University of Wisconsin Foundation, a member of the National Association of Corporate Directors’ Not-for-Profit Advisory Council, and a former member of the investment committee of the University of Chicago Endowment. He serves on the board of Stairway Partners, an investment management organization, is co-trustee with his wife, Julie, of the Diermeier Family Foundation, and is former chair of the Hinsdale Hospital Foundation.