Certificate In Investment Performance Measurement (Cipm) Overview

What Is the Certificate in Investment Performance Measurement (CIPM)?

The Certificate in Investment Performance Measurement (CIPM) is an internationally recognized accreditation offered by the CFA Institute. As its name suggests, the purpose of the CIPM is to train professionals to accurately calculate and communicate investment performance figures.

How the CIPM Works

The CIPM is an important designation within the financial services industry, because it helps provide confidence that the investment performance figures used throughout the industry can be relied upon by all involved. After all, since industry advertisements often feature return on investment (ROI) figures for products such as mutual funds, hedge funds, or individual securities, it is very important for the investing public to be able to trust that these figures are being calculated and presented on an “apples-to-apples” basis.

Over the years, various industry standards and best practices have been created to help achieve this goal. Today, these principles are reflected in the Global Investment Performance Standards (GIPS), a shared methodology used throughout the world for calculating and presenting investment returns. Candidates who pursue the CIPM designation are trained in how to evaluate and present investment returns in a GIPS-compliant manner.

Although calculating investment returns may seem like a relatively straightforward task, in practice ensuring GIPS compliance can be very technically demanding. For this reason, the CIPM designation teaches a broad range of skills and knowledge in areas such as mathematical and statistical methods, the laws and regulations governing performance measurement, and financial accounting. The CIPM also covers material that is more hands-on in nature, such as teaching candidates how to effectively supervise other personnel who are involved in the calculation of investment returns.

Real World Example of the CIPM

Candidates who wish to obtain the CIPM designation must have at least two years of professional experience in roles specifically related to calculating and reporting investment performance figures. Alternatively, candidates can also meet this requirement by demonstrating four years of experience in a broader set of roles within the financial industry.

Once accepted into the program, successful candidates must complete two exams, both of which are proctored, close-booked exams lasting 180 minutes. All candidates must agree to abide by the CIPM Code of Ethics and Standards of Professional Conduct, while also maintaining ongoing education requirements after obtaining the CIPM. Historically, about 50% of candidates pass the exam, with successful candidates often enjoying enhanced employment prospects within the financial sector.