Testing time for corporate financiers

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To what extent are qualifications necessary to practise a profession? Is it enough to be experienced or should knowledge be benchmarked in the form of exam passes?

Corporate financiers are the latest to face this conundrum. As proof of their status, seasoned

M&A bankers have pointed to their collection of trophies handed out on completion of deals.

Soon, the same bankers could proudly bear the letters "CF" after their names instead. This is the intention of a consortium comprising the UK Securities and Investment Institute, the Institute of Chartered Accountants of England and Wales and the Canadian Institute of Chartered Accountants. It held a reception at the Lloyd's building in London to launch a corporate finance qualification this month.

Chris Ward, head of corporate finance at accountant Deloitte & Touche, said the qualification aims to become the global benchmark for everyone working in corporate finance. "We want to establish something aspirational that corporate financiers working in accountancy firms, investment banks and private equity firms need to have."

Like the Chartered Financial Analyst qualification taken by equities analysts and fund managers, the CFQ will have three levels catering for juniors to seasoned professionals. Only after completion of the third level will practitioners acquire the CF designation. Subjects will include regulation, ethics and M&A technique. The lower levels will be assessed through multiple-choice questions, but aspiring CF holders will make an M&A-related presentation to a team of assessors. Senior corporate financiers may be able to sidestep the process: a committee will take stock of their achievements and may award them the accreditation retrospectively.

The CFQ hopes to be globally recognised. Promotional literature promises it will "shake up the world of professional qualifications, providing a rival to the likes of the MBA for aspiring corporate financiers".

Accountancy firms are the biggest backers. Ward said Deloitte's 10 corporate finance graduate trainees would start preparing for the first exam in September and its senior staff may aim for retrospective recognition. Tony Osude, head of post-qualification education at the ICAEW, said corporate financiers at Ernst & Young, PricewaterhouseCoopers and KPMG had also signed up, as have those at BDO Stoy Hayward, Grant Thornton and Baker Tilly.

However, Osude said investment bankers were the real target. "This is primarily for the banks, which control about 70% of the corporate finance market. We expect around a dozen banks to start training for the CFQ next year," he said.

The ICAEW has a long way to go before turning its dream into reality. Of five senior corporate financiers contacted, only Rupert Faure-Walker, a managing director at HSBC, was aware of its existence. The head of investment banking training at a top US bank said: "We haven't heard of it. It sounds interesting but we'd have to do a lot of due diligence first."

Faure-Walker said he supported the new qualification because it should draw attention to the professionalism of corporate financiers in London. "People don't often realise that London bankers have a reputation second to none for integrity. Anything that enhances this reputation is a good thing," he said. HSBC has yet to commit to training its staff.

Jon Moulton, chief executive of Alchemy Partners, a private equity group, is also a CFQ supporter. He said: "The technical complications and complexities of the corporate finance profession have expanded exponentially; people could benefit from a global standard."

Other senior corporate financiers were less convinced that their profession needs a badge of honour. Raimund Herden, global co-head of M&A and corporate finance at Dresdner Kleinwort Wasserstein, said corporate financiers could benefit but any qualification would need to be rigorously examined. "If you're a medical doctor you go through a long period of training, but most of these qualifications involve nothing more than a few preparatory seminars," he said.

Marc Vincent, head of investment banking for Mediobanca in France, said there was less need for the entry-level element of the qualification in continental Europe, where most would-be corporate financiers have studied finance-related subjects at university. He said: "In the UK it is not unusual for someone to go into banking after studying English literature. Here, people are more likely to have a Masters in finance when they begin."

If the CFQ fulfils its promise, it will mark a shift in favour of vocational training and codified performance standards.

Some firms are betting on this happening anyway. BPP Financial Training, a leading exam training provider, plans to offer a Masters in Finance after the UK government opened the door for private companies to offer university courses last November.

Phil Morey, managing director, said banks had expressed an interest. "They know we have the vocational expertise to make this work and students coming from us will be better prepared for the work environment," he said.

At more senior levels, uptake of the CFQ is likely to be determined by client demand. However, Herden said clients would not choose one banker over another simply because he or she had the accreditation. He said: "A qualification will not make you a better banker. This is a trade that you learn by experience and doing deals. You also need to be very strong on qualitative interpersonal skills, which are hard to test for in an academic sense."

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