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8 CFA Exam Commandments-02

The 8 Commandments for the CFA Exam

By: Rebecca Langdon

I am going to guess that as you approach your CFA exams, you are nervous, apprehensive, and worried about the possibility that it won’t go well. The main way to ease some of these pre-exam jitters is to be really well prepared, and follow these 8 commandments to get you exam ready.

  1. Focus on the curriculum

Learning wider than the curriculum is always encouraged as it provides the learner with a richer experience and makes them a well-rounded candidate as they enter the world of work. However, the exams are based on the curriculum so do not forget to have that covered.

  1. Keep up to date

Ensure that you are following the latest curriculum. This is a basic one, but be aware that the curriculum does change and you need to know about it if it does.

  1. Practice writing

This is one of the common issues students don’t envisage they will face, and it becomes a painful downfall on the day of the exam. We don’t use a pen very often anymore – most of us use a computer for the work we do. So when it comes to trying to write for hours on end, our hand may not want to comply. Practice writing and get your hand used to it.

  1. Be familiar with the exam format

Take a look at the exam formats and ensure you know exactly what will be required. This will allow you to work on time management before you take the real exam.

  1. You aren’t psychic

Do not attempt to guess at areas of the curriculum that will and will not be covered and use that to guide your revision. There is no way for you to predict what will be on the exam, so do not even try.

  1. Time Management

If you run out of time you are going to feel pretty upset with yourself, as those are points you have no hope of achieving. Work out in advance of the exam how much time you have for each question, and do your best to stick to it.

  1. Pay attention to the detail

The exam will have instructions and perhaps scenarios to read. Give yourself ample time to read these. Do not rush this part.

  1. Take a deep breath

Exams are pretty stressful for most candidates. Give yourself time to relax and be mindful of your stress levels.

In Summary

We hope that you found these tips useful, and all the best if you have an upcoming CFA exam.

Financial Institutions Can No Longer Ignore Fintechs-02

Financial Institutions Can No Longer Ignore Fintechs

By: Rebecca Langdon

For a time long, the financial institutions held all of the cards – this was particularly true for the Banks. Fintech was not even a phrase that most of us had in our vocabulary until a few years ago. A decade ago the use of technology by the financial industry was typically seen as a means to an end, as opposed to an opportunity to gain significant strategic advantage over competitors and break down barriers to entry. In fact a lot of institutions used the same platforms, or built their own and managed it over a number of years. This led to a few dominant software vendors and pervasive homogeneity from a tech perspective in the industry.

So what changed?

Simply, the global economic crisis of 2007/2008 significantly disrupted the industry. Institutions that had held dominant positions fell. In many countries and regions, regulators and governments had no other option but to rethink the dominance of the older institutions and the barriers to entry that they had enforced. As the giant banks scrambled around to try and regain composure there was a surge of additional protections implemented, such as Dodd Frank in the USA and a far wider implementation of the Basel III Capital Framework. Interestingly while on the one hand the regulations became far more pervasive, governments were now encouraging innovation and supporting new entrants who would challenge the status quo. New entrants typically competed through innovation – namely Fintech solutions.

What about the UAE

Challenger banks are entering the market and offering solutions that make banking on the move easier than ever. For example, Bank Clearly is a new digital banking service that is being set up in the UAE. This is an online only service which according to them “Clearly will change the way you bank so profoundly that you will never imagine going back to the old way of banking.”

In summary

The industry is speaking a lot more about Fintech and as financial institutions seek to gain advantage through tech, they are partnering with software vendors for mutual advantage. It is a really interesting time to work within a financial role, and if you are interested in seeking a qualification, please take a look at our offerings.


Financial Outlook for 2017

By David S.

With 2016 being quite so unpredictable, you could be forgiven for thinking that we may be in for even more uncertainty during 2017.  With markets not sure how to react to global issues, banking as a sector is likely to expand their product base and move into new areas of commerce.  This fluid and changeable environment means that accepting new operating models and investment in emerging technologies that address the markets in different ways and open up new possibilities for investment and operations.


Many of the perceived changes are likely to take place in a number of areas of personal and corporate arms, including consumer banking, international trading and Mergers & Acquisitions (M&A), commercial banking, and infrastructure activities.   These areas cover the huge subject of macroeconomic trends and it’s a side of the international banking business that is expanding fast.  Banks will be looking at major investments being carried out as well as forecasting interest rate rises in the developed nations and how gross domestic product (GDP) is utilized with those countries.  This information is key to the long-term forecasting needed to make the banking sector as stable as possible, and from that stability, be able to make informed decisions on investments and business direction.


In 2017, M&A is likely to see an increase in legislation, ensuring that takeovers are not only legal, but also acting in the interests of the many rather than the few.  Commercial banking will see prudent lending to ensure that markets stay optimistic but don’t start running out of control, and transaction banking will focus on a balance of product innovation while ensuring that costs are kept low.   The most obvious innovation for 2017 will be a stronger response to cybercrime and a strengthening of products and processes to ensure that customer accounts remain secure.


But the bank knows that key to understanding what is likely to happen in 2017 and beyond is having the right people in place and ensuring that the training they receive is pertinent to the task.  Above all, banks should not make non-serious decisions and predictions should be backed up with well thought out responses.  The changes that banking is likely to feel in 2017 will be based on people with the right skills and that is likely to be the biggest change to banking in the year; get the right people, and train them correctly.

Tips on Managing Cash Flow When Business is Rising

By David S.

One of the biggest problems a company can face is how to deal with the increased cash flow when business starts booming.   A smaller company with several departments can suddenly receive a deluge of requests for funding as managers’ eye a healthy company bank balance and start to think of all the new and exciting equipment that they could fit out their departments with.  A sudden upswing in business can also instill a feeling of overconfidence in the company and as well as new equipment, a managing Director may find that they receive requests for more personnel.   However, caution is always the best policy in these situations and rather than just spending out, there are ways in which you can protect your potential investment.


As a company you are likely to have a financial plan.  This is the document that shows how you intend to invest and grow over a period of years, but these can seem in need of an update if the company suddenly finds itself in a period of furious sales activity.  However, the best policy is to stick to the original plan and just bank any extra funds for future use.  You may find that the extra sales are actually just a blip rather than a concerted and long term shift in sales, and if the money is spent, it may leave you in an undesirable situation, so it makes sense to treat any extra sales as something out of the ordinary and carry on as usual.


Similarly, senior management need to take extra care with expenses – both their own and those of their team, who may feel as though they can spend more in the pursuit of business.  Once again the best policy is to stick to the original plan and not embark on a session of spending – you may end up regretting it. Of course, you may find that you have a sustained period of extra sales, and you do need to cope with those, but rather than take on staff who may not be needed in a few months, so temporary staff and sub-contractors are the best way forward in those situations.


Dealing with a sharp upturn in business can be as daunting as losing business.  It may well be worthwhile preparing for both eventualities, just in case they happen.

What You Need To Know About Financial Statements

By David S.

With more of us turning to stock investment as a means of making money, it becomes increasingly important to understand how a financial statement is constructed and what information you can get out of it.  If you interpret the information correctly, you could end up making some impressive investments, but it does need training and good eye for business.  But how do you get the most out of them?


The first thing to understand is that financial statements are essentially scorecards that reflect the health of a business, and the Prudent investor will seek out quality companies with strong balance sheets, solid earnings and positive cash flows.  This means that to get the right information for investing you should be looking at the balance sheet, the income statement, the cash flow statement, the shareholders' equity and retained earnings.  All of those elements reflect the financial health of a business and demonstrate its ability to grow, which is a key feature for companies looking to invest themselves.


To make the most of financial statements, you need to understand balance sheets, income statements, the equity set aside for shareholders and company retained earnings.  These values represent real-world figures for the company rather than something vague such as value based on assets alone which may give a highly distorted picture. There needs to be some caution though as are those in the general investors who tend to focus on just the income statement and the balance sheet, thereby relegating cash flow deliberation to a lesser role in the consideration, which can be a mistake as the cash flow statement contains critically important analytical data that will help you make an informed decision.


It is important that you understand the diversity of business reporting and feel confident in understanding what each reported feature relates to and how it relates to the overall health of the company.  That means knowing what is actually behind the numbers and how their rations describe the viability of the investment.  Ideally, before starting a series of business investments, it is wise to ensure that you understand the business world, and take at least a beginners accountancy course and possibly even finance for non-financial managers.  These will give you the background that you need to make informed decisions.

4 Ways to Relieve Stress for Entrepreneurs-02

4 Ways to Relieve Stress for Entrepreneurs

By Rebecca Langdon

Being an entrepreneur is exciting, it is a rollercoaster. It can be a rewarding and thrilling experience. However, it can at times feel daunting, particularly when the rollercoaster is in a dip. There are of course some top tips to follow to lessen the stresses of being an entrepreneur:


  • Have an emergency fund

As an entrepreneur you typically don’t have the type of financial back up that larger corporations have when they enter into a new venture. If liquidity becomes a problem, which can happen quite quickly, relying on the Bank can be incredibly expensive and funds may not materialise. Estimate your monthly expenses and then aim to hold 3 to 5 times that in an emergency fund.


  • Avoid credit cards

It can be so tempting to get the credit card out for business expenses – particularly when there is an interest free period on offer. However the debt can accumulate quickly, and before you know it the interest free period is over and you are paying extortionate charges. Borrowing should be undertaken in a far more planned and proactive rather than reactive manner.


  • Don’t forget your taxes

Whether it is a personal or business tax liability, you do not want to be caught short when the debt is due. The tax man is one debtor you really don’t want to fall foul off. So ensure you set tax liabilities aside. Do this religiously!


  • Be financially organised

You need to understand all aspects of your monetary position, including how much you have saved, what your burn rate on cash is, all liabilities, assets and so on. From a business perspective you should have in your mind all key figures such as income, profit and loss projections, balance sheet position leverage rations and so on.


In Summary

Being an entrepreneur can be incredibly rewarding, but the ups are also met with the downs. Of critical importance is not to be in a financially vicarious position when you do experience one of the downs. The tips above will reduce the stresses felt by an entrepreneur from a financial perspective. Furthermore, many entrepreneurs rely on the services of a qualified financial planner who might for example be a Chartered Financial Analyst.



The CFA Charter: The gold Standard for the Finance Industry


It was in 1963 that the first Chartered Financial Analyst® (CFA) exams were held with the aim of creating a benchmark for professional standards and a means through which to certify and raise the standards of the finance profession. With 2016 marking the CFA’s fifty third anniversary milestone, it also presents a time to reflect on where the profession is at today and where the CFA can still take you in the future.


Certainly a lot has changed in the last five decades and the finance world of today is still reeling from the implications of the global financial crisis and a series of financial scandals and disasters. This situation has only served toincrease the CFA’s relevance and demand in the workplace. As businesses have been made more aware of the need to protect their images and change their corporate culture, they are looking for human resources whonot only possess first-rate skills and competence but also integrity. Signing a commitment to abide by the CFA Institute Code of Ethics and Standards of Professional Conduct is one integral part of achieving CFA status; the other parts involve passing three exams, and completing four years of work experience in the investment industry. Noting that the financial community continues to face a crisis of investor trust, John Rogers, CFA, president and CEO of CFA Institute, says, “The next generation of investment professionals is instrumental in shaping the future of finance,” and that successful CFA candidates have “the opportunity to build the kind of industry culture that puts investors first and better serves society.”


The new reality of the post financial crisis world is also shaping the career opportunities available to CFA charterholders. Morgan International instructor Darren Degraaf teaches materials to candidates taking the CFA exams, and he is quoted as saying that charterholders are seeing a shift in the types of roles for which they are in demand.  “Job growth for candidates or members besides other front office roles are moving to mid office roles, especially in risk management and compliance,” he says. Indeed the CFA Institute notes that there has been a “hiring spree” for these functions, which are seen as critical by firms trying to rebuild reputations and comply with regulations.


Another shift that Degraaf notes is the high growth of candidates in Asia Pacific, especially in China and India – where candidates from this region are closing in other 50% mark, with roughly half of those students from either India or China. The United Arab Emirates is also among the top 10 in terms of student numbers from the 39 countries worldwide where the exam was administered. This shift in origin of candidates is an indication both of Asia Pacific’s increasing importance in the international financial markets and the globalization of the industry. In total 58,677 students around the world took the Level 1 CFA exam in June 2016 and recorded a 43% pass rate.


In addition to contributing to the ethical standards of the financial industry, those that pass the CFA Program can feel assured that they hold a globally recognized certification capable of opening doors in what is an increasingly competitive job market.


Why Time Value of Money is Crucial to Any Business!


By John Alexander Adam

Financial management is a wide ranging field of knowledge but, as with any discipline, there are some absolutely central pillars of knowledge that are applicable across the board regardless of the nature of the business you are in. The concept of the ‘Time Value of Money’, undoubtedly numbers amongst those! Its central maxim is roughly equivalent to the old idiom ‘a bird in the hand is worth two in the bush’. That is to say that money a business has in its bank account now is always of significantly more value than the equivalent sum promised or expected to be received at a future date. The theory underpins the concept of interest rates and is central to financial modelling used to assess any ‘investment’ that has an interest component, such as cash reserves, loans, mortgages or bonds.

Cash that you have today can be invested in any number of ways that can earn a return on that investment. Marketing, additional staff, stock, or dividend payments if invested on the stock market, you name it. Calculating the Time Value of Money involves looking at figures such as what you would be certain of earning as a minimum if that money was put to work over a certain period of time. An approximate example would be looking at how much money you would have to deposit now to have $100,000 in 2, 5 or 10 years if it earned a return of 7%. The difference between that future $100,000 and what you would have to deposit now is the Time Value of Money, or opportunity cost.

Certain and Uncertain Payments

When calculation the Time Value of Money there is of course a significant difference between certain and uncertain payments. If the money is invested into a government backed bond, or placed in a savings account with a bank, the promised interest would be considered to be a ‘certain payment’. If it is invested in marketing or something other higher risk investment, then the risk involved must also be factored into the formula you use to calculate the Time Value of Money.

Time Value of Money is therefore an integral part of the financial management of any business. Its principles effect decisions from investment in R&D, technology, stock or staff to allowing clients credit facilities.

If you would like to improve your understanding of business and finance, why not take a qualification such as the CFA® Program. Morgan International offers a number of different professional finance, investment and accounting qualification programs at locations across the Middle East.


What is Inflation, How Does It Work and Why is it Important?


By John Alexander Adam

In the classic novel Pride and Prejudice, set in 1813, Mr. Darcy is presented as one of the richest men in England. His income, however, is only £10,000 a year. In present day England, the official poverty line for a couple with two children is set at a little over £20,000, more than twice the exorbitantly wealthy Mr Darcy’s income. Someone with the equivalent of Mr. Darcy’s socio-economic standing today would be expected to have an annual income in the hundreds of millions of pounds. Of course, in 1813 £10,000 would provide purchasing power incomparable to that of the same sum today. The reason for that is inflation.

Inflation, the rate of increase in prices for goods and services, is one of the most important influences in economics and one of any government’s primary fiscal goals is to keep inflation at a controlled level. Inflation is caused by the demand for goods and services being higher than their supply, which over time gradually pushes prices up. If inflation is too low it indicates dropping consumer demand, usually the sign of a wider economic problem, and subsequently compounds that by encouraging individuals and business postpone purchases, harming sales figures.

It also increases the burden of debt as inflation goes some way to offsetting interest rates. However, if inflation is too high it moves faster than growth in incomes and the purchasing power of companies and individuals is impaired, which also has a harmful effect on economies. This is why central banks around the world target long term average interest rates of around 2%.

How is the Inflation Rate Calculated?

Inflation rates can be calculated using different formulae but essentially look at the average price increase of a ‘basket’ of things we commonly spend money on such as fuel, staple foodstuffs and widely consumed entertainment, such as cinema tickets. The most commonly quoted inflation indices are the Consumer Prices Index (CPI) and the Retail Prices Index (RPI). The main difference between the two is that the RPI also includes costs associated with housing such as rent levels, mortgage interest payments and housing-specific taxes. CPI also takes into consideration that certain goods and services may be substituted by cheaper alternatives when their prices go up. While the ‘basket’ of goods and services used to calculate inflation varies from country to country, it will include tens of thousands of separate items to provide an accurate overall picture not unduly influenced by factors that might cause price increases in isolated items. Items are also weighted based on an assessment of how much we spend on them.

What Are Inflation Figures Used For?

The main reason why governments so diligently monitor inflation rates is because of the harm that they can cause to the economy when they are too high or too low, as mentioned earlier. If they are too high or too low governments have a number of tools at their disposal to increase or decrease inflation. The most commonly applied of these tools are the control of money supply and interest rates. When inflation is considered to be too low central banks often decrease interest rates to encourage borrowing, and subsequently spending, which increases the demand for goods and services, pushing up inflation. The opposite approach is taken when inflations rates are too high. If this fails in the case of low inflation, or is not thought to be likely to have a strong enough influence by itself, central banks can increase the supply of money in the economy by printing more and feeding it into the economy through the purchase of financial assets from financial institutions, usually government bonds. This cash then encourages these financial institutions to increase lending by offering cheaper prices and cash flow around the economy increases, stimulating demand and inflation.

If you would like to improve your understanding of business and finance, why not take a qualification such as the CFA® Program. Morgan International offers a number of different professional finance, investment and accounting qualification programs at locations across the Middle East.


Government Regulation: Does It Help or Hinder Business in the UAE?


By John Alexander Adam

When it comes to government regulation of the economic and business environment there are a diverse range of positions. Some postulate that any form of regulation inherently hinders business and that it flourishes best without any kind of government interference. However, the majority accept the need for some level of regulation to both support business development in overcoming particular obstacles and to ensure some degree of quality control and consumer protection.

In the UAE, the history of government regulation of the business environment has historically been one of stimulation rather than constraint. Governments across the region have made a concerted effort to invest the wealth that oil and gas have brought them into the long term project of building sustainable, diversified economies almost from scratch. The two-pronged approach to this has been the creation of regulatory environments which offer both support for local business and encourage foreign businesses to move to the region.

We’ll look specifically at government regulation that impacts businesses operating in Dubai here. While each Emirate has its own regulatory framework, these conditions tend to be similar across the UAE.

  • Free Zones

There are 35 ‘Free Zones’ spread across the UAE, not only in Dubai. These zones have special regulatory status and host particular categories of business which vary from zone to zone. The advantages of the UAE’s free zones are:

  • Exempt of Import and Export Tax
  • 100% Foreign Ownership of the Company is Permitted
  • Corporation Tax Waived for up to 50 Years
  • All Income and Profits Can Be Repatriated
  • No Personal Income Tax for Employees
  • Legal Framework

Dubai, and the wider UAE, has a special legal framework specifically catering to foreign companies. It has been set up to minimalize paperwork, and the time required for company set-up, registration, licensing and other procedures.

  • Investment Support

The Dubai government’s Department of Economic Development (DED) is tasked with the development of policy designed to support and encourage business in the Emirate, both locally and foreign-owned.

  • Open Trade

Dubai and most of the UAE has open trade agreements with the bulk of its trading partners, with 75% of goods coming in duty free and with an average tariff rate at just 4%.

In the case of the UAE in particular, it is clear that government regulation is generally a boost to business. It plays an active role in encouraging a financially friendly environment by stripping back taxation and administration rather than imposing it.

There is, however, opinion that increased government regulation of a different is required in some areas of business in the UAE. One area of particular concern is interest rates which many feel the governments need to step in to cap, with levels significantly higher than international averages.

If you would like to improve your understanding of business and finance, why not take a qualification such as the CFA® Program. Morgan International offers a number of different professional finance, investment and accounting qualification programs at locations across the Middle East.