Professional Designations

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

By  Brian Thorp

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If your investment portfolio is diversified among numerous asset managers, knowing who is managing your money and how they are managing it is of paramount importance. By hiring a financial advisor or wealth manager who has earned their Certificate in Investment Performance Measurement (CIPM), you can feel more confident and secure that their oversight will help ensure your underlying investments are being properly managed.

Let’s take a closer look at what the CIPM certification is, what it takes to earn it, and if it makes sense for you to consider working with an advisor who has earned the CIPM based on your individual requirements. 

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

The Certificate in Investment Performance Measurement is administered and awarded by the CFA Institute. While the primary certification issued by the CFA institute is the Chartered Financial Analyst (CFA) designation, many financial professionals who have earned their CFA credentials choose to pursue CIPM certification as well.

What is a Chartered Financial Analyst (CFA)?

A Chartered Financial Analyst (CFA) is a globally recognized and respected financial certification for financial professionals who would like to develop their expertise in investment management. It’s administered by the CFA Institute, which is an international organization that strives to promote knowledge and financial literacy in investments.

With a CFA designation, financial professionals gain the knowledge and skills needed to succeed in finance, banking, and securities. Its curriculum was specifically designed to reinforce a variety of important investment principles. 

Learn more about the CFA Designation.

CIPM certification holders often work for asset management firms and financial institutions. You will also find financial advisors and wealth managers who have earned their CIPM certification, predominately those who serve higher net worth individuals with more complex and varied investment portfolios.

A financial professional who has earned their CIPM certification demonstrates their commitment to ongoing investment education, ethics, and standards established by the CFA Institute and regarded by many industry observers as second to none.

Should You Hire an Advisor with CIPM Certification?

A financial advisor who has earned their CIPM certification can deliver considerable value to their clients, especially:

  • High Net-Worth Investors: As a high-net-worth investor, you want to make the most out of your money. Since your situation may be complex, you can count on a CIPM certification holder to help you uncover investment opportunities that other financial professionals may not feel comfortable evaluating. They know what it takes to look beyond the surface and help you meet your short-term and long-term financial goals. 
  • Investors with Large or Complex Portfolios: If you have a large portfolio diversified among many investment managers, it can feel overwhelming to stay abreast of performance updates and changes among underlying holdings. A CIPM certification holder can monitor your investments effectively and knows the right questions to ask to determine if you should remain invested or reallocate to another manager.
  • Investors in Special Situations: Unfortunately, investors sometimes become the unwitting victim of investment fraud conducted by an unscrupulous financial advisor. In other instances, investors may have a sizable stake in a public or private company at risk of bankruptcy or otherwise in duress. In these types of circumstances, a CIPM certification holder can be an invaluable resource to determine the best available options and optimal outcomes when the going gets tough.

What is the Value of Hiring an Advisor Who Has Earned the CIPM?

J Lawrence Manley Jr., CFA Retire Well with Our Simple, Yet Sophisticated Investment Process

If you want to better understand the drivers of your investment returns and be confident that you are achieving the highest returns at your desired risk level, you should work with a fiduciary that holds the CIPM designation. An advisor with the CIPM designation has a deep understanding of risk analysis, measuring performance, and evaluating managers. Importantly, they can explain sophisticated and complicated investment performance data and products.

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J Lawrence Manley Jr., CFA | Manley Capital Management

What Does it Take to Earn and Maintain the CIPM Certification?

Those who hope to earn their CIPM certification must fulfill certain requirements set forth by the CFA Institute. Here’s a brief overview of the requirements:

CIPM Experience Requirements

Before a financial professional sits for the CIPM exam, they must first apply for regular CFA Institute membership which requires the following work experience:

  • At least four years (48 months) of experience in evaluating or applying financial, economic, and/or statistical data as part of the investment decision-making process; supervising persons who conduct such activities; or teaching such activities.
  • For a position to qualify, at least 50% of your time should be spent directly involved in the investment decision-making process or producing a work product that informs or adds value to that process. Work must be full-time and can be earned before, during, or after participation in the CIPM Program.

CIPM Exam

The CIPM exam is made up of two parts: Level I and Level II. Level I consists of 100 multiple choice questions, which must be completed over three-hour sessions in the same sitting. 

Upon passing Level 1, a CIPM candidate can sit for the Level II exam which includes 20 item sets, each containing 4 multiple-choice questions. The Level II exam time limit is 3 hours.

All CFA charterholders and candidates who have successfully completed the Level III CFA Program exam are exempt from CIPM Level l and may register directly for Level ll.

According to the CFA Institute, candidates spend an average of 155 hours preparing for the exam.

CIPM Continuing Education Requirements

Once a financial professional earns their CIPM certification, they are required to continue their education. The CFA Institute asks that all certificate holders complete 15 credit hours of continuing professional development to maintain their CIPM designation.

How To Find The Best CIPM Advisor for You

For many individuals and families, it is more likely the financial advisor you hire will hold their Certified Financial Planner (CFP) designation than the CFA or CIPM certification. However, you should feel confident in choosing to work with an advisor who has earned their CIPM certification or CFA designation as these credentials issued by the CFA Institute rank among the most rigorous and highly regarded advanced designations in the industry.

Especially if you’re a high net worth investor or hold complex investments in your portfolio, you should consider speaking with a CIPM certification holder to learn how they can apply their specialized knowledge and experience to provide expert insights and oversight to your investments and retirement savings. You’ll find a growing number of CIPM certification holders on Wealthtender and you can also search the directory of CFA Institute members on the CFA Institute website.

Featured CIPM Certification Advisors on Wealthtender

FAQs

How can I confirm the financial professional I’m working with has earned the CIPM certification?

Visit the directory of members on the CFA Institute website.

What if I have a complaint about the CIPM certification holder I’m working with?

Visit this page on the CFA Institute website to report misconduct by a member or candidate.

Where can I learn more about other professional designations held by financial advisors and coaches?

Refer to this list of popular financial certifications prepared by Wealthtender to help you learn more about each designation. You’ll find a brief description of each certification, plus links to in-depth articles if you want to learn more about a particular designation.


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About the Author
Brian Thorp, Founder and CEO of Wealthtender profile picture

About the Author

Brian Thorp

Brian is CEO and founder of Wealthtender. He and his wife live in Texas, enjoying the diversity of Houston and the vibrancy of Austin.

With over 25 years in the financial services industry, Brian is applying his experience and passion at Wealthtender to help more people enjoy life with less money stress.

Connect with Brian on LinkedIn

Disclaimer: In order to make Wealthtender free for our readers, we earn money from advertisers including financial professionals and firms that pay to be featured on our platform. This creates a natural conflict of interest when we favor promotion of our clients over other professionals and firms not featured on Wealthtender. Learn how we operate with integrity to earn your trust.

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