Competence

Having the knowledge and skills a task requires. Standard I(E), added in the 12th edition, makes acting with and maintaining it enforceable, judged by the work done rather than by how results turned out.

Where you will meet it

Competence appears in 12 learning outcomes on the CFA syllabus. A few of them:

• Set out the parts that make up the Code of Ethics
  CFA Level I · Ethical and Professional Standards

  “The Code of Ethics states the ethical principles members and candidates commit to: acting with integrity, competence, diligence and respect; placing the integrity of the profession and clients' interests above their own; using reasonable care and independent professional judgement; practising in a way that reflects credit on the profession; promoting market integrity; and maintaining professional competence.”

• Set out ways to change a portfolio's exposure to risk
  CFA Level I · Portfolio Management

  “It can be avoided, by not undertaking the activity — appropriate where the exposure is uncompensated or outside competence.”

• Explain what the Code and Standards expect of members ethically, covering every standard and its subsections
  CFA Level II · Ethical and Professional Standards

  “Professionalism covers law, independence, misrepresentation, misconduct and competence, and Integrity of Capital Markets covers inside information and manipulation.”

• Explain the part played by outside specialists and advisers in helping wealth managers serve their clients
  CFA Level III · Private Wealth Pathway

  “Good practice is to stay within one's competence, refer when legal or tax judgement is required, and choose specialists on merit.”

Practise it

• Today's practice question One question, with every wrong option explained.
• Free Level I diagnostic test Twelve questions that show which topics to start with.
• Free finance calculators Check your arithmetic on the exam's core formulas.

All terms beginning with C · Glossary