Key elements in sustaining the viability and relevance of an academic program are the involvement of that program in the larger professional community and its responsiveness to the changing needs of that community. The finance faculty within the College of Business Administration at UTC is committed to a mutually beneficial partnership with finance professionals in the Chattanooga area through numerous initiatives.
Producing qualified graduates is priority one, and that means more than simply the basics. Finance students are challenged by the curriculum and offered extraordinary learning opportunities. Recent accomplishments include the creation of a Chartered Financial Analyst (CFA) track and a solid partnership with the local CFA chapter, the establishment of a Finance Speakers Series, the availability of courses leading to the certified financial planning designation, and the opportunity for students to manage actual investment portfolios.
“When I arrived at UTC in 2001, I joined the Chartered Financial Analysts Society of Chattanooga in order to connect with the local business community and to help the local business community become more involved at UTC,” related Dr. Chris Brockman, Associate Professor of Finance. “The finance faculty regularly attends the society’s monthly luncheon meetings, and we encourage our students to attend and develop possible job contacts. Through this relationship, the College of Business has hosted several CFA Society luncheons and events, including a special breakfast meeting with CFA Institute CEO and President, Jeff Diermeier.”
The enhancement of the finance curriculum to include the CFA track became a logical next step in an expanding relationship. With the amended curriculum, students may now take courses which are closely aligned with the CFA Level I requirements. Those majoring in finance are also able to choose between a general Business Finance track and the new Investment track.
“The creation of the two tracks is driven by a desire to encourage students seeking careers in investments and portfolio management to pursue the Chartered Financial Analyst designation and to improve their prospects in an evolving job market,” explained Dr. Bento Lobo, Associate Professor of Finance. “Increasingly, employers in the investments area are seeking candidates with an interest in the CFA program for full time positions or internships.”
Chris Hopkins, Vice President of Investments with the independent wealth management firm of Barrett and Company, entered the finance industry in 1997 and returned to UTC to complete his MBA, graduating in 2003. Since then, he has also served as an adjunct professor in the finance department.
“The CFA community here in Chattanooga has a formal relationship with the College of Business,” said Hopkins. “That entails working with the finance faculty to create the CFA track. It has been quite an accomplishment, and Bento was really the driving force behind this thing. In fact, he registered to sit for the exam in June himself. Several other finance faculty members have also indicated an interest. We are proud of this link and working toward recognition by the CFA Institute in order to utilize their trademark and symbols and publicly state that we have a formal relationship with the Institute. Several other universities have that, and we are striving for it possibly within the next two years.”
Ray Ryan, Vice President and Portfolio Manager for the investment firm of Patten & Patten, sees the CFA development as “a very good example of the university doing something unique, innovative, pragmatic, and professional. The faculty of the College of Business are not just sitting on their hands. We are encouraged by their interest, and it is a proactive way to differentiate themselves from the competition and to attract higher quality students and produce higher quality graduates.”
The CFA charter, which was initially awarded in 1963, has become known as the gold standard of professional credentials within the global investment community. Around the world, employers and investors recognize the CFA designation as the definitive standard for measuring competence and integrity in the fields of portfolio management and investment analysis. UTC is expected to become a focal point for individuals interested in pursuing the CFA designation, which will serve as a valuable recruiting tool. Those seeking the designation are required to pass three levels of examination and complete four years of relevant work experience.
The CFA Institute, founded in 1947, includes 89,000 members in 129 countries. Achieving status as a CFA Institute Partner School will not only allow UTC to display the Institute’s logo on print and electronic marketing literature, but will also provide special partner recognition on the Institute’s website and during conferences. Access to information on the nature of the CFA examinations, which is similar to the access given CFA candidates, will also be provided, including printed copies of some sample examinations. One complimentary set of curriculum or university oriented textbooks based on the Candidate Body of Knowledge produced by the CFA Institute will be presented to the College of Business annually along with a complimentary statistical service report reflecting the pass rate and average scores by section on the examinations for those candidates who allow such information to be released.
“Being a CPA, I know just how important having the most prestigious designation in your profession can be,” added Dr. Brockman. “In the investment management community, the CFA designation is essential, just as the CPA designation is essential in the accounting world.”
In the arena of practical investment management, Dr. Michael Long, UBS Associate Professor of Finance, has worked with students in managing both the Harris and TVA investment portfolios for several years. The three-year average rate of return on each of these has been 7.14 percent and 9.00 percent respectively. In comparison, the S&P 500 return has averaged 10.15 percent, and UTC has maintained a status in the mid-range of performance among peer universities.
“At one time, UTC’s College of Business was probably one of the few schools to offer their students a chance to manage a ‘real money’ stock portfolio,’ commented Dr. Long. “Most schools could only offer a simulated version where students managed a ‘play money’ portfolio. However, over the past five to 10 years many schools have begun to set up real money stock portfolios for their students to manage. At UTC, we currently have the Harris and TVA portfolios. TVA sponsors 26 colleges of business throughout the South as part of their student managed portfolio investment challenge.”
A recent College of Business graduate accepted a job with the national training program at Merrill Lynch, which grooms future potential portfolio managers. Dr. Long sees the experience gained in real money portfolio management as invaluable. “First and foremost, this class provides students with real world experience in buying and selling individual stocks, along with the responsibility for managing two stock portfolios worth over $775,000. It also helps them to realize the level of discipline that is required when investing. In addition, many students have told me that during their job interviews this is an item on their résumé that consistently catches the attention of interviewers.”
Dr. Long has also been instrumental in organizing the annual Finance Speakers Series at UTC, bringing local, national, and international business leaders to the campus to discuss issues and opportunities in their fields. During the week of the Speakers Series, classroom instruction is substituted with presentations from prominent business decision makers. Speakers are asked to relate actual “war stories” which have occurred during their careers, describe their job responsibilities, discuss career opportunities available in finance within their companies, and describe real successes and setbacks.
“Speakers make a presentation of approximately 90 minutes,” said Dr. Long. “Sometimes, they bring another speaker to discuss a finance topic from another perspective. The format is 45 minutes of speaking, followed by a 15 minute break, then 45 minutes of additional speaking and 15 minutes of questions and answers. We want to make a connection between the classroom and the boardroom, and we think it is interesting for our speakers to talk about things they do in their work that we have studied in class, such as the criteria used for capital budgeting for investment projects, how capital structure decisions are made, cash flow management, the use of short-term and long-term financing, portfolio management, and measuring degrees of diversification.”
The 2006 Finance Speaker Series included Dr. Thomas Saving, University Distinguished Professor and Jeff Montgomery Professor of Economics at Texas A&M University, Sue D. Culpepper, Executive Vice President and Regional Line of Business Manager for SunTrust Bank, Robert C. Greving, Executive Vice President, Chief Financial Officer, and Chief Actuary for Unum Corporation, and J. Thomas Decosimo, Principal of Decosimo Corporate Finance.
During the course of the academic year, Dr. Lobo has organized several seminars on finance related topics, such as the market for financial services and a certificate in international trade. “These expose our students to experts and practitioners in particular fields,” he noted. “This is a very important form of learning, especially when students link classroom discussions with real world practice. It also exposes students to topics not covered in great depth in their curriculum. On the flip side, it exposes practitioners and executives to UTC and makes them more aware of what we are trying to achieve. Moreover, students learn about diverse career opportunities and the value of graduate education and professional designations such as the CFA.”
The publishing of books, articles, and research related to finance topics remains a priority for the UTC faculty. Recent examples of such work include Dr. Lobo’s regular publication of essays co-authored with senior graduate and undergraduate students, which appear in newspapers and periodicals, and Dr. Brockman’s contribution to a forthcoming book.
“I have been working with well known Chattanooga Times Free Press newspaper columnist David Magee on a book he is currently writing,” said Brockman. “David contacted me several months ago needing some help in researching the automotive industry and in doing some descriptive analysis and compiling some charts and tables. His book How Toyota Became #1: Leadership Lessons from the World’s Greatest Company is being published by Portfolio/Penguin Putnam in November, 2007. This was a very exciting and unique opportunity to use my academic and research skills in a way that would truly benefit the Chattanooga community.”
Dr. Lobo’s writing spans a broad spectrum of subject matter. “These articles stem from essay topics assigned in my international finance courses which I teach at both the undergraduate and MBA levels,” he remarked. “The underlying motivation is to give students an incentive to write well, a skill that is lacking in some business students. The media exposure the students receive from the publication is good for their résumés and also serves as an example for other students.
“The published piece is also, hopefully, useful to the community in that folks get to read and learn about topical issues in international finance such as the impact of political risk on business, the impact of the twin deficits on economic outcomes, and the emergence of China and India on the world economic stage,” he added. “Moreover, these articles enable the community to peek into my classroom and see some of the work that is being done here.”
UTC’s finance department remains engaged with the finance community at large. Each is committed to enhancing the other, preparing students for their working futures.