CFA Institute faces trademark battle in India

DETROIT — A long-running trademark battle is threatening to derail the expansion of the CFA Institute in what has become one of the fastest-growing markets for financial planning professionals.
On July 17, the CFA Institute, the Charlottesville, Va.-based association responsible for the chartered financial analyst designation in more than 100 countries, will appear before the Delhi High Court to try to retain the right to use the CFA mark and provide training in India.
The court hearing is the latest development in what has become a tug of war between the CFA Institute and the Institute of Chartered Financial Analysts of India in Hyderabad.
“From our standpoint, there really isn’t much to bicker over, but we’re concerned that you have some investment professionals in India that are going to be disadvantaged,” said Jeffrey J. Diermeier, president and chief executive of the CFA Institute.

In addition to the trademark dispute, the CFA Institute also recently has been charged with not meeting educational standards set by the All India Council for Technical Education in New Delhi.
It has not yet been determined whether the AICTE has the authority to regulate the CFA Institute’s educational programs.
Neither of the Indian organizations returned telephone calls or responded to e-mails. However, according to published reports, the turf war aimed at suppressing the expansion of the CFA mark in India will only hurt the citizens of that country.
Support in India’s press
A May 25 editorial in the Times of India newspaper called the educational challenge a “misplaced ban” and stated that “such onerous conditions amount, in effect, to telling everyone to keep out.”
The legal dispute, which can be traced to a 1985 agreement between the two associations, underscores some of the challenges that face the financial services industry as the markets, and the distribution channels, become more interwoven globally.
Last month, India’s Financial Express newspaper reported that the Chartered Institute of Management Accountants in London was asked by AICTE to cease operations in India following the breakdown of a cooperative agreement with another Indian association.
Meanwhile, such organizations as the CFA Institute, which has more than 90,000 members, view expansion in India and elsewhere as part of the natural evolution of the world’s financial services industry.
“India is going to be a very strong market in the context of the global financial markets,” Mr. Diermeier said.
During the two most recent exam periods — June and December — 10,500 people sat for the CFA exam in India. This compares with 4,400 in the United States, 11,400 in Canada, 9,600 in Hong Kong and 10,200 in mainland China.
“We have no profit motives here; we’re not selling soda,” Mr. Diermeier said. “Our concern is that a lot of employers use the CFA mark as a basis for promotion and for hiring, and we’re also concerned that the [legal challenges] are harming the financial services industry in India.”
History of bad blood
According to a statement from the CFA Institute, the two organizations signed an agreement in 1985 granting the use of the CFA brand by the ICFAI.
The relationship between the two groups eventually deteriorated to the point where, in 1989, the CFA Institute formally challenged the “rigor of the ICFAI program.”
Mr. Diermeier refused to provide details on what initially drove the two organizations apart.
In 1997, the CFA Institute revoked the Indian organization’s right to use the CFA mark in India.
Representing the world’s largest financial market, U.S.-based organizations often are the biggest proponents of various forms of global expansion.
But without a standard road map, experiences can vary widely.
“Americans are spoiled by the depth of the U.S. marketplace, and outside the U.S., you sometimes have to aggregate multiple countries to make up a market worthwhile, but you still need to deal with each country’s regulatory issues,” said Christopher Davis, executive director of The Money Management Institute in Washington.
The MMI last year launched a London-based international version of the money management association.
The Financial Planning Standards Board Ltd., based in Denver, has adopted a strategy that uses locally based organizations to promote the international brand
of the certified financial planner designation.
“The standard and the brand are global, but the application is local,” said Noel Maye, chief executive of the board, which is responsible for the CFP mark outside the United States.
Of the 105,000 CFP designees based in 20 countries, half are in the United States.
But the future, according to Mr. Maye, belongs to such heavily populated and fast-developing countries as China and India.
“I see no reason why those two countries won’t be able to match the number of CFPs we currently have in the U.S.,” he added.
LIMRA International Inc., the Windsor, Conn.-based association made up primarily of insurance company member firms, has had an international focus for 40 years, but even that has not eliminated all the wrinkles that come with an expanding global marketplace.
“There are a bunch of challenges, and it starts with the culture and the language barriers,” said Howard Dresher, a LIMRA spokesman.
Of the association’s 800 members across 65 countries, Mr. Dresher said, half are based outside the United States. Thanks to an increased push, he said, the fastest growth now is beyond the U.S. borders.