Here's more proof that alternative investments are going mainstream: A new organization wants to create yet another professional designation.

The proposed credential - chartered alternative investment analyst - is being hailed by some as a way for advisers to break into the complex world of hedge funds, derivatives and other exotic investments.

But in an industry already clogged with designations - at last count there were nearly a dozen - some advisers question whether yet another certificate will add anything to the profession.

Robert Levitt of Levitt Capital Management LLC in Boca Raton, Fla., is among those advisers still waiting to see if the new designation will be worth the effort.

A heavy emphasis on some of the same materials covered in the exam for the chartered financial analyst designation may keep some advisers on the fence, he says.

"I looked at it early on, and I was very interested in taking the exam.  Then they changed it to include a lot of stuff that's an overlap of the CFA exam," says Mr. Levitt, who oversees about $170 million and has been allocating client assets to hedge funds since 1998.

"I was interested in doing it for the education [on alternatives], not because I wanted another certificate to hang on the wall.  I don't want to duplicate anything.  I don't have time for that," he says.

Marketing Tool

Some say the industry is on the verge of credential overkill, and that the current credential frenzy serves only to feed the wallets and egos of competing organizations (InvestmentNews, Aug. 26).

The Certified Financial Planner Board of Standards Inc. in Denver, which grants the CFP designation, is considering endorsing organizations for training purposes instead of expanding the scope of its own mark.

In that regard, the chartered alternative investment analyst designation could represent a leg up into an area of the financial services industry that has been difficult to enter.

"When it comes to alternatives, a lot of advisers can only go so far, and then they're like a deer in headlights, not knowing what to do next," says Jeff Joseph, managing director at HedgeWorld USA Inc. in White Plains, N.Y.

Mr. Joseph thinks the new designation has the potential to raise the overall understanding of alternative investments among intermediaries while simultaneously acting as a marketing tool.

"I look at this as a vehicle that will accelerate the move by intermediaries into this universe," he says.  "In terms of the marketing issue, it's wind at the sails."

The CAIA, which has been in the works for about two years, is already being compared to the CFA designation.  That certificate started from humble beginnings 39 years ago, and this year alone it attracted more than 101,000 applicants.

"Thirty years ago, no one had their CFA, but today it's almost like a union card for the industry," says Mark Hurley, CEO of Undiscovered Managers LLC in Dallas.

Mr. Hurley, whose firm has $510 million under management - including $50 million in a recently launched fund of hedge funds - predicts that within 15 years the CAIA designation will carry a similar "union card" status.

"I think the [new designation] is cutting-edge.  If people are going to invest their clients' money in these types of assets, they need to be a whole lot smarter.  And the credentials will eventually become a marketing tool," he says.

More Mainstream

The move by intermediaries into more-complex investment categories was the inspiration behind the new designation, according to Georgi Georgiev, program administrator at the newly formed Chartered Alternative Investment Analyst Association, based at the University of Massachusetts - Amherst.

"The goal is education," he says.  "It was felt there is a need for standards of excellence for people working in the alternative-investment arena."

The CFA exam, Mr. Georgiev says, has an increased focus on alternatives but still lags the financial services industry in moving in that direction.

"This [CAIA designation] is almost exclusively focused on alternatives," he says.

Added Credibility

The CAIA is co-sponsored by the Alternative Investment Management Association, a global trade association based in Zurich, Switzerland, and the Center for International Securities and Derivatives Markets, a non-profit research center at the University of Massachusetts - Amherst.

"One of the objectives here is to make alternatives more mainstream," says Hossein Kazemi, associate director of the center.

"We're providing a test to make sure that people selling these investments know the minimums they need to know, and the designation will also provide advisers will added credibility."

During the first 10 days of registration, which began Nov. 3, people from five different countries applied to take the first part of the two-part exam.

"I don't blame people for waiting to see if this is worth doing," he says, "but we already have 50 applicants without doing any major advertising."

The original plan was to have a three-part exam that would allow more applicants with a CFA designation to skip the first portion and move directly to the parts more heavily concentrated on alternative investments.

But Mr. Georgiev says a three-part exam created too much of a time commitment.

"The recommendations we got were that the CFA overlap during the morning sessions of the first part of the exam would give people a needed refresher," he says.  "We also realized that a lot of our candidates may not have CFA certification."

Growing pains aside, the new designation is getting the attention and a general nod of approval from those representing the alternative investments industry.

"I think the designation is a good idea, because there are so many more people in this industry," says Virginia Reynolds Parker, founder and president of Parker Global Strategies in Stamford, Conn.  "This will give people an opportunity to develop a deep focus on that area of financial services."

Ms. Parker, whose firm has $250 million under management in various funds of hedge funds, says some members of her research team will be taking the new exam.