David Pesce, Senior Vice President of Surety at Hartford Bond, is a 33-year veteran surety underwriter who has advice for bond producers and underwriters who want to advance their career in contract surety: obtain the Certified Construction Industry Financial Professional (CCIFP®) certification.
The CCIFP certification, administered through the Institute for Certified Construction Industry Financial Professionals (ICCIFP), focuses specifically on the management of finances in the construction industry. It is the only certification of its kind that demonstrates competency in construction finance. The CCIFP can stand in its own, or add more credibility to those who hold the Associate in Fidelity and Surety Bonding (AFSB) surety designation. It’s a way to demonstrate a specialization to others in the profession. Certificate holders also participate in continuing education to keep up-to-date on the industry’s emerging trends.
“This certification is, to my knowledge, the only one specific to contract surety for someone who is in contract [surety] for a career,” Pesce said.
As a CCIFP since 2012, Pesce just completed a three-year term on the Institute of Certified Construction Industry Financial Professionals Board and is chairman of its marketing committee.
Pesce is quick to point out the practical advantages of the certification. One of the basics of the job of surety bond producers and underwriters is to assess the financial stability of contractors bonded under the surety umbrella. Studying the fundamentals to pass the 41/2-hour exam and then maintaining certification on an annual and triennial basis lays the foundation for that skill.
“The more you know and understand about those financial reports, the less you will have to question and the quicker you can make your decisions,” Pesce said. “It gives you the ability to communicate and understand the language of construction financial management whether you’re dealing with contractors, banks, or CFO’s.”
“The Financial Accounting Standards Board has changed that to be a performance-based calculation of the revenue recognition,” he said. It can be a significant change to any construction company, depending on what the company does and how its contracts are structured; the new standard can also create internal accounting changes and many changes to financial statements, added Pesce.
CCIFP surety bond producers can explain the changes to their underwriters because their continuing education keeps them abreast of accounting developments. “As a surety adviser, it separates you from the other agent who doesn’t understand it,” Pesce said. Pesce recounts a concrete example of how his CCIFP training saved him a bundle. “I had a circumstance on an account where financial statements were provided to support a bond request, and they did not make any sense to me. Something seemed wrong about those financial statements,” he said.
His CCIFP background led him to seek more data. “The additional information showed there were significant problems with the contractor financial difficulties. So I declined,” Pesce said. “Another surety wrote that bond and another bond after it. Ultimately, that contractor went into claim. It ultimately went bankrupt.” In all, $7 million was paid out in claims because others relied on inaccurate financial information.
When Pesce took the exam, he prepared with an all-day prep course and studied one to three hours per week during the month before the exam. Currently, exam-takers have access to online study guides as well as in-person study groups associated with the local chapters of the Construction Financial Management Association. In addition to finances, exam-takers must master industry-related knowledge on income recognition, accounting and reporting, taxes, risk management, human resources protocols, and information technology. The proctored exam sessions are available at 750 PearsonVue testing sites year round. Pesce suggested that at least three years of construction industry experience is ideal before taking the exam.
The promise at the end of the certification process is a leg-up on peers and colleagues in the surety industry. “The advantage is that it sets you apart from someone who doesn’t have the body of knowledge. Once you obtain your certification and go through the continuing education credits, you stay far more on top of emerging issues,” Pesce said. “Now you’re an advisor that has a body of knowledge above other advisors specific to what we do in the surety industry.”
For more information about the CCIFP certification and eligibility requirements and how to apply for the exam, go to https://www.iccifp.org/ or send an email to email@example.com.