CFA and I-Banking

Its a great resume booster. Do it.

to answer your question though, it probably won't help you at the analyst level. it will however when you're looking for exit opps

Agree with the above post. A CFA is a great distinction, but it won't do much for you at the analyst level. It will, obviously, help you down the road though.

Talking from my personal experience, may say, that the charter appears to be important at the post-analyst level. Actually, it is near impossible to get the charter earlier, as you need several years of full-time qualifying work experience to be eligible.

What the CFA charter may help with in investment banking? 2 things mostly - direct (without an MBA stint) associate promotion, and a move to a top bank (given you have solid experience).

Thanks for your responses. Guess it is worthwhile to take it then.

Another question then, is it worth taking one of the prep courses (Kaplan or whatever) or just to use the CFA materials? Can anyone recommend any courses they have taken.

I have been doing a fair bit of research on the CFA charter, and it appears to me that the designation has been devalued by the plethora of candidates who have successfully passed Level III and yet, aren't in any finance related fields.

Exit opps appear to be mainly in the area of investment management. As for private equity and hedge funds, relevant work experience appears to be far more important than passing all three levels.

Of course, this is based on my limited knowledge. Would appreciate it if WSO veterans like dosk and gametheory could share their views on this.

I would disagree with the above posts, however, I am not in IB, I am in PE. I think taking the CFA as an analyst is extremely useful. A lot of what I learn studying I can apply almost immediately, especially the financial statement analysis, equity valuation, and corporate finance, which are major portions of the exams.

Also, I would definitely suggest getting a study course. I used Schweser for both level 1 and currently level 2 and it has been really useful and much easier to work through than the CFAI materials.

What about analysts in S&T? Will doing the CFA add value? Or are there other suggestions?

Thanks!

With regards to prep courses.... Hard to say. Personally, I only used CFAI materials for all 3 levels, though many people say Schweser is better.

I'd say that if you have/can make time to study, then by all means go for it. Lack of time is the main thing that limits me from taking it. Getting the CFA designation is definitely something I would want to revisit after life in IB.

OP: Out of curiosity, are you planning to get an MBA as well?

When discussing the advantages/usefulness of a CFA in IB, you can't help but to bring in the good ol' MBA in the mix.

Stating the obvious here, but different people will tell you different things.

For the most part:
People in IB with a CFA and no MBA will tell you that the CFA is great and that an MBA is a waste of money, too much opportunity cost and are a dime a dozen.

People in IB without a CFA and a top 15 MBA will tell you that the time spent preparing for a CFA is better spent getting into a top 15 MBA program. Top 15 MBA > CFA

People with both CFA and Top 15 MBA... are just rock stars and would tell you to go for both.

I don't mean to veer off a tangent and bring in a discussion about MBA vs CFA, but from all I've been taught, told, etc... while a CFA does hold a considerable amount of distinction, a well respected MBA will be the dominant credential in IB. I don't know how much I would defend that statement, but I just thought I'd throw that out there.

Best case scenario: get both. We can all agree that they are totally complimentary of each other.

(I am using "15" as an arbitrary number)

I just don't see how someone working as an analyst has enough time for a CFA. You can only get level 1 before starting as an analyst, and you will have another 2 years to go.

It depends on where you want to work, in investment management, it's a great distinction but with PE and hedge funds it's not as relavent.

Quick question: Do most companies reimburse you for the CFA exam fee, manuals.....etc? Only on the condition that you pass, or reimburse you nonetheless?

Most companies only reimburse only once per level you attempt..so if you fail once, you would have to pay for it the next time you take it. My current and previous company follow the same policy, so I would assume it is standard across the board.

As someone who reviews resumes and decides who gets picked or i-banking interviews, the CFA means much less to me than other qualifications/experiences.

Here is how I think of it: if you have a ton of free time and nothing to do, sure go ahead and take the CFA.

But for almost everyone, the huge amount of time you put into studying for it would almost ALWAYS be better spent getting work experience in finance. I value someone who has done a few deals whether on the PE/IB or even HF side (more "investments" there obviously) over someone who has a CFA any day of the week, hands down.

In PE/IB/HF in general, people mostly care about how good you are/how much deal experience you have... yes a CFA is nice to have but in all honesty a top MBA makes a MUCH, MUCH bigger difference and is often the difference between a BB IBD job vs. nothing.

Perhaps in Investment Management and other finance fields outside the typical ones I mention above a CFA does make more of a difference; I am not an expert on those and am not sure offhand.

At the Analyst level at an investment bank, a CFA is not at all necessary or even useful... the analysis you do is a small, small subset of the CFA and you certainly don't need everything or even close to everything on there to do well.

I tell everyone who asks me about the CFA on my site, in-person and on this forum the following: Yes if you have spare time go ahead and do it, but if your goal is breaking into IB/PE/HF, go and get some work experience and that will be much more useful on a relative hour basis.

http://www.mergersandinquisitions.com/
Mergers & Inquisitions

Once again - it is pointless to talk about CFA charter with regards to Analyst-level IB recruiting. One needs 4+ years of full-time qualifying work experience to be eligible, and with that much of experience, it is unlikely that one will be considered a candidate for analyst position in investment banking. Hence, comments of dosk17 (above) seemed strange.

http://www.cfainstitute.org/cfaprog/charterholder/membership/work_experi...

You're right. Did they change this recently? I don't remember the work experience requirement always being four years.

They changed it quite a while ago. I finished the program in 2007, and was already subject to new rules with regards to work experience.

I can echo dosk's position on the matter. Talking to my bosses from a few internships, they advocated CFA as a more IM-type cert. MBA's are recommended (if it's a good school) because they not only hone your business skills, but they also allow you to network with the upcoming movers-and-shakers.

Again, I can't speak from direct experience, but I have heard that quite a few times. Hope that helps. (I was looking into getting CFA level I out of the way before I start in July, but decided against it on this advice).

Yes, it does take 4 years of relevant work experience to actually earn the Charter.

However, that doesn't make Dosk's points invalid. At the analyst level no one's going to expect you to have the work requirement completed. You can still put CFA Charter Candidate on your resume (completed levels I, II, and III and waiting on the work experience) and people will notice.

There's a misconception out there that it's only useful for portfolio management. Bullshit. It's an incredibly broad base of knowledge covering everything including quant, econ, financial statement analysis, equity valuation, fixed income valuation, structured products, derivatives, real estate, and hedge funds. As an analyst, sure you're not going to use most of the stuff you learn in your everyday work, but you're exposed to nearly everything at a base level. Once you get into Level II curriculum, you're focusing much more on valuation.

It's very time consuming and you can only take Level I in June / December and Level's II and III in June. So the quickest you can complete the tests is 18 months. You can take Level I your senior year (and Level II if you do a masters prorgram) so it's definitely feasible to have 2 of the 3 levels done by the time you start work. Level III is the easiest of sections and is really more of just tying it all together.

Although I don't think the certification is more relevant for HFs and asset managers, I do think that the certification is much more valued at those shops. There's plenty of shops out there from what I've heard that really only like hiring CFAs or force their employees to earn the designation.

One thing that hasn't been mentioned is the edge it gives you over another equally qualified candidate. Say you're interviewing for a HF and the interviewer (a CFA) has 2 equally qualified candidates, but one's completed 2 or 3 levels of the CFA. It's almost a guarantee which one he's taking. The interviewer knows the amount of time / effort the CFA Candidate has been putting into the designation. It's basically another selling point that indicates dedication and interest in the finance.

Although I haven't gone to B-School, I really think the CFA cert process is on par with any finance education you'd get at the MBA level. I'm going to get my MBA at some point, so choosing the CFA was never an MBA vs. CFA type decision for me.

Anyways, sorry for the long post. I'm sure I did some rambling. Anyone who's interested or has some questions, feel free to post them here and I'll do my best to answer them.

Well, clearly. Nobody's going for the CFA thinking it'll be their meal ticket to the buyside (or sellside, for that matter). Either they're already in finance (thus already getting relevant work/transaction experience) or their trying to break into banking (still in school or in another unrelated field). Either way, it's still worth pursuing, so your statement really doesn't make much sense to me.

People know what a pain in the arse the CFA is; if you have it, it is always nice to put on your resume.
MBA vs CFA is not even a debate, both are completely different things.

Just being signed up for level I impressed my interviewers (at a BB), just having level I shows my future colleagues that they did not completely screw up by hiring me IMO.
I'll be taking level II next year (as opposed to what someone said, by suggesting to take level II during your masters; I strongly advise against it, unless you want to screw up your masters degree).

I'll be doing sales, so the CFA is not even that relevant for me, yet I will still pursue the designation. If you want to do an MBA down the road, a CFA sure will help you get into a top program.

I have a psych exam tomorrow and my brain is fried, sorry for all the incoherences in that post.

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Remember, you will always be a salesman, no matter how fancy your title is.
- My ex girlfriend

Would like to agree on the thesis that MBA and CFA are very different things. Indeed, CFA is all about hard skills, while MBA is to a significant extent about soft skills, and these two things are not substitutes of course. Complements yes.
Still, what is very good about the CFA program compared to MBA, is that you do not lose 2 years of your career - thus continuing to earn experience and income.

You shouldn't be signing up for it if it's enough to screw up anything (whether it be work or school).