Hi all, I‘m a STEM advanced degree holder currently doing MBA at a well-rated b-school. I‘m fortunate enough to be recruited by a LO AM firm post-MBA and they demand all analysts to become charter holders. I honestly have done too many exams in my life and although I‘m not bad at them I’m quite sick of doing them now. Could anyone enlighten me on 1) is my employer an outlier or is it norm in LO AM shops? 2) why does this qualification matter so much in AM if it is the norm? 3) does studying towards level I/II/III really help investment performance? I would be so much more motivated if it’s actually going to be useful for my development as an investment (equity) analyst rather just something I have to do as means to an end (like GMAT). Any input will be greatly appreciated.
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The CFA curriculum almost seems curated to that exact profession, as an equity analyst on the buy-side and sell-side. LO AM sells their funds to both institutional and retail clients. I believe these AM shops require the CFA for optics more than anything. Some AM shops are more adamant about the CFA, some not as much. I can say this, if they do require you to get the CFA they may pay for it and also give you study time during work or be very supportive of taking time off to study. Also, you’ll be surrounded by the material everyday to an extent, it’s heavy in fixed income, equity and financial statement analysis for the first two levels. It might make it easier for you to pass. If you have the opportunity, especially in this job environment, to land a LO AM role…bite the bullet and take the CFA. If you love investing, the test isn’t so bad. I mean don’t get me wrong, it sucks to study but it’s very relevant to the role. Does it make you a better investor? I wouldn’t say that. It gives you base knowledge and forces you to spend outside time on the material thus potentially helping you in your job as an analyst.
Hi, thanks for your response, which actually makes me feel a bit excited about studying now! Coming from a non-finance background I always feel a bit shy about the technical stuff even with a finance-focused MBA under my belt. If this qualification is indeed relevant then I'm more than happy to study towards it.
Hey there!
1) Your employer is not an outlier. Many Asset Management firms, including LO AM, value the CFA charter. It's seen as a testament to your dedication and understanding of the financial markets. It's not unusual for firms to encourage or even require their analysts to pursue this qualification.
2) The CFA charter is highly respected in the Asset Management industry. It covers a broad range of topics that are relevant to investment analysis, including financial reporting, portfolio management, and ethics. It's a rigorous program that requires a significant time commitment, which is why it's seen as a strong signal of your dedication and competence.
3) Studying for the CFA exams can definitely help improve your investment performance. The curriculum is designed to provide a strong foundation of advanced investment analysis and real-world portfolio management skills. It can help you understand the nuances of financial markets and make better investment decisions.
Remember, the journey to becoming a CFA charterholder is a marathon, not a sprint. It's a significant commitment, but it can be a rewarding one. Good luck!
Sources: Once and for all, is the CFA still worth it?, Would you rather hire a junior out of IB or LO AM?
marketing to LPs. and confirmation bias of others at the firm who did the CFA as well. it’s really that simple and not necessary at all really but the base knowledge i imagine is helpful
OP this is exactly the answer, no more and no less. It will do absolutely nothing for making you a better investor but it’s all about perception
3) No idea about career-usefulness—but—having extra knowledge is never detrimental; many wrong choices that people avoid—without even noticing they're avoiding them—can be often be the result of sub-conscious knowledge that they'd assumed to be "irrelevant"; these might have intangible cumulative merits in life
If you're looking to be an equity or credit analyst or PM at some point, it's very relevant and common as a requirement. Much of that is likely credibility optics when running significant money but it is what it is.
Mostly for marketing / optics but would likely be helpful knowledge given that you come from a non-finance background
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