CFA® for Equity Research?
Hello everyone.
I am an undergrad (non-finance major) interested in equity research. I don't know much about equity research job and I am still in the process of learning about the job, and hopefully applying for an internship next summer.
I have seen a lot of forums on WSO about the CFA® exams. My question is do you need the CFA® to write equity research reports on the sell-side and the buy-side? The reason I am asking this question because there was a forum on WSO where a person pointed out that interns can't write equity research reports as they need a license? Is the license CFA® or are their other licenses? What if I end up pursing a career in ER and end up having a full-time job at a sell-side or the buy-side, are the firms going to ask me to take the exams just so I can write the reports? I know these questions sound dumb. I just want to better prepare myself for a career in ER.
Thanks!
A few years back, but I had to pass four Series exams to put my name on sell-side ER reports - 7, 63, 86, 87. These are generally taken in the first few months of the ER job. The CFA exam is not related, though almost any sell-side shop would expect you to pursue the designation. Buy-side doesn't necessarily have such requirements, but it's much harder to break into from UG.
Thanks, I really appreciate your help!
Two totally different concepts.
Series exams are mandated by FINRA which self regulates the brokerage and advisory industry. You generally have to pass series exams to talk with clients whether you are the buy or sell side. These exams cover various legal and regulatory topics and have nothing to do with your ability as an analyst. You usually have to be sponsored by a broker to take the exam, you can't just walk in as a college student and take it.
The CFA exams test your basic competence as a financial analyst and are completely voluntary. Very few firms require it, but it is looked upon favorably at most firms. You can begin taking the CFA exams when you are in college. Note that you need four years of work experience to qualify for the CFA charter, so you won't be receiving the charter until you are already somewhat established in your career.
If you're a non-finance major, then the CFA can only help.
I tend to agree with this statement.
I don't think there's a downside in obtaining the CFA Charter..., even if you have a finance background.
The CFA never hurts. However, I would look at any firms you are targeting and LinkedIn stalk their employees to see what credentials they have.
The CFA is a beast and requires a lot of dedication, also very costly. But if you truly want to have a serious career in finance, go for it. I just completed CFA 1, you will learn a lot, and it shows employers that you are serious about improving yourself.
Commodities research to ER - need CFA? (Originally Posted: 10/23/2010)
I've been in London for the past 4 years working in commodities - first sales, now research (I wanted to move to research and plan to stay in this for the forseeable future). I have a BA and masters from two top targets in political science/econ - so no academic background in finance.
I'm thinking of moving back to the States for personal reasons, but it seems most of the jobs in research related to commodities are ER positions covering sectors. Based on my current role I have enough industry and fundamental knowledge of mining and metals/utilities. However due to my lack of experience in equities, I'm not sure I would be a strong candidate for those kinds of roles. There is a chance I could transfer internally but I would need to have some fallback options before proposing that.
I don't want to do an MBA as I already have a masters and would prefer not to go back to school. Several friends have done CFA and say it's not really worth it, but I kind of feel like my options in the US are severely limited unless I consider it. Do you have to have a CFA to get into ER once you're a few years beyond entry-level?
in the long run it wont hurt esp if you want to cover companies at some point
It's one of the few areas where people actively look for "CFA" after your name. Besides, you're going to have to learn some of those skills anyway - might as well get credit for it. Also, what about going to the buyside to do proprietary research in commodities for a fund?
Yeah that's what I thought - it's just all my friends who've done it are so adamantly saying it's not worth it, but I suspected that for my particular case it would be very useful. However for me ER would really just be a backup - I like being an analyst but for family and personal reasons I need to start making a move back to the US in the next year or two. Fundamental commodities analysis is very common at banks here in London but in the US outside of the bulge bracket no one seems to do it, which severely limits my options.
My dream would be to work for a commodities trader or fund definitely - but because I've had my entire career in London I don't have as many contacts in New York/Stamford/Houston. Some of my clients are the places I want to work for and I have good relationships with them but I have no idea how I could even bring up the idea of a job with them unless they suggested it first. Like I said I have all the name brand universities on my resume but I feel like getting into the buyside is so much about who you know rather than what you know.
in your experience is sell-side commodity research biased in the same way as sell-side ER? Details/annecdotes of this bias appreciated if you have any.
CFA is significantly more important in the US than the UK, you will need level 1 at the very least, you can do the other two levels once over there.
Buyside is all about networking, industry events are nice in commodities if you're good enough..
CFA Question for ER Jobs (Originally Posted: 05/06/2011)
I'm currently studying for level 1 of the CFA and looking to break into equity research from a sales oriented role I currently hold at a BB. Is there a way to list this on my resume without looking like a tool? i know it usually only matters once you've passed a level or two of the test, but i'm looking for ways to show potential recuriters that I have some applicable skills in the mean time. I'm not getting a lot of responses, as right now it looks like i'm completely unqualified. Also, any other advice anyone has regarding how to approach a change from financial sales to ER would be helpful. Thanks.
It doesn't hurt to have "CFA Level I Candidate" to show interest. Obviously, anyone can be a candidate, but it might open up a talking point.
Why do you want to make the switch? Pay, hours, or genuine interest?
Genuine interest, I hate what I'm doing now (despite actually being good at it) and am determined to make the switch. Also, any ideas of potential firms to target? I know in general of most of the firms out there, but didn't know from ppl with experience in the field which ones might look more favorably on my situation. I'm thinking with my lack of experience that my current firm might not be the easiest route.
Aren't you working at a BB? If you're working in Equity sales, I would assume you'd have a lot of interaction with the reseach guys. I would just leverage those as much as you can at the same time checking for internal openings. Once you see something, you could potentionally contact whoever you worked with about that opening.
If you're not in Equity sales, I would still try to network within the bank to get to people who are in the field. Ask them for a few minutes to chat on the phone. Perhaps grab a cup of coffee. Considering you're already in a front office position, it would be easier.
No, not in equity sales but I have reached out to a few ppl to discuss options but have been coming up dry so far. They've all had me apply through our intranet hiring portal and contact the hiring managers but i'm not getting any responses. I'm getting the feeling that overall within the bank that our group/ppl in my position aren't held as in high regard as I orig thought. This is why I'm wanting to look externally- so that recruiters/hiring managers don't already have a predisposed oppinion about me.
Used it before -- listed as "Candidate, CFA Level I"...couldn't hurt.
Making the jump externally will always be harder unless you have a stacked resume and good contacts. I would just keep pushing harder at the same time knowing your boundaries. Aren't you in sales? Sell yo'self!
The ethics section of the CFA covers how to refer to your candidacy ad nauseum.
As far as breaking into ER, the CFA program will definitely be helpful. Are you at a point where you can go back to b-school? That could be a good transition if your current work experience is a little weak.
http://www.lifeonthebuyside.com/do-you-need-an-mba/
Dude, the kid is in sales.. he is a born networker.
If all it took was sales experience to get into ER, then a used car salesman could get in.
Might want to revisit your ethics section...as noted above, they tell you how to list your CFA candidacy, and esp. at level 1 you should have that shit on lockdown.
I know at least three salesmen who are taking the CFA to try to break into research or trading.
Just out of curiosity, how are you supposed to list Level 1 Candidacy, if at all?
From the CFA Institute website:
Indicate your status as a candidate based on the exam level you are next scheduled to take: 2011 Level I CFA Candidate, 2011 Level II CFA Candidate, 2011 Level III CFA Candidate.
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