TL;DR: Is the CFA worth it for breaking into FO public markets roles and does it help you once you're in them? Please give answers from a recent perspective, from a respectable source (if not first-hand).
Apologies in advance for the lengthy post....
I feel like this question has not been properly answered for some time.
Some context: I'm in my first year in SS ER in London, I've passed Level 1 and always thought that I'd do all 3 levels to help break into LO AM. I've realised I haven't given this as much thought as I should've for something as time consuming as the CFA exams. I've asked management at my bank and they don't really care about the charter. A minority of the floor has their charter (and/or pays their fees) from what I can tell.
I've found that most people giving advice on whether to take the CFA have some sort of ulterior motive or are out of date in their perspective: either they make money from its continued uptake or they took it themselves and think others must also share the pain or took it themselves 10 years ago and are not aware of the changes in the hiring market. So...
I want to answer two main questions:
1. Does taking the CFA help you become a better analyst/PM?
2. Does the CFA help break into AM/ER/HF? And, if so, in what specific cases (asset class, candidate background etc.)?
Question 1 is subjective - for those of you who have at least passed Level 1 and work in AM/ER/HF etc., it would be great if you could share how you feel CFA has impacted your capability, if at all.
Question 2 is anecdotal - for those who have been on hiring committees or interviewed for roles where holding the CFA could be deemed relevant, it would be great to hear how a candidate's CFA progress or lack thereof has impacted decision making.
If this gets enough responses, I'll edit some main points into the post or make a new post for future use. I'll also be reaching out to the few head-hunters I know to get their perspective (feel free to do the same if you can be bothered!)
CFA won't help you become a better analyst, it's about how well you can prepare and regurgitate information. For sure you may learn some things but there will be a lot you don't need to know that you will also learn. I think CFA is best for people who want to move from MO/BO into FO who will learn the most.
To me CFA is a tick-box exercise. It's a rite of passage that signals people you are smart, interested and dedicated to the industry BS only (AM/HF) but others still respect it. When I passed exams and achieved my charter my bosses all congratulated me (most had the CFA and respected the work to get it). FYI I'm on BS so thats probably why.
If you look at AM/HF IPs, so many have the CFA so will ask why you havent done it. While it might not prevent you from getting a job, it may help you stand out. Some larger AMs also expect you to get CFA to help climb the ladder (it's not required but not getting it will be frowned upon). For headhunters, they really rate the CFA. I found that after I got my charter, more recruiters returned my calls (note that I switched from a different FO role to Eq analyst)
I saw the headlines that the numbers taking the CFA has fallen again. I think this is a natural consequence of so many people taking the exam over the past decade as its prominence has risen. Despite the number of CFAs increasing, the exam remains as tricky as ever so its still a very respectable qualification. I do think you may see an alternative qualification come to prominence in the coming years that improves on the CFA but for now it is still the gold standard despite its flaws.
in terms of hiring, in my experience having CFA helps most with getting past that first hurdle of HR screening. If HR see you have a CFA it ticks a box for them. That is not to say though that it will automatically get you an interview, i just think it helps.
The CFA alone will not get you a job but as monkey said its a signalling thing. People know you have to give up social life to pass it. I personally recommend it to most but it is NOT a requisite. The reason I say that is that in my previous firm they like people of a certain rank having the CFA, it meant that it took you longer to get promoted etc. if you didnt have it. Additionally, so many PMs and analysts have it, people might wonder why you dont have it (but most will recognize its not be all and end all).
I think if you have good SS ER experience at a good shop at a ranked analyst it shouldnt matter a huge deal. You are more likely to be asked why you dont have it than a question around your experience of taking it etc..
IMO, I think in the same way some people on the BS like to hire from BBs or AMs they used to work at, CFAs like to see other CFAs because it validates them taking it lol
those are my experiences / thoughts
I agree with this sentiment. However, I will share my experience getting the CFA.
Are you under 35? I did it within my first 3 years after undergrad. It was a meaningful promotion/comp leverage tool against my peer group. Note, several star performers in group had it and was well perceived... may not be the case for everyone. When I'm in client meetings now, it definitely helps validate me as a younger guy. Also, helps when clients have it and create common ground others may not. Overall, I think if you can complete by 30 is a high IRR and starts to diminish by then.
Would add the tradeoffs for studying also get higher as you age. For me, it was a little less xbox and daydrinking on the weekend. CFA is not a silver bullet and it is what you make of it. I would add the CFA societies depending on your city are great for networking and job opportunities. Good networking for both your peer group, but also networking up to more senior folk. Definitely, some big boozing events/boozers as well, which is an underrated positive.
I used it as a promotion lever and viewed it as a cheap MBA for networking. Think it's great for this.
1) Not really, although if you have come from a non-finance background (like I did) some of the accounting / valuation / portfolio theory stuff in level 1 & 2 will be useful background to have. There are much cheaper ways (time & money) of learning this stuff however. Level 3 content is almost entirely useless (from an equity analyst / PM perspective).
2) Still very useful for long-only / more 'long-term' HFs (I have no experience of trying to recruit for a MM platform so no idea if they value it). Mainly as a signalling device and mainly for making that first move across from the sell-side - it's a crowded pack of people trying to do this and helps you at least get past the HR filter and get in front of the team that is hiring.
I would typically ask a candidate why the haven't finished the programme / why they haven't thought about it as part of a 1st round interview. Absolutely not a deal-breaker for me, just a conversation starter. I would care far more about quality of their stock pitch / how they think / how they respond to pressure.
But to emphasise the importance of 'passing the HR screen' / 'passing the headhunter screen': the last time we hired a junior analyst we hit high 3 figures in # of applications. A lot of these will have been completely irrelevant (wrong amount of experience / lacking the type of experience we explicitly asked for), so easy to rule out immediately, but as a hiring team we only spoke to ~10 candidates ourselves in the first round. HR (or the headhunter if it's a small fund with no internal HR) have to do a huge amount of filtering before anyone gets in front of one of us. That's the filtering things like the CFA help with - it's just another way of getting that funnel of applicants down to a vaguely manageable number.
So I'm in the same position as you rn. I did my undergraduate degree at a non target, terrible education made me go for the CFA. I passed level 1, then passed level 2 while doing my master's degree at a target. Right now I don't have the luxury to just walk out, so I'm doing level 3 now. So take my word with a bucket of salt because I only started my ER internship last week.
If it weren't for studying the CFA I personally wouldn't have become this knowledgeable about analysing companies and what makes them good or bad. The CFA mushes together all the financial products and rigid but extremely practical quantitative ways to price and analyse them. In contrast, in my MSc we learned how to use calculus for time series analysis, when on the job you will never do that. The practicality of the CFA is quite stunning. I personally don't think this abundance of knowledge can be compiled in a realistic way elsewhere. I hope and expect it does make me a good analyst.