Is CFA worth it in 2024 or in todays market conditions and demand in the Investment banking sector.....??
Hi everyone, I'm a 2nd year associate at a custodian bank looking to transition to the world of IB/ investment management, etc. I'm currently pursuing ACCA, but I'm thinking of not continuing as its core is accounting/ audit related and I'm finding the finance/investments more intriguing hence the thought of pursuing CFA instead.
I'm curious and would like to know from people who have completed or are currently pursuing their CFA certification or experienced in the finance/ IB field if CFA is worth pursuing or not.
I have seen a few people's opinion that it's an outdated course and isn't worth pursuing some say its worth it and is very much demanded in IB.
I'd like to get more insight on CFA from the community of the finance world.
What are your thoughts? Thanks in advance.
From what I have been looking, CFA is a good way from people who don't have a background in economics or finance at all to enter in banking. Although CFA is an extremely hard certification, but is still IMO much rewarding. But you should know, that only the level 1 is not going to change much, it's like gold if you can have the 3 levels. With CFA 3 you probably need like 1 year for each level, but after that you can easily break with banking in London, in a top or still very good bank.
I'm from Portugal and one guy from my university (Porto university of economics) did here the bachelor and then did a masters in a shitty university, and then did 3 years for each CFA level and it's now working as a VC on Deutsch bank, so I believe that's an awesome IRR
really good to hear testimonies like this. I am always conflicted on this question because us-centric online sources will always say cfa is totally useless and people who do not have $200k to fork at a target undergrad/MBA should give up on IB.
CFA is completely useless for banking sorry to break it to you. Target MBA or MFIN will give you a better shot, even the ACA is probably more favourably looked upon in investment banking than the CFA. At least you have ACA specific programmes at Rothschild, JPM, Evercore etc but there isn’t anything similar for the CFA and there’s a reason for that….
The CFA is useful for Asset Management but even then, it depends where you are, at my fund no one really cares you can get it if you want but if you don’t have it no one cares.
If you have an undergrad in finance/economics or have been working in the industry even the knowledge is kind of useless tbh. It also really depends on what type of job you want to do, even in asset management I’d argue you’d only find the CFA “useful” in FoF roles or maybe multi asset roles (but for these economists will fair better than CFA’s).
Think about being an equity analyst on the buyside or a banker your job is to understand a business/an industry and how to value it… the CFA simply doesn’t teach you these things. Your time would be much better spent completing a course in modelling, networking and keeping up with industry news which will teach you far more than the CFA will.
it's not much use for banking in the US. for Canada, even branch managers have a CFA.
You want to be careful with how you spend your time. I noticed you were very general in your goals ("IB/Investment Management, etc"). It sounds like you just don't like your current job and want to do something more interesting. Problem is these are all competitive fields and you need to be really well prepared to get a seat, and the prep for each is different.
For IB (at least in the US) a CFA would be an awful use of time. Nobody cares about it.
For roles where the primary function is understanding a business . . think fundamental HF, or equity research, or PE/VC . . CFA is also not a great use of time here. Not as awful as doing it for IB, but not great. Many of these folks have the CFA, but they just picked it up along the way as they were figuring out their career. They don't use or need it, and won't give much credit to a candidate for having it.
For the remainder of "investment management", which can be a very vague field to define, it can be useful and is respected. Frankly I have to twist my head into a pretzel to figure out what those folks do in their jobs . . it's a lot of like, portfolio analysis and allocation type stuff . . but they'll tell you the CFA is valued in their line of work. Just understand that it's very different from analyzing a business, which the CFA doesn't help you do.
As for it being outdated . . it's true that in recent years, it's lost some value. One reason is that they made it easier to obtain. Now you can take the test more often, failure is less costly, which means you can afford to study less. So even if the letters have lost some value, the return on time might be just as good or better than before.
Thank you for your thoughts and insights. I appreciate it.
I said about ib/investment management in a very general way its not because I dislike my current job its because there is no growth in terms of gaining skills, knowledge and pay is very low where I currently work at, as my work is only copy and pasting without logic (major part of my work is).
Hence why I was thinking of pursuing CFA as I only have a bachelors degree.
I would disagree slightly with the comment above. The CFA is almost a requirement for equity research associates and analysts. Also if your goal is investment management, the CFA is strongly recommended and encouraged by most institutions. Many of the PMs have it and while they may not use all the skills from the designation, it demonstrates a certain competency to prospective investors. Also a word caution, the CFA is not easier to obtain, it has become harder as they no longer release previous editions of the exam to candidates and the work required is still the same. If the goal is corporate finance and banking, the CFA is less relevant. If you are a recent graduate, passing level 1 may help.
Then do you think pursuing a masters in finance/MBA is better than CFA for IB and to grow in terms of career etc.
Would recommend MFIN from a target uni if you can afford it
I have worked with a couple people with CFA's and they haven't seen any massive benefits from getting it unless they are in front of someone who also has one. Ultimately they have stated those who have a CFA respect the amount of work that goes into getting one and see it as solid value for the most part. Those who I have seen with one are usually people in non-finance roles
There are offensive and defensive activities, CFA would be defensive, ie. most people in your industry has at least one or two levels and if you don’t do it you’re compared negatively against peers that do, but the CFA won’t get you a job on its own.
Tbh if you spend the same amount of time studyjng for gmat as you do for cfa, you will likely score very well and be able to break i to a top 10 business school., and that will help you get the role you want.
IB doesn’t care if you have the CFA designation. Honestly wouldn’t even take it into consideration when deciding between two candidates.
No (from a cfa charterholder).
CFA Charterholder here. For IB, nope. Not relevant. Maybe some of the things you learn in level 2, but it’s more for ER, Wealth Management, buyside (though not sure why PE or VC would care).
I got the CFA before they made all these changes that make the designation much easier to get. It’s value then wasn’t as strong as say 15 years ago where passing level 1 could help get you an interview.
Also - experience trumps CFA every time. I’d take someone with 3 years of investing experience over a CFA with 0.
If you want to get ahead, study for and get into a top 5 MBA. Much better odds of landing somewhere.
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