Is CFA® necessary for investment banking ?
I am doing my MBA in finance at a non-target B-School and wish to enter PE/IB/VC. I was planning to do my CFA® but several doubts have cropped up.
- Will passing all 3 levels of CFA® really give my a HUGE boost (when I say huge boost I mean can I directly enter as a BB IB Analyst after passing my CFA® Level I exam in Dec 2019) in my finance career?
- Studying CFA® will mean I have no time for other finance studies and projects (like solving problems and assignments from finance books, learning modelling, advanced Excel and VBA). So is the opportunity cost justified?
It would be really good if some of you guys could give their opinions on this. The registration window for CFA® Dec 2019 is fast approaching...
CFA is more for Investment Management than I-banking. Since you go to a non-target grad school I would try and put all your efforts into networking to break into IB which will be difficult in and of itself. PE/VC is probably a huge stretch, it is already difficult for those going to MBA business schools">M7 with an IB background. Unless you have significant relevant pre-mba experience for PE/VC or connections i would put all efforts into networking into IB if that is the direction you want to go.
For investment banking, the CFA is not very useful (in fact, most people in banking don't even bother). If I were you, I'd allocate that time to networking, getting a high GPA, and working on your modeling / financial skills.
Getting your CFA in investment banking is like getting your first Rolex. Yes, you worked super hard for it, and you're very proud of it - but no one really gives a shit. It's not going to make you a better banker than the next guy.
If you do plan to leave banking and into ER, AM, etc., it may be worth considering, but since you mentioned IB is your goal at the moment, I would say your time is better spent networking and prepping for interviews.
CFA is useless for IB. Same for VC/PE, I'd argue. Only spot that still admires (see: obsesses) about the CFA is asset management; BlackRock, T. Rowe, Fidelity, etc.
Disagree.
CFA is very useful. However - is it necessary? No.
In addition to ER and AM, Less sexy (but still lucrative) finance functions really place a lot of value on the CFA: Corp dev / bval / restructuring & turnaround consulting.
No real value for IB/PE, but it doesn't hurt.
Just as a quick google check, we can see if Jamie Dimon, Gorman, and cha boi DJ D Solomon have a CFA. The answer is clearly no.
Clearly, time spent getting a CFA is going to be more productive than time spent in front of the TV or playing video games, but it's not necessarily going to be more productive than networking or just general industry research.
You mentioned that you're at an MBA program. What exactly is your story? How does your CFA play into that? If you can't even answer that question, then a CFA is definitely not worth it.
Look, I'm sorry to say this, but your pitch really needs work. The structure of your story kind of wanders around. Even if you don't believe it, you need to be able to paint a clear picture of your career trajectory that is going to help an interviewer understand why they should hire you. I'd also ditch the discussion about being an introvert and falling in love with numbers (bankers aren't mathematicians).
Are you aware that ultimately, banking starts to be more about sales than hardcore modeling? It really sounds like you need to reach out to some bankers in your network and get a feel for what they do every day.
Honestly, I'm a bit confused because you described yourself as an MBA student, but now you're saying that you're applying for analyst positions. Typically, MBAs will go into banking at the associate level, although maybe that would be different if you got your MBA immediately after undergrad (highly unusual).
With respect to your story, you should take what I say with a grain of salt. I'm one dude on WSO trying to give you career advice. From what you wrote, however, I'm guessing that you don't have a good idea of what bankers actually do. If I'm reading that correctly, I think the first step before you start worrying about the CFA would be to try to think about what you're interested in, and talk to some people who can help you understand what it's like to work in their field.
In my experiences I have seen individuals transition internally at a bank from a corporate finance/treasury function into IB after passing the exams. People use it as a way to prove themselves and show that they have some finance knowledge beyond the usual controller/FPA route. Its a lot of work when you could just trying networking your way in from an MBA but the long path might be your path (although nothing is promised).