CFA Just Because?
Hi everyone.
I'll get to the headline, but some backstory.
I work as an officer in wealth management for Merrill Lynch and this just isn't it! The base salary sucks ($68k in Los Angeles) and the incentive isn't great either ($3-7k quarterly…yes it can be higher but you know it all depends) I'm very happy to have just got my foot in the door here to be honest as I came from retail banking. I recently got my MBA in finance from a semi-reputable school here in LA but no brand name.
I'm trying to branch out and do bigger things. I enjoyed Finance a lot in college and I would preferably stay within this realm but I'm doing some soul searching. I always wanted to do IB or PE (after reading what they do) but I feel my resume in WM doesn't match up well with what they're looking for. I'm 27 so I'm a little late behind my peers who went to target schools and became analysts out of college so I'm in a rut. I have become so desperate to make get my foot into IB/PE that I have started to pursue my CFA but thanks to the valuable community here, I found that a CFA doesn't add much value outside of Asset Management/Equity Research or it's marginal at best in context of impressing others! If you made it this far, thank you for reading and listening.
Is anyone in a similar situation? What are some things I can pursue to help my situation? Should I get a certification? A law degree? Lol. I'm trying to do better for me and my family. Thank you for reading.
Comments (26)
Yeah the CFA exams are not helpful for getting into IB.
"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee
Well, thank you for your honesty. I had that thought in the back of my mind but it's nice to hear the honest truth without sugar coating it. Thank you for reading :)
The CFA won't help you get into IB or PE and to be honest those ships might have sailed. The good news is that there's still a ton of great roles within finance that are interesting and highly paid that you can aim toward. If you're really interested in finance and investing, take a look at sell & buy side equity research, family office roles, and private equity fund consulting (being an LP in funds). Additionally, if you're open to sales, which is an overlooked area, you can do extremely well on the distribution/sales teams of mutual fund companies as well as private equity/credit firms and make a lot more than you do now. If you're dead set on PE, look at placement agencies. They're independent firms that raise money for private strategies and it's really a combo of private equity fund research + sales. They also get involved representing some deals/co-investments too.
The CFA can be really helpful for getting into any of the above but won't be nearly as important as networking, interview skills/prep, and being able to articulate why you're interested in what you're applying to and what you can bring to the table. Lastly, don't go do a law degree because you feel you should. Do law because you're interested in it otherwise you'll be beyond miserable.
Thank you for the sound advice. I might have figured as much. Yes, I'm glad I was able to leverage this forum…it may have just saved me several hundreds of hours for little gain. The law degree was a bit of an exaggeration but yes, wouldn't pursue that unless I found a reason to do so rather than just doing it.
Interesting roles you mentioned. I need to do some more research on that. You're right though- soft skills can do me some real good at this point!
Thank you for your thoughts and thank you for reading!
Can you say a bit more about what PE fund consultants do?
Fund consulting/fund research is essentially the process of sourcing and conducting due diligence on private market funds to build a private markets portfolio. Think about every private equity/credit/real estate fund in the US. They all have Limited Partners (investors in the fund) and those LPs, whether they are family offices, pension funds, endowments, or wealth management firms, all need investment teams to evaluate those funds, maintain those relationships and manage a balanced portfolio.
The role is quite macro but really interesting and a good balance of qualitative and quantitative skills. You also get to meet a ton of interesting people, learn about different strategies, and fund sales people take you out to events. WLB is good and comp is solid too. Where it can really get interesting is if you can get involved in co-investments. You won't be nearly as in-depth in the deal as the fund investment team itself but you get to see some deals and be closer to the companies that drive the returns.
Why not just get better at wealth management? If you get a nice book of clients you can work 40 hour weeks while making 200k+. First year analysts are making at least 90-100k at places like BNY Mellon (have buddy there).
Breaking into high finance might be a bit difficult given that you went back to wealth management after your MBA. A lot of top MBAs are used to pivot careers because they have recruiting pipelines. If you went to a school like Loyola or Cal State LA they don't really have great networks within banking or PE AFAIK.
I just took the CFA level one exam and I don't think it's helpful for banking but you should take it anyways since it is useful for asset managers. Try to get your bank to sponsor it as well.
I haven't checked to see if Merrill sponsors a CFA. I know they for sure do the CFP and CRPC. I should check nonetheless!
I went to Pepperdine for my BS and MBA and am apart of Beta Gamma Sigma but I don't feel their Alumni network is very strong. Would have done much better for myself by going to USC/UCLA for my MBA but it is what it is.
Yes, I could just also stick with WM. And you're correct- I have seen the CFAs value mentioned primarily for equity research and asset management and especially in the grand scheme of things- those credentials can combine well with WM.
Thank you for your advice and for reading :)
I'm "a part" of Beta Gamma Sigma too, but being "apart" of them means not being with them.
"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee
Two things you're doing really well: your relentlessness and your willingness to listen (e.g. your decision to hold off on CFA after talking to people).
One thing I'd change: your view of "how it works" could be better, and obvi that's vague so I'll explain. In your mind, the way it works is that certain careers pay better than others, and you just want to land in one that pays well.
The reality is, most "well paying careers" suffer from huge survivorship bias, i.e. you only see the ones who made it up the ladder and you don't see those who began the journey in the same place but didn't make it. Much of finance & professional service is like this, even at the mid-levels. Banking VPs make $500k+ but that's after 3-4 associate years, which involve rounds of layoffs and burnout. Top wealth managers make a ton of money, and yet you're in wealth management and not making the same. Law firm partners make a couple million, but they go to their law school reunion and they're one of only 5-10 people doing that job, in a class of 500.
All these white collar careers pay similar amounts for top performers . . mid six figures at the midlevel, and a few million at the top level. And they all have relatively few making it to the midlevel, and far fewer making it to the top level.
So the question definitely shouldn't be which career pays well. It should be, in which career will you be one of the few who progresses to the higher paying levels.
If you think wealth management is that field . . i.e. you can see yourself winning clients and building AUM one day . . then it makes sense to take the CFA, which will probably help you get something a little more on-track in that field.
If after some thought you'd rather work with corporate clients on deals, i.e. IB type work, CFA is going to be a waste of time.
Whatever you do, make sure you're choosing a career suited to your own specific interests and abilities because they all pay well for those who do well.
Thank you for this, Dr. Dikhinmahas. I need to do some more soul searching and take a deeper look into who I am and where I will be the BEST at rather than just where the money is. As you said, the money is in all the fields but only for the successful ones. Thank you again for reading.
Maybe try L1 and see how it goes/how you feel about the charter at that juncture ... CFAI only cares about fees and make L1 easy to take. Passing it could open a door and help you lateral to something more interesting even if you have no intention of finishing (know several ppl that made career moves without passing all 3). Your interviewer does not need to know that. It seems like you're older given your quote on "do better for the family" and you don't want 3 levels of the CFA ruining your life especially after completing MBA program. "I started the CFA but life got in the way" is then how you explain the bullet on your resume.
People will probably disagree with me but I wouldn't tell your group if you go for it. This reduces pressure on passing and eliminates any questions about why you're taking it.
Probably unusual advice...
Yes, I already made a small investment into L1 so I'll take this level and see how it goes. Yes! I absolutely agree. I didn't tell anyone I'm even studying besides my girlfriend.
Was in a similar situation as you. I just took level 3 and to be frank, it's a grueling exam. CFA is worth it but only if you want to do WM or any research role long term imo. In WM it doesn't matter as much, I will say that all the top performers or at least a lot of them at my firm had their CFA. It's a field with low barrier to entry and a lot of competition but I do think it can be a differentiator in the long run. Lastly, you can find a better paying gig in WM than what you are being paid now. A lot of my buddies went to Fidelity, Schwab making $130k+. Also, check out JP Morgan private client roles. They sit you in a branch and you get referrals while building your book. Once you hit $100mm in AUM you get a higher payout and essentially "graduate" out of the branch role. Great way to build a book. Best of luck in endeavors.
Funny you say this as I have a LinkedIn message from a recruiter at JPM. Lol. I think you're right about the CFA though. Definitely will finish L2 and L3 if I end up staying in WM.
Don't go to law school if you don't want to become a lawyer - I was going to go to Columbia and opted to not enroll. I was interested in pursuing M&A law, but I was mostly interested in the financial side of the transaction. I decided to just stay in finance and plan on doing an MBA in a couple years
Have you ever considered Institutional Sales with a CFA?
PWM background actually helps there. I've known some sales guys with a CFA that play a cool angle of being the smarter sales guy that can communicate with sophisiticated clients in their own language rather than being a stereotypical charismatic sales guy that just regurgitates the research note.
I don't think that this angle makes you necessarily wildly successful but it's an interesting niche to play. The more complex the sales vertical probably the better the fit - derivatives and commodities for example might not be bad.
That's an interesting take on it. First time I've heard this angle. Interesting niche. Another reason to possibly keep the ball rolling that direction…
No ones mentioned this, but if you like investing you could do the CFA and try to get a strategist role at a bank/investment firm. A lot of them have their CFAs and the job seems pretty interesting as you are usually a sort of "generalist" and you get to talk with a lot of different clients
I went through similar path, sort of.
Retail Banking > S&T Middle Office (Risk) > AM Middle Office (Projects/Coding) > AM Front Office (Equity Research / Investing)
S&T Middle Office: Network - Friend from undergrad referral
AM Middle Office: Network - Previous manager at S&T Middle Office moved to AM Middle Office and recruited, had great working / personal relationship
AM Front Office: Internal Recruiting - Had coding expertise (learned on the job - python, C#, R), built cool tools for a few managers (Public Equities and Fixed Income) - Opportunity came up on one of the equities funds in the firm, reached out and got in touch with PM. Found out team had bunch of senior members retire, had budget to hire more but didn't have urgent need. PM wanted a coder in the team for factor analysis. So it turned out to be an exchange of coding skills for investing / research experience.
I think it's really hard to get in IB in untraditional way as they have a very rigid recruiting structure. I've tried my shot at IB while I was still at a bank. Networking with over 100 IB professionals internally, got to two Superdays with LevFin team and Industrials team but eventually didn't get the job. And I'd assume PE is even more difficult as it appears they only hire folks out of IB with plenty of deal experience.
My advice to you is to look at your strengths and desires and also research all other areas of high finance careers and see where the alignments are. Then network the shit out of the space with most alignments (Between your skillset and career). Because everyone is looking for directly transferrable experience, and if you don't have this, only way in is to impress one or two guys in a group/firm to land you an interview.
I did my CFA while I was in S&T Middle Office - of course didn't help towards IB. But as things played out the way it did, CFA did eventually help with AM Front Office gig.
Hope this helps.
Wow. That is A LOT of hard-skills I do not possess. lol. Yeah, this thread has made me a realist. I have already come to peace that I may never see IB/PE/HF etc. haha. I am glad the CFA ended up doing you some good at the end. You really worked hard and you earned it, and I genuinely mean that. I haven't done much networking yet but funny enough, I got the WM gig from my old boss in the retail side who vouched for me so I guess the whole networking thing continues to be true. Oh, and the post was extremly helpful and thank you for taking some time to write.
Sounds like you're ready to leave the 'wealth' in wealth management behind and shoot for the stars (CFA)
Can't tell if you're being sarcastic or not? Haha.
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