Major overhaul to the CFA program
Thoughts?
Short summary of the major changes:
1) L3 will be split into 3 specialization tracks which you pick one - i) Portfolio management (the traditional CFA curriculum), ii) Private wealth management, iii) Private markets
2) To cut down on study hours, L1 and L2 candidates will choose between financial modelling and Python as a portion of the curriculum ('Practical Skills')
3) I think they will make L1 another self-contained program on its own seeing that it's very introductory and most candidates who studied finance know it already. I don't understand what they're saying about this so feel free to correct me on this one
Feel like CFA is such a money-grab sellout now. The dilution of this brand over the years has been insane
https://www.reddit.com/r/CFA/comments/11tvbqj/major_changes_to_cfa_program_announced_by_cfa/jcoictw/?context=3
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They have really been taking some big steps to water down the charter in recent years.
Prior to the recent change, I disagree. Reducing the number of questions only made it harder, as someone with mastery over the curriculum would still get most of the 240 questions correct even after forgetting many things. But with just 180 questions, missing more than a handful of questions due to forgetting (even after covering/mastering the entire curriculum) spells doom-that's the reason pass rates never returned to precovid levels.
But with this new change & the explicit concern about many hours being spent, I think the value might in fact be watered down for the first time (I take pride in having the exam remain difficult, although I admit that there isn't much value in a non-medical exam being that difficult)
That's the problem people have with it. Instead of the charter deriving its value form the education, it derives at least some of its value from artificial difficulty. For example, offering the exam only every so often doesn't really promote learning, it just makes it more of a pain to get the charter. This wasn't a sustainable way to maintain the reputation of the CFA. So now it's jumped the shark and CFAI is just like fuck it, let's get everyone to pay up while we still can.
Looks like for L1 they are just moving some introductory LOSs to be prerequisite readings and they wont ask questions on them. I think they had this already with supply and demand readings, but now the prerequisites list will just be longer. It doesn't actually cut down on studying much.
Generally speaking, focusing more on practical skills is a probably a good thing. It would give employers a more refined screening tool and allow candidates to differentiate themselves from other candidates. We all know that passing exams does not mean you will be a good investor. Passing CFA exams means either you are very smart or a very diligent about studying or both. I am not a dumb ass but I fell into the category of diligent studier, haha. I have a friend who passed all the exams without studying nearly as much as I did. She is in the super smart category.
but then why can't you do a BIWS, Peak Frameworks or WSO course etc and show you have practical skills, and thus give employers a refined screening tool? Plus, CFAI is not experienced in delivering practical skills courses - the data science course it has (probs the closest course it has to a practical skills program) is shit
I know nothing about what you mentioned. Are these skills things graded at all? The practical skills for CFAI is really just an extension of the CFA program. They can also hire people to help with the launch of the product.
BIWS is excellent and your question demonstrates exactly what's wrong with the common professional mindset. People want the CFA, even though the education is far inferior to something like BIWS, because the CFA comes with a credential. And since we are a lazy, pampered society, we've been lulled into a mindset of "get the credential and get the job." Meanwhile someone who goes through BIWS or self-teaches some other way, learns a lot more.
This completely waters down the value of the charter on one hand. On the other, it's good that it's becoming more practical vs. academic
Hard call to make, CFA seems to be pivoting in order to stay relevant. Question is, does all this accelerate its decline as employers no longer value it as much?
As someone who also passed all 3 levels of the old one, it's defintiely a slap in the face. I don't want younger folks to be miserable by any means, but does that mean you need to make the exam far easier and dilute the value of existing charterholders? This was handled poorly
I never foresaw this tbh. Actually reducing the required hours?
When are they proposing to enact this?
Quant (ˈkwänt) n: An expert, someone who knows more and more about less and less until they know everything about nothing.
2024
The thing I always liked about the CFA was that it was democratizing. If you didn't catch one of the other routes into finance (target school, or MBA, or knowing the right people or whatever) then you also had the CFA as a route. That aspect was great.
But the thing that has been going on for a while now, that I honestly find disgusting, is this movement within the organization (including many charterholders) to turn the CFA into a quasi-requirement for jobs. To me this is an obvious money grab by CFAI and dirty career politics on the part of the charterholders. It's like if someone got a GED and then told a bunch of high school grads that they need a GED too. Um, no bitch, I got the education my way (and frankly the preferred way) so stop telling me that I need your piece of paper.
And I don't think it's a coincidence that those are some of the less competitive corners of the finance world. You can't tell me its a coincidence that the most selective corners (PE/VC/HF) have relatively little regard for the CFA and all of the pension offices, allocators, index shops, investment consultants and (maybe?) wealth managers treat the CFA like it's something special. There's something behind that. Basically people who aren't competing at the highest level try to dominate the lower level by creating barriers for others.
So I think it's strayed far from its intended and proper purpose. And so not gonna lie, it's kind of fun watching the CFA lose whatever luster it had. Good riddance.
Same observations on my end. I've always felt that the average CFA candidate and charterholder is a tool. Most of them are knowledgeable, sure, but they exude non-target vibes and non-prestige energy. You won't see a Harvard MBA vying for the CFA, except those who seriously are into investment management and allocation like Ted Seides.
Seeing the Institute destroy itself with its recent policies and changes is just sad, honestly. A reason for that is I feel like most CFAI administrators are non-targets who are so deep up the ivory tower that they don't know how real jobs work
L1 being its own thing could be because a lot of people just go for that as a resume booster.
In every interview I been a part of (both the interviewer and interviewee) no one has cared one iota about the CFA.
Don't waste your money.
Unless you're like an independent financial advisor and want to wow future clients who are in finance themselves, spend your time and money on something else. The CFA will never overtake and MBA in terms of optics, so just don't even, especially if they are making it easier so any idiot can pass.
The CFA designation mostly has value on the buy side. I am going to have to guess you have never worked in asset management. Investment banking firms (based on your title, if it is the truth) do not care about the CFA designation but very few people who study for the CFA exams plan to work in investment banking. I am not sure what you mean by financial advisor, which is different from the roles at investment advisory firms. If you mean, the investment advisory world for individuals, it is not generally worth it to pursue the CFA designation because very few clients will know much about it. If you work at an investment advisory company for individuals, you would be better of pursuing the CFP designation.
Finally regarding the MBA versus CFA designation path, an MBA would mostly be worth it, it you go to a top school. I would not waste time on an MBA from a mediocre school because the degree will not be worth much. If you can't get into a top school, you would be much better off becoming a CFA charterholder. This is assuming that you want to work in asset management.
The good thing is that passing L1 & L2 would make your technicals strong for interviews (no faster way to gain much knowledge than knowing it's an exam with money on the line). However, if the recruitment season is so close, you're better off reading interview guides like everyone else.
I think passing CFA Level 2 before going into MBA is a good idea because you can always postpone starting an MBA. Since MBA Associate interviews leave no room for error in technicals unlike analyst Internship interviews, it's best you're strong with CFA L2, then supplement it with interview guide knowledge when you start the MBA recruiting. That way, you'll crush all technicals better than most of your competition......
My 2 cents (CFA L1 knowledge carried me through this summer analyst recruiting season & I got an offer without having thoroughly gone through standard IB prep materials)
Cue the CFA cultists who will say that your particular observations don't matter because CFA is all about the "buyside" or "asset management", not IB.
Guaranteed that they won't specify which buyside they're talking about. The dream buyside roles that pull most people into the field, are the part of the buyside that doesn't give a shit about CFA. Those roles care about raw talent and job experience. Balancing outside manager allocations for the Montana Teachers Retirement Fund is the role that cares about the CFA.
The buy side includes any company that manages portfolios for clients. These companies include but are not limited to mutual fund managers, pension fund managers, separate account managers and private wealth managers. And yes, Hedge funds are on the buy side.
I think the biggest concern here that is incredibly justified is the whole notion of having the CFA program essentially becoming watered down by the recent changes being implemented in 2024 and 2025. I understand the aim that CFAI has taken was to introduce a practical skillset development program but to have that replace their flagship CFA program instead of act as supplementary or pre-requisite content is the main issue at hand. If they had introduced something along the lines of "Training PLIs" and made financial modeling or Python a mandatory training for those that possess CFA L1 or are studying for CFA L1, then that would've added to the program. It would essentially have been the equivalent of BIWS, Peak frameworks, or CFI content. "CFAI Practical Skills in Investment Banking" as an extension of their institute would have been met with far more approval.
I understand the counter-argument against the difficulty of the CFA Exam, but to completely overhaul the whole program without insights from the actual students or charterholders is quite aggravating. The same thing can be said about the recent CPA reworking to make the CFE objectively easier in 2025. All this will do is create incentives for students to claim CPA or CFA with less effort/education.
Now, you could argue that Python used in financial markets would be fantastic and incorporating a bigger emphasis into its learning would be great. My counter would be not every man, woman and child needs to learn to code. Personally, I've found that the floor to coding is low, but the ceiling is insurmountable. Why would a Software engineer working in Goldman Sachs trust his code to be reworked by anyone other than another software engineer. If you want to genuinely learn to code, then start with the conceptual and contextual understanding of computer science and system design through a series of content with practical guidance in coding as well.
If the aim is simply to teach candidates how to read and interpret code or utilize basic integrations, great, there are a thousand and one courses already around for that. Heck, if you go to Udemy, EdX, Coursera, Youtube, CFI, or even CFA's standalone courses, you'll find all of that. If the aim is to make the exams easier, that can also be done by taking the approach CBV did and break the the CFA L1 into two different exams both covering half the content so the universe of information isn't massive per exam. It definitely would water down the CFA designation, but hey, 300 hours across six books is much harder than 200 hours across 3 books.
This whole thing just seems like they said: "F&ck it, let's just make these courses that weren't selling well replace the CFA Program." and completely ignored the obvious reputation risk. Quite ironic for any institute that teaches ethics and risk management to engage in a cash grab that puts their own name through the sh*tter.
As long as it's easier to pass L3, I'm good
Did the rules make L3 any easier? I never sat for it. I passed L1 and L2, hated every second of the material and actually felt myself un-learning proper finance just to learn the incorrect "CFA way" on several topics. And seeing that L3 was an essay format (which I take to mean even more memorizing necessary), I just said its not worth it.
But if L3 is going to be easier to fudge under these new rules, maybe I just knock it out. Hate the CFA and everything it stands for, but I'm not above spending a little time to finish the job.
Might as well. L3 might be getting easier
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