I am in a 5 year accounting/finance program where in my 5th year I will take the CPA exam. Will my knowledge of accounting help on a FI or Equity desk? Does the analysis in either of those groups ever consist of running through financial analysis?
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no your better off taking quant finance courses at a local school rathern than a CPA
dipstick you dont know what your talking about. Glad to see we are back to disagreeing again.
Having a CPA cannot possibly hurt you when it comes to having a job in trading. Being able to really understand the financial statements and the various nuances that can come with accounting can help you a lot with understanding the companies you are trading in.
You need to be able to think like a trader but still have the basic knowledge required to understand the statements at a deep level.
"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.
can you turn your face to the left so i can spit on your right cheek? from my understanding if this dude wants to get on a fi/equity trading desk then he should go for financial engineering.......sure if he wants to go through CPA exams then by all means do it but your skill sets will only be useful in fundamental analysis or in IB.
I was thinking in perhaps HY FI where credit analysis is important that my skills might be of use. Is there any S&T group or specific class that strong accounting skills could be beneficial?
Risk arb, special situations/distressed.
Quant trading is overrated and terribly misunderstood. A few key players totally dominate the market so much that its too competitive for others to even bother entering. The term is so ridiculously abused on this site it is so distorted from the reality of what it really is.
"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.
to echo trade4size's comments, the CPA is a lot of work (ask anyone who's prepared for it) but will set you up nicely for HY and also IG and event-driven type analysis- also if structuring comes back to some degree in the next few years, a CPA will be very useful for designing tax-efficient structures with a desired accounting treatment- important considerations for a broad range of corporate clients.
On the whole, it's waaaaay too much work for trading. To earn the title in NY, I think you need 2-3 years audit experience. By the time you've put in that much work, you'll be pegged as a corp fin guy. You need to know financial statement analysis to trade credit, but a CPA is overkill, and it'd be more efficient for a bank to bring in an undergrad accouting major as an analyst than a CPA as an associate.
I forsee the transition from audit to S&T being nigh impossible without an MBA or a strong alumni contact.
I think it's possible to shop different jurisdictions to find a state without the onerous audit requirements- I'm pretty sure Florida and Colorado just require 1 year of general business experience if you meet the 150 hour requirement (i.e. 5 years of classes). Other states require a CPA to certify the work experience was broadly relevant (your manager does not have to be a CPA).
Many states allow you to use the letters when you pass the four exams, but you wouldn't have the license to audit public companies without the 1600-3200 hours; if you're fine with not having an audit license than I guess it would be possible to be a CPA a few months from graduation after studying tons for the exams.
I was looking into this a couple years ago but I didn't have enough accounting classes to take the test in my home state (CA).
I am already getting enough hours to take the CPA. My program is a 5 year program where I get a BBA in Accounting and MS in Finance. I am currently in an energy S&T internship with a BB and was hoping to transfer over to their FI group for FT after this summer. I am hoping that mentioning that I will be a CPA upon graduation will help me make this transfer.
How valuable would the CFA credential be for fundamental S&T desks such as IG and HY? I figure it would be applicable, since it covers a lot of accounting and research type information..
The CFA is very useful also (and of course a ton of work, 250+ hours per level for 3 levels). People tend to think of the CFA primarily for equity research but most fixed income analysts and PMs either have the designation or are pursuing it. Level 2 covers a lot of mergers and pension accounting- which are given less emphasis on the CPA exams. The upside to the CFA is that one doesn't need a certain major in college or required coursework to take the exams- the downside is that four years of relevant experience are needed before you can have the letters behind your name.
powertime - why didn't you mention this in the original post? this makes the possibility much, much higher.
it's odd that you know a lot of corp fundamentals but are on a macro-based desk. take advantage of your internship to network - get to know both jr and sr level people on desks you'd like to join, follow their markets, etc. Also contact HR and see if it's possible to rotate through there. in fact, the best way to get the job you want is just to start doing it - hang around a HY desk and offer to help a desk researcher after-hours.
In FI, HY is probably your best bet - though you might end up on loans (interesting place to be now, though not very liquid in general). You could also end up on the CDS counterpart desk. I think equities is a more commoditized product and I don't think the sales people and traders always know the fundamentals as well as a credit analyst for the same company, in general, but it'd still be a good bet. Personally, I've always wanted to sit on an options desk.
in a few years, it will be at the least an unspoken requirement for any kind of research or pm.
it's useful for s&t, but you could easily be pegged as too much of a fundamentals guy if you don't pass screening for trading (quick with #s, fast problem solver, etc).
i'm actually going for it right now (took lvl 2 in june), and I hear from a lot of people that the most impressive thing about the cfa is what it implies about your work ethic - pulling 60+ hour weeks and still having the stomach to do 2-3 hours of financial studying for 19 weeks shows a lot of stamina. It's a great screening mechanism.
I definitely am a bit worried about getting pegged, as I am more interested in macro desks. Do you know anything about whether the CFA is beneficial for getting hired at macro HFs?
Sint ex est deserunt maiores quaerat iste. Labore minus ut quia eius iste aspernatur.
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