Future of CFA

Now that CFA is offered twice as frequently, is it going to lose its value? Or is it maybe going to become more valuable by becoming "table stakes" so to speak. Wonder if the content may improve, now that the exclusivity needs to come from difficult material vs. coming from infrequent testing. Curious what people think.

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Comments (25)

Aug 6, 2020 - 2:58pm

For those unaware, the CFA institute will now offer the Level 1 exam 4 times a year and the Level 2 & Level 3 exams twice a year. Previously these were 2 times for Level 1 and once in June for both Level 2 and Level 3.

As for your questions:

(1) I suspect this is going to make the designation more valuable. Employers will want to make sure their interns and analysts actually are on point and this will provide a tool that is more commonly accessible.

(2) I don't think the contents will improve, but I do think the pass rate will drop considerably. For the last 3 years the results appear to have stabilized, last year the resulting pass rates were (correspondingly levels 1-2-3) 41%, 44% and 56%. I wouldn't be surprised if we saw more early signups (smaller costs) and people taking exams faster than they normally would.

Aug 6, 2020 - 4:00pm

That is true. It was an opportunity for someone to sign up for something grueling and then show people that they're willing to go through it. Now that's not as much the case. People may have to do IB analyst programs now if they want to signal their pain tolerance.

Aug 6, 2020 - 10:01pm

I've commented on the CFA before that I believed the value of it to be in the signaling effects of someone putting in the time and commitment to attain it. So from that perspective, and as a current Charterholder, its pretty disappointing to see them diluting the credential this way.

This echos my sentiments to a large extent. I do disagree about it being the full value of it though. It also proves that you know the basics of almost every part of asset management. At larger firms it helps speed up meetings between teams in different parts of the business by allowing them to assume that you're not completely clueless in their field.

I generally see somebody I know on TV on Bloomberg/CNBC etc. once or twice a week. This sounds cool, until I remind myself that I see somebody I know on ESPN five days a week.
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Aug 6, 2020 - 4:37pm

In my view - for a lot of roles in AM, it has already become 'table stakes' - with varying degrees based on what else you bring with it. At a minimum - you have to be working through it. At a bare, bare minimum you have to convince people you are 'committed to it' until you kill it, and maybe they will forget.

My guess is that they, eventually, adjust the curve to make it harder as the backlog from the last missed exam clears - but certainly there will be more out there than before.

I'm on Level II - I hate it. I hate everything about the idea that I pay dues after I'm done, that I've got all these self aggrandizing ethics that are 'don't be a dick head', that I basically 'lease' the right to use the charter, etc, etc. That being said - I know full well that it's going to be worse for me if I stay in AM long term if I don't get it. So here i am.

On the content - it's useful. It gives you a tool kit and if you are in a role that requires it even more so. If you are a fixed income credit analyst, equity analyst, PM, manager research, etc. There are very practical, useful things in the material.

The fucking nonsense of it is that all of these other roles have come into 'needing' it or 'preferring' it - which makes it silly. RFP writers do not need a CFA. Period. It's crazy. It's not a requirement but good hell, I see more job postings out there with 'CFA preferred' or whatever. That's just one example, there's plenty out there.

Sep 17, 2020 - 3:34pm

I think most people that work in a job where CFA is "preferred" don't pay the fees themselves, so it's not such a big issue. At least that's been the care where I've worked so far. And if it's not relevant to your job, it can be seen a bit douchey to add it to your name.

Not sure if having more frequent exams would cheapen it too much, as long as they still make it hard to pass. It never felt like an exclusive club anyway. It's just gonna be more of a money making machine for the institute.   

Aug 11, 2020 - 5:57pm

I am seeing more job posts in AM requiring CFA charter to be considered for the job and I think this trend will continue

But the annual dues are bullcrap. I wish we could eliminate this part.

Born in hell, forged from suffering, hardened by pain.
Aug 13, 2020 - 10:15am

Yes it is. If you are in the investment side of the house at an asset management firm, it will never hurt you when you are going for a role. In some cases, you may simply get passed over if you aren't doing it or aren't at least seriously pursuing it. This goes double if you are swapping into equity research on the buy side (i'm assuming you are sell side right now) - in which case, that's literally what the CFA is made for.

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Aug 6, 2020 - 5:05pm

Is it worth it for a IB Analyst to pass 2-3 levels, if you dont have it clear that you want to work at AM?

Aug 11, 2020 - 6:28pm

I don't think it changes the value of the designation in any meaningful way. The amount of time and effort it takes to earn the certification haven't changed. Now, the value of the designation itself may be going down due to structural pressure on equity research, but that's a different question.

Whoever mentioned that the pass rate will go down is almost certainly correct. Candidates are likely to take each exam less seriously since they have more opportunities to take it. The Institute will rake in cash from this change. If you research the compensation info for the CFA institute execs you'll see they do quite well for themselves, perhaps that had a role in the change...

Aug 12, 2020 - 11:35pm

Surprised no one has mentioned it being a giant cash grab for the CFA institute. I've sat for all three exams... did I learn things? Yes. Was it an effective use of 700+ hours? Absolutely not. This just further dilutes the charter. Sure it helps you get in the door but networking is key for moving to that next role if you're starting in farm team role and you want to move up to the majors.

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