How to answer - “Why CFA?”

illini29's picture
Rank: Baboon | banana points 132

I know CFA is mainly for equity research and fixed income research roles, as it is heavily pushed in those fields, but what about other fields such as real estate?

I know IBD isn't crazy about it, but you can't say it is irrelevant.

My personal view, and I know some may disagree, is that it provides incredible foundations for the material. I am a fan of the program and it certainly helps expand my knowledge of several different areas in finance. I began doing it while I was in undergrad, passing L1, and now I'm going after L2.

How would you guys answer the question of "why CFA?"

Would you leave it off the resume for roles that don't place emphasis on it?

For me, the answer is clear: "I want to join the workforce, but continue my education through self study on my own time. I believe that the CFA program offers tools that can be used across several industry's and add value you the team/firm"

How good is that answer?

Sometimes I get the feeling that the prospective employer is cautious and fears I will jump ship immediately after clearing all of the exams. While it isn't untrue, I am certainly going after some of the more analytical RE roles.

Thoughts?

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Comments (15)

May 21, 2018

That's fine. For sure leave it on; there is need to be weird about it. Most people will respect it and your intellectual horsepower

May 23, 2018

Do you think it can help at all in other finance fields besides ER, FI, Investment Consulting?

Will it benefit me in RE for example? If I am correct, in a lot of fields (IB, PE, etc) it's not that it doesn't matter it just isn't really pushed. Plus, they work long hours.

May 21, 2018

Won't help you a lick in the blocking and tackling of real estate, but it will help you in the sense that the knowledge you acquire going through the program will make you a more proficient investment professional. You may be better off putting 300 hours into drinking beer and playing golf (i.e. networking) than pursing the CFA.

You'll likely never get paid anymore for it, so do it because you want to, because you sure as shit don't have to have it.

May 23, 2018

That's what I imagined. However I wonder if it's the same for even the most analytical RE roles like complex debt lending, REPE, and so on.

Once in a while I come across CFA charterholders in those positions.

May 21, 2018

It's not required for any role that I'm aware of; we're not splitting the atom or anything.

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May 24, 2018

While I don't think the knowledge gained through the CFA program is particularly applicable to real estate, it surely doesn't hurt. If nothing else, it shows others that you have atleast some level of competence. You mentioned it potentially being useful in the more analytical RE roles, however I think it could have an indirect use in investment sales as well - many of the institutions you deal with would recognize the designation, no?

May 21, 2018

You're getting zero additional business as an investment sales broker from having the CFA. Not once has any sponsor or their partners been like, "we're picking Joe Blow, CFA to sell this deal over a) the guy who sold it to us or b) the broker with the highest price." You give deals to the guys you know or who sold you the deal, and you generally want them to work at a reputable shop so that you can cover your ass to your investment committee if you miss the target pricing by saying we hired a big dog broker from CB, the market just spoke.

Credentials are even less meaningful in the investment sales world than on the buy-side. Insitutional investors like seeing people with MBA or the CFA because it provides them cover from their bosses in the event that a fund they invested in blows up, because they get to say, "How could we've know that Fuckhead Capital Partners was going to blow up? They had such a good track record and pedigree. One guy worked at Blackstone and had an MBA/CFA!" It's a check mark to them that allows them to pretend they've reduced the risk on a venture, but they really don't give a shit; they do business with people they've known for a while and they trust, end of story.

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May 24, 2018

My main point was that it's not going to hurt you in real estate. I'm not saying it will greatly enhance your career prospects, though I believe saying there is zero benefit is overly dramatic.

While I agree with most of what you've said, I wasn't implying that it's going to be the sole deciding factor in winning business. Holding all else equal from the seller's perspective (multiple reputable firms in a market, no strong ties to any team/broker - perhaps this is the only property they own in that market which they have held for 20 years) why would they not go with a broker that is a CFA Charterholder/MBA over someone who isn't?

As I said before, having these designations/education shows competence and a willingness to work hard, neither of which are negative attributes. As well, there is the psychological aspect of liking others who are similar to you - if the person choosing the broker has the same designation, who do you think they will pick, holding all else equal? Same argument could be said for a broker that went to the same school.

May 22, 2018

That seems like a solid answer, I would add the element you mentioned before in that you wanted to expand your financial knowledge to be more broad and that you enjoy challenging yourself so you took initiative.

Clearly the CFA program and knowledge you are learning from it is interesting and passionate to you and have value so I would definitely include it. Although the technical applicability may be limited, any leader will respect and see value in your initiative to learn on your free time and continue to advance yourself.

That being said, I admittedly do not know the specifics of the technical knowledge included in the CFA but as someone who currently leads underwriting at a REPE firm the financial modeling and concepts are quite basic (relative to M&A and corporate finance) so although it will help differentiate you I would not come out of this expecting even financially intensive roles to value the technical knowledge as much as you do.

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May 22, 2018

"Because it is the absolute highest tier of fast food."

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May 22, 2018

I swear, the CFA sauce is like crack

May 24, 2018

Respect for tackling L2, it's a beast so best of luck this June. I am sitting for L3 this summer and recently started at a top 50 PERE shop (came from sell-side ER where CFA was "highly encouraged"). At this point, I'd be dumb to not finish and get the fancy letters. I can tell you off the bat that CFA is pretty uncommon in CRE, but it certainly demands respect. In my interview, my now-boss told me "CFA huh? You'll be the smartest guy in the room for sure". The nitty gritty of CFA do not carry over to CRE much (ethics, fixed income valuation, derivatives...), but I do think the high-level concepts of portfolio management certainly apply to the real estate realm and will make you a more polished and intelligent investor. So stick with it. It's one of those things that can only help you as you navigate your career.

May 25, 2018

More investment knowledge is better than less investment knowledge. However, as @Count_Chocula, your 900+ hours would be better spent doing almost anything else if you want to succeed in real estate.

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May 30, 2018

CFA may give you an edge if you are going into portfolio management in real estate where you will be far removed from the asset but honestly real estate is it's own animal, you will be better off trying to understand the legal lingo and meaning behind PSA, loan docs, development FAR, affordability, partnership structures and LP/GP levels

ET

Feb 3, 2019