Top 10 Rankings: Useful Designations
Like many of you on WSO, I'm studying for yet another CFA exam (level 2, yay?) and as I'm shaking off the cobwebs in my brain I find myself wondering: is this the best designation? The answer is simple: no. But that's simply because there is no "best" designation, but there are "useful" designations which is what this list will hope to capture. That being said, is the CFA charter a particularly useful designation? Yes and no. It's well regarded in many areas of finance and business, but that's about it. There are many aspects of a designation that need to be considered when determining how useful it is, for example: Can it get me a job? Can it get me promoted? Can official documents be signed by someone without said designation? Getting your CFA charter will probably help with the first, almost certainly with the second, but not with the third. These are always things to consider when pursuing a designation.
Best Financial Distinctions List
Now, some ground rules, we'll limit ourselves to the job functions on WSO. Sorry JD & MD, you won't be considered. However, graduate level degree programs will, but only in the broadest sense (i.e. only "MBA" will be considered, which means both "University of Phoenix MBA" and "Wharton MBA" are in that category). Naturally, everyone's rankings will vary depending on their background and career preferences, so feel free to list your own!
On to the ranking!
Doctorate in Finance Field
10) Ph.D. - Sorry doctorate, but since my own set of rules require ambiguity within a degree program, the rather useful mathematics sub disciplines are getting lopped in with the psychologists. That being said, if you're getting a Ph.D. in economics, finance, applied mathematics, pure mathematics, physics, statistics, or really anything technical, you can probably lever that into a good job. If you're really set on that Ph.D. in medieval literature, apply for SNAP now.
Certified Financial Planner
9) CFP - Some may balk at the inclusion of the Certified Financial Planner designation in this list, but it's use shouldn't be discounted too quickly. Will it get you that coveted FO IBD role you've always dreamed about? Probably not, but someone has to sell financial products on the retail side, and those people oftentimes have CFP designations, making it not entirely useless for getting into finance.
Certified International Investment Analyst
8) CIIA - The Certified International Investment Analyst may be less known to many on WSO, but it is sometimes described as the European version of the CFA charter. To many of you, this may seem ridiculous since the CFA charter is a global designation, and you'd be right. The CIIA will always be in the CFA charter's shadow, which is what holds it back in the rear of the top 10.
Chartered Alternative Investments Analyst Usefulness
7) CAIA - The Chartered Alternative Investments Analyst should probably be higher, but due to it's fairly limited scope, it's usefulness is not terribly high. Over time, especially with some of the effects of Dodd-Frank pushing insurers and banks into alternative assets in search of yield, it's poised to become more useful in the future.
Financial Risk Manager Designation
6) FRM - In my opinion, the Financial Risk Manager is a real up and coming designation. I'm beginning to see this more and more on job postings alongside the MBA and the CFA charter. Good company to hold for any designation. The FRM still has to go through some growing pains, as it's only been around since 1997, but it's looking to be a promising designation going forward.
Masters in Finance Degree
5) MFin - The MFin is a regular favorite among many here on WSO, but the reason it's not ranked higher is due to its limited value on the job market. Its usefulness appears to be limited to correcting a bad undergrad GPA, in order to enter into more competitive programs, namely target MBAs. Beyond that, it's utility seems limited, which is why it's ranked #5 as opposed to #4 or #3. Many will disagree with me here.
4) ASA/FSA - Some will question this ranking, but I've included the two actuarial designations that qualify for membership in the academy for one particular reason: legal protection. The only people who can sign actuarial memoranda, among other official documents in the insurance industry must be members of the American Academy of Actuaries. Having legal protection for your designation is incredibly useful for job security, as well as for getting a job. While the actuarial world is moderately shrinking, particularly within life and pensions, health is on the increase, and the SOA has recently expanded their program to include quantitative finance and enterprise risk management. Both very useful to the world of finance.
Masters in Business Administration (MBA)
3) MBA - The MBA is the single most useful degree for finance. If we limited this to "Target MBAs" it would be ranked higher, possibly #1. But, since we're attempting to be as general as possible, the MBA suffers because of its commoditization over the past few decades. The real value with an MBA comes from the vast networking opportunity the degree program offers, which suggests that online MBAs and University of Phoenix MBAs are completely useless, as you can't benefit from this inherent value. This is the only reason that the MBA is ranked where it is and not higher.
CFA for Finance Work
2) CFA - I'm probably being something of a homer here, as the reality is that a target MBA will get you into a Wall St. firm much faster than the CFA charter will. However, the CFA charter is highly regarded and while it may not get you into the Wall St. firm of your choice, it'll set your resume apart from your competition. But, it's not a golden ticket by any stretch of the imagination. From what I understand, the CFA charter's usefulness is found with those who are already on Wall St. It's value is well understood and will probably help you get promoted depending on your job function. Additionally, for those trying to transition into finance, it's rigorous program will give you the academic background that is absolutely required for many positions.
Certified Public Accountant
1) CPA - Okay, don't laugh, but the CPA absolutely deserves to be in the #1 slot. Sure, accounting is boring, and yeah, some CPAs are a little weird, but there's tremendous value with this designation. The CPA is legally protected up the wazoo, the number of documents that have to be signed by a CPA are legion. Additionally, the number of financial firms that employ or contract a CPA is pretty damn close to 100%. Getting it isn't easy either, you need 150 hours of study or a master's degree (unless you're in California who has a different rule) and then there's a bunch of tests that must be completed in a set time frame. Will you enjoy the work as a CPA? Maybe not, but that doesn't take away from it's usefulness. The world will always require CPAs and having the designation will provide both job security and a leg up on the competition.
What do you monkey's think? What are your top 10?
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