What's with the CFA being overrated?

These posts used to be pretty encouraging, but now there seems to be a cynical crowd growing. A lot a people say the CFA is overrated, won't help to get a job, is a waste of time and money, go get an MBA, etc.

I guessing these are mostly those who took the exams and can't find a better job.

I love learning about the material, regardless if it gets me a better a job. Plus the return is pretty good CFA:$3,000 vs. MBA:$30,000

If you think this stuff is overratted, why? Weren't you interested in the material before you started this route?

Comments (29)

Mar 11, 2010

I think all the CFA hating is a response to all the kids asking for the ump-teenth time "Will doing L1 boost my chances of getting into GS from a non-target with zero networking?". You can say "no" only so many times and not get annoyed. But you're right - the material is very interesting, getting the certificate shows you're into it and that you know it by heart. It really can't hurt you. But don't expect to substitute MBA with it...

Mar 11, 2010
tandaradei:

I think all the CFA hating is a response to all the kids asking for the ump-teenth time "Will doing L1 boost my chances of getting into GS from a non-target with zero networking?". You can say "no" only so many times and not get annoyed. But you're right - the material is very interesting, getting the certificate shows you're into it and that you know it by heart. It really can't hurt you. But don't expect to substitute MBA with it...

You're exactly right.

Tandaradei, I think its important to remember that the CFA is a tool mainly for Portfolio Management jobs, no? I'm sure it would be a nice additive for a prospective banker, but isn't the MBA more important for IB?

Also, I would be scared to hire anyone who can't network worth a shit. I mean, if you want to do back-office, trading, analysis, or you want NO client interaction, then that's another story. But what front-office department is going to want someone who doesn't have the balls to reach out?

Mar 11, 2010

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Mar 11, 2010

Considering that the site is mostly dedicated to IB has a large part to do with it as well. The CFA is an excellent designation to earn if you work in AM and some of the best firms require it before you can move up to a certain position

Mar 11, 2010

As said above, you must keep in mind this forum is dedicated mainly to IB. For careers in AM, it is highly respected. The CFA isn't going to help a banker out, therefore they may not find value.

However, anyone who has acquired the designation will tell you how much value it has added to their career.

Talk to a CFA and ask them if they'd do it again, there regrets, advice etc.

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Mar 11, 2010

Thanks everyone. I have the same post on AnalystForum.com and wanted to see the different reactions. It's amazing in the differences between the two.

Mar 11, 2010

Wow I just read the comments at AF and they are very different. Although surprisingly, they aren't all pro-CFA if you will. The biggest takeaway is that it's a tool to market yourself and network, it is not the end all be all of finance. By itself, it will get you nothing. It may get an interview for you, but you still have to show up, breath and answer questions.

Mar 11, 2010

I'm a level 3 candidate and I do believe it has helped me in my job search. Recruiters definitely like seeing it.

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Apr 12, 2010

I agree. CFA is very important when you want to end up as a portfolio manager. I'll quote a PM from Lazard AM who manages about a billion dollars or so, who I was lucky enough to hear speak about 3 months ago.

He said, "The CFA is one of most important things I look at when bringing on new people. It not only tells me that you know your stuff, but it also tells me that your interested enough to sacrifice your evenings and weekends for several months to learn it. To be honest, even if I just see on your resume that you'll be sitting in on the CFA tells me at least something about your dedication to this industry."

I listened to 9 people speak from that company, everyone from senior vps of equity research to PMs. Nearly all of them were CFA and all vigorously supported taking the exams if AM is in your future.

Apr 12, 2010

Well i work at a boutique PE fund and most of the partners have a CFA. This could very well be an aberration but they value the CFA and have a lot of respect for people who go through it. I am currently on Level 2 and its difficult.

Apr 12, 2010

Although there is a monetary cost difference between CFA and MBA, you have to factor in the time that is involved as well.

A CFA requires a minimum of 3 years to pass (assuming you pass each level in succession) and a good number of hours to prep for. The burden of not passing after a few months of preparation could be pretty devastating. You have to really want it and put in the necessary hours. There's no sense in devoting that kind of serious time unless you're pretty certain you would use it in an asset management related career path.

Apr 18, 2010

CFA did not help me at all in my job search. otoh I started taking classes at a top 10 grad school and instantly had dozens of interviews pouring in. for the small time/money I would do it again but anyone who takes it should lower their expectations

Apr 18, 2010

Another way to look at the CFA is not something that will get you a job, but something that is a prerequisite to getting a job. Today, it's almost required if you want to move into any type of investment position on the buy side. If you look at the bios for PMs and analysts at mutual funds and asset managers, almost all of them are CFAs. You'll see a few that aren't, and usually those are people who are older and proved themselves long ago, before the CFA become such a necessity. If you're young, the chances of moving into senior investment roles is almost nil without a CFA. Sure, getting a CFA won't get you a job alone, but if you don't get the CFA, you can count on your chances being much worse.

Jul 1, 2010

Finance is typically filled with buy side and sell side. The CFA covers anything and everything related to the buy side, period. Whether you work in AM/IM/HF or PE, it is the one thing which truly shows your dedication to the field and work. The world is changing everyday, and employers are putting a lot more emphasis on knowledge, whether it be technical or fundamental, sometimes both. 5 years ago I would've never thought programmers, mathematicians and statisticians would get paid as much as they do in Finance currently. And these folks put heavy emphasis on the CFA because they want to combine their technical skills with fundamental knowledge. Buy side firms are starting to put heavy emphasis on the fundamental knowledge from the CFA, and the CFA's are putting a lot of emphasis on programming and statistics, to gain technical skills. I believe to survive now a days you need to be competitive as many ways as possible, especially if you want to land that $300k or 500K job Make yourself unique and marketable with both technical and fundamental skills. Anyone who tells you not to waste your time obviously don't know what they are talking about and there is a high probability they will be living on the streets 5 or 10 years down the line.

I really think after the financial crisis, people realized how much they didn't know about the industry, which they worked in and are looking for candidates with the knowledge and the right experience. But thats just a conclusion from the observations I made.

Apr 19, 2011

Sorry for bumping an old thread, but I just came across it.

From talking to a bunch of people about this, the conclusion I arrived at was that if you're NOT currently in equity research/investment management, passing the CFA alone will not allow you to make the transition (or it is REALLY tough unless you get lucky with the right connections, etc.). In order to make that switch, an MBA from a top program is necessary in many cases. Now, a decent number of people at these schools who want to go into the buyside will have passed at least level I of the CFA, but that is to be expected.

In terms of pure knowledge, a CFA is very useful and can only help you. I just think that people should have realistic expectations of what it can do for you in terms of your career. Don't expect the CFA to land you interviews at PIMCO or Wellington if you're not in a relevant field nor at a top business school.

Apr 19, 2011

It's pretty much implied that I must get a CFA at my firm if I want to advance.

Apr 19, 2011

In most of the top Asset Management firms, if you want to be successful then I highly recommend getting the CFA. It's not really for the material you learn, but also to see if you are dedicated to industry and good for show as it's still one of the toughest certifications out there.

Apr 19, 2011

you cant advance without a CFA at my firm

Apr 19, 2011

It is stupid to think it will simply get you a job, don't pursue it for that reason.

Apr 19, 2011

^ ^ ^ ^

But sadly some people are. I told a kid who was from Michigan Tech and was studying for L2 to put that book down and study for the GMAT. Then go back to L2.

"Cut the burger into thirds, place it on the fries, roll one up homey..." - Epic Meal Time

Apr 19, 2011

I spoke recently with an MD at CIBC World Markets in IBD, he said that while it isn't as relevent to ibanking, the fact that so many people on Bay Street have the CFA almost makes it like a pre-requisite. I think in Canada, the CFA can help you with IBD roles more than in the US. The CFA job postings for local societies usually have a few postings for IBD roles at boutiques or even sometimes the Big 5 in IBD.

But ya as a CFA charteholder it wont necessarily help you get a job like an MBA, there is no recruitment, its more of a career accelerator, so if you are in an existing firm you can move up. Also if you are looking for junior roles it can help you land interviews to have Level 1 complete.

Apr 19, 2011

Agreed with d-j-j for the most part. The curriculum for CFA is slowly evolving and I don't think we're going to see it only for Asset/Portfolio management type jobs in the future. For example, this years Level 2 exam gives more weight to areas such as Corporate Finace than years before.

I've posted this on another thread before but here it is again. These are the professions CFAs are currently in.
http://www.newcfa.org/?intCamp=homepage_banner_cha...
As it stands currently in the U.S., 23% of CFAs are in portfolio management. I don't think the thinking is much different in Canada as 21% are in PM there, and 4% of CFAs are in IBD compared with the 2% of CFAs in the U.S.

With that said, passing the 1 and 2 exams can certainly add value to your resume for most financial fields but it wont necessarily get your more interviews.

Apr 19, 2011
djr:

Agreed with d-j-j for the most part. The curriculum for CFA is slowly evolving and I don't think we're going to see it only for Asset/Portfolio management type jobs in the future. For example, this years Level 2 exam gives more weight to areas such as Corporate Finace than years before.

I've posted this on another thread before but here it is again. These are the professions CFAs are currently in.
http://www.newcfa.org/?intCamp=homepage_banner_cha...
As it stands currently in the U.S., 23% of CFAs are in portfolio management. I don't think the thinking is much different in Canada as 21% are in PM there, and 4% of CFAs are in IBD compared with the 2% of CFAs in the U.S.

With that said, passing the 1 and 2 exams can certainly add value to your resume for most financial fields but it wont necessarily get your more interviews.

Whoever threw the MS, be a real man/woman and show yourself and tell me what's wrong with this post.

Apr 19, 2011

^ ^ ^ I hate the trolls that do that., Good post I dont even know how to give out silver bananas, or I would give you one.

Apr 19, 2011

I didn't throw the shit, but I will point out that it's 23% portfolio MANAGERS, not 23% in portfolio MANAGEMENT. For example, titles such as research analyst, strategist, and trader may all represent people working underneath portfolio managers/on a PM track, not to mention roles like private banker, financial advisor, etc where you direct client assets.

I do think that the test has basically become commoditized-it's not something you do to make yourself stand out, it's something you HAVE to do to not fall behind. A lot of people don't get this-if you go to the CFA groups on LinkedIn for example you have a million people in unrelated fields asking when they get their equity research job now that they've passed level 1 which is patently dumb.

Apr 19, 2011
Kenny_Powers_CFA:

I didn't throw the shit, but I will point out that it's 23% portfolio MANAGERS, not 23% in portfolio MANAGEMENT. For example, titles such as research analyst, strategist, and trader may all represent people working underneath portfolio managers/on a PM track, not to mention roles like private banker, financial advisor, etc where you direct client assets.

I do think that the test has basically become commoditized-it's not something you do to make yourself stand out, it's something you HAVE to do to not fall behind. A lot of people don't get this-if you go to the CFA groups on LinkedIn for example you have a million people in unrelated fields asking when they get their equity research job now that they've passed level 1 which is patently dumb.

Exactly. People really need realistic expectations. If you want to land a bunch of interviews at top ER or IM firms, try to get into a top b-school like hbs/wharton/booth/columbia, and then join the school's investment management club and bust your butt off to learn the material. At that point, you will land interviews from top firms pretty easily, and it is by far the best way to break into the field.

Apr 20, 2011

You're right. Portfolio manager is not the only job in PM.

Could you also argue that titles such a Research Analyst, Trader, Risk Manager etc. could be positions on the sell-side as well? When I think of Portfolio or Asset management, I think of mutual funds, PWM firms, family offices etc., and not something like a Hedge fund. If this is wrong, let me know.

It would be interesting to know how much concentration there is in sell-side vs. buy-side for CFAs.

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Apr 20, 2011
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Apr 20, 2011