Why YOU Should Take the CFA® - What it Takes

There is a lot of discussion out there as to why you should take the CFA® , why it is shi.t, why it is a waste of time, why it is great, etc... Now I will try to explain why (IMO) you should take it:

Taking the CFA®  - What it Takes to Pass

  1. You need to have been relatively good at University, and you can sit your ass down and study for it.
  2. You need to have time; working in M&A and taking the CFA® is not advisable. But some people are "crazy, yo"; and can manage it. Brother of my old flatmate, Goldman FIG M&A group passed it in a year and a half. Another friend of mine same thing, took two weeks off, worked his ass off and passed all 3 on the first attempt. Some people are just better than the normal and manage it...
  3. If you are at University, start TAKING IT - you will thank yourself later for it.
  4. You will NEED the time, I have spent about 150+ hours I reckon to pass level II; I am not a genius like my friends, and consider myself pretty average when it comes to studying

Why People Tell You Not to Take the CFA® 

  1. An MBA is better - false, an MBA is DIFFERENT not better. The two are mutually exclusive and should not be compared. You use an MBA to network and get another job, I will go later into why you need the CFA® 
  2. People are too lazy to take it themselves so trash it - by far the most valid reason I have found. You will find that people are envious if you take it and will try to bring you down, this usually comes from people in their mid-thirties who are anxious about their own careers and don't like to see a young shark trying to get ahead
  3. It does not guarantee you a job or a career advancement ?? No sh.t! Just like an undergraduate degree from HBS does not guarantee you a job. What type of bull shit argument is that?
  4. It takes a lot of time, and does not add any real value to your future career prospects. Probably the only argument that is actually valid, but is highly debatable. I will try and explain in the next section how again IMO it adds value.
  5. If you are a 35 year old MD, you are probably heading toward the end of your career at this point, and you are so expensive no one will lateral you in any other job, so no point in doing the CFA®  as that won't help you...

Getting a CFA® : My Quest for Level II

  1. It took me a lot of time to decide to get cracking on it again. I took my level I in dec07 of my MSc, then started work and did not look at it again for a while. I had enough shit to sort out at work to avoid getting fired and getting paid.
  2. I decided to go and take it for jun11, I ended up getting poached at another company at the beginning of May, did not have enough time, and mainly ended up on a nice garden leave, and came back for the week end for the level II etc... Needless to say I FAILED it. Took it in jun12, and passed it. Now on to level III for jun13

Why I Took the CFA® Exam

  1. I work as a sales person, sales people do not need the CFA® to do their jobs. I have clients and they could not care less whether I have the CFA® or not. Will I be a sales person my whole life? Look outside for a moment, I started at a top BB 4 years ago, today 40% of the people I started with were mainly fired, or changed jobs; and that bank is going down faster than a hooker on a $100 bill. Instability, yea that's right... Surprise, banking is not a stable job...
  2. In the US - all equity fund managers are more or less required to have the CFA® , in
    London not all of them have it, so it puts you at a massive advantage. ER need the CFA® etc... There are a LOT of jobs that require or are well known to look very favourably on the CFA® in finance, so why not give yourself an edge.
  3. In 1 and 2 it points to the CFA® giving you an edge - how does it do it? Uni is great it means you've made it out of high school, you have been pre screened to go to a target, but it does not tell your employer how good you actually are at sitting your ass down and working. The CFA® proves that to the employer. If you are in the investment
    profession, all bankers will show experience on the prospectuses, who they are, where they come from. I can guarantee you that if they have their CFA® it will be on there. It adds a credential to the company that has hired you.
  4. The CFA® is impressive, people know how hard it is, and when you get that interview, if the guy gets along with you, it will help him know that not only you can be a fun guy to have a pint after work, but you can actually do that aforementioned work...
  5. It's the highest credential out there in the finance world, might as well get it...
  6. You do it for the knowledge. Ok, I don't believe a single person who says that, you might as well just pick up a book or the internet and google what interests you. It's true you will learn a lot, but never in enough depth to actually do any of the related jobs without learning something else.
  7. I want to further my career and it will help it. Plenty of things can help it, I network work hard at my job etc... But let's take for example my bosses... Some of them have the CFA® , how do you think it's going to look when I pass all III? I'll be member of the CFA® network, and it's growing.

Concluding Remarks

I have a good job, I am quite cosy were I am, things are going well (crossing fingers). Yet I am busting my ass after 4+ years in finance doing an accreditation that takes me plenty of hours and money. I could have given up when I failed but kept on going, if anything that should tell you to bust your ass and get cracking! (No matter which sector of finance you are in - be flexible and maleable, improve your employability!!!)

PS:

  1. Not everyone should take the CFA® , but no one should spit on it either. Most of my friends in Corporate banking don't have it, and they are doing just fine. However, you should seriously consider taking it. I am rambling a lot above.
  2. If you are an introvert back office clerk with no social skills etc... The CFA® sadly won't help you so much, there were a few of those guys at my old work, and usually they would actually just stop at level I; as one of my point above - the CFA® will NOT get you a job in and of itself!

On this note off to bed - wakinga up at before 6AM (4+ years and loving it!)

Read more about the CFA® on WSO

 

Good to see some love for the CFA. Passed Level 1 this June on the first try and was very happy with that. I see a lot of people criticize the CFA yet in person when I tell people that I passed Level 1 I only get impressed remarks (Except some ass hat interning at a family member's Wealth Management office who responded to my fact that I studied ~200 hours, "Oh, so it's not too bad"). Hoping that the CFA will show my passion and interest for investments to someday work for a HF or Good ER shop.

Blue horseshoe loves Anacott Steel
 

tl;dr

The CFA is worthless to career switchers without another, more compelling, complementary hook. Worthwhile for AM, PM, ER, folks.

Otherwise, shit waste of time, better to focus on other things.

/thread.

 
Best Response

Got a MBA and a CFA. I believe the MBA is really good for your network and connections. I believe the CFA is very good for your analytical skills and serves as a piece of evidence that you really understand finance. It is much tougher to obtain though because you need to study after work and if you don't pass an exam, you have to wait a full year, which really tests your patience and persistence. However, if you already know you want a carreer in Asset Management, hedge funds, equity analysis, portfolio management, the CFA is definitely very useful and opens doors. When it comes to investment banking/consultancy, an MBA degree more than suffices. What I have noticed in discussions with headhunters who approached me is that you are on the top of their list if you have both but if you already know that you want a life in IB/corporate finance, stick to the MBA.

 

Have to agree with YT81. Most people tend to assume that CFA is some sort of a magic wand that will open the doors to high-finance. Going for the CFA shows that you are focused on getting somewhere. You will sweat your ass off for that title and people know it. An MBA will just swing you upstairs after doing your time.

Death is certain; Life aint.
 

Soon in December I will graduate from a mechanical engineering program 3.6 GPA no experience. I dont like engineering and i want put me foot in an finance job. I will go to atlanta because my wife have an good offer. My plan is study for cfa level 1 and two actuary exam and practice my english in the semester that i will be free and next do a master in finance. Its a good plan, any suggestion

 

For getting a job networking beats everything, you should be the biggest a**kisser ever, yadda, yadda, and the CFA takes time away from that.

For keeping a job the CFA is awesome, because the content is really hardcore. You may kid yourself that you'll learn the same from reading books, but you won't. The time pressure and the need to understand every little detail cold makes you learn much more than whatever MBA you may think it's hard.

True, a lot of people just scrape by, and then you have all those people saying they study 150 to 300 hours for L2 or 3, which may be true. If you want to take the test comfortably, to be reasonably sure you've passed, you'll need many many very focused hours - this is real study, not watching classes or doing some paper with FB on the background.

If you do it right, you'll learn a lot in relatively little time. Networking is better to get jobs, working is better to learn whatever you need for your current specific job, but the CFA is pretty good. Most other credentials have the same effect to some extent, but the CFA gets some instant recognition while most people don't really know what FRM, PRM, CQF and others are about.

 

In the Equity Research department of Banco Portugues de Investimento in Portugal about the third part of the analysts and salesmen/women had the CFA. The firm paid for the books and fees to all those who wanted to have the CFA, but it didn't imply any edge in terms of bonus and promotion.

 

at the BB bank that I work for, the level of CFA you have attained is factored into your bonus... but it's not as important as other things (e.g. years with firm, amount of trading revenue the bank does with your coverage, etc.)

 

I would also suggest checking out the sites mentioned above - CFAs are almost never required or even asked about for the PE jobs . . . much more important is name of firm, group and undergrad grades and school . . .

 

At the analyst and associate levels, I'd rank the resume items in the following order of importance:

  1. GPA (very strong SATs a plus)
  2. Professional work experience (bulge bracket IBD, McKinsey/Bain most desired)
  3. School
  4. Major
  5. Any certifications like CFA

Of course, in parallel to all this, there is fit, eloquence/communication, demonstrated energy and dedication, etc.

The CFA does not make up for any deficiency in 1-4 but it does show a level of competence that is noteworthy at the more junior levels (analyst, associate).

At the mid-levels, i.e. VP position and sometimes principal (depending on the firm and how they title their roles), I'd say it goes something like this:

  1. Work experience - very strong track record trumps prestigious names but of course firm name matters too, quite a bit
  2. Business school (very strong GMAT helps)
  3. Undergrad (including GPA, etc.)
  4. Every other quantifiable resume item, which is where I'd put the CFA

The more senior the role, the more fit matters.

At the more senior levels, i.e junior partner/MD/partner, I'd say the CFA is irrelevant and it is almost all track record.

 

It will definitely help you, but the degree to which it helps depends on the schools you're considering. It will help alot with the course load first year as well.

 
Bucs47:
It will definitely help you, but the degree to which it helps depends on the schools you're considering. It will help alot with the course load first year as well.

Would you mind elaborating a bit on what you mean by 'depends on the school.' Are you saying that it depends particularly on a schools culture and views or the ranking of the school; as in it would help more or less for a #30 school vs. a #2 school.

Thanks.

P.S. Anyone here a CFA, or completed certain levels?

 

I doubt that 20% of matriculating b-schools are CFA holders. Don't do a CFA simply to strengthen your b-school app as it requires signifanct resources (time, money, and work experience). Only do a CFA if it benefits your current positon (assuming you do AM, S&T, etc.) For example if you are an i-banker a CFA is essentially worthless (the designation, not the obtained knowledge).

 
  • Equity Research (sell and buy-side)
  • portfolio management those are the businesses that value it, reward you for it, automatically pay you the fees implied, for which it is worth in the long term (and short/medium term as well). For other careers in finance i don't think it's worth the efforts you put in it, whether for corporate finance, structured finance, trading, etc. there are (imo) better ways to use your time.
 

I think blue_berry is wrong. The CFA not only represents a thorough understanding of everything finance, it represents a dedication to personal growth and a drive that is extremely hard to measure through reading a resume or conducting an interview. That is valuable no matter the area of finance. Add the depth of knowledge of financial statements and economics and I think the charter has universal applications and value in investment banking, private equity, corporate finance and hedge funds.

 

I am in the opposite position: about to start in finance and trying to figure out how to get military service in during my early life. Get into HBS and you will be fine. IB loves military men. Your service is great experience. Thanks for doing it.

 

PM me with your specific situation. I'll explain how to get the most bang (figuratively) for your buck. First and foremost, don't join the reserves/guard. I've never known someone to come out happy.

 

Sounds like you already have some good experience prior to joining the military... and with econ/VC experience, the Chinese angle and good military leadership I'm not sure how much a CFA would add. It definitely wouldn't hurt, but from a time/money perspective I'm not sure it's worth it. And with HBS on top of your already impressive background, I don't think you'd have much of a problem getting into BB IBD and PE later on.

 

I passed level 1 of the CFA examinations last December. I think it has helped some, another talking point in interviews. However, if you are trying to get a job, I would recommend taking that 100+ hours needed to pass Level 1 CFA and instead focus on networking and getting face time with people to land the job.

 

CFA helps big time in AM, PE I can't really comment on.

Most people on this website are a bit more banking/trading based where the designation doesn't have as much regard. I saw someone accurately compare having a CFA in IB to having a JD in IB -- it's nice to look at and no one will think it's weird you have it, but it doesn't help much.

I would check out http://www.analystforum.com where the real CFA geeks hang out and they can answer your questions.

 

It depends what you want to break into. I am sure there are several threads on this already so try the search function. If you are looking to do asset management or research, then yes CFA is helpful and usually required at some point in your career. Otherwise it is seen as irrelevant, however having studied for level 1 (I never took the exam) I will say I felt better having learned the material. Will it help you? Probably not unless looking at mentioned professions, but certainly won't hurt you.

 

Get in line, pal. It's a long fucking line too.

You don't sound convincing in your goal or your understanding of the industry.

Like whatwhatwhat said, search the site and know what you are getting into, before committing any serious time and resources towards the CFA.

Under my tutelage, you will grow from boys to men. From men into gladiators. And from gladiators into SWANSONS.
 

Haha, I expected you guys to be a**holes and you didn't let me down. I appreciate your directness and I definitely hear what your saying. I'm not one to shy away from the tough truth or a gruff delivery of said truths.

I have done some initial searching, I just wanted to get a couple of "educated" repsonses from those who might know the industry a bit more.

@Flake: You're right, my understanding of the industry is weak as far as knowing what it is I can actually accomplish or what potential positions will be like. Honestly, I don't have any points of references to whom I can ask questions. That's why I came and posted on WSO.

@spaceagecowboy: Wow, verrry constructive, prick. Or should I use a term you can understand, like "f*cktard"? Go off yourself, you waste.

@ everyone else: Thanks, guys. I will continue to dig deeper.

 

Level 1 isn't going to open a ton of doors for you from what I can tell. It sounds like you already have a job so the resume boost doesn't seem like it would be a huge factor in deciding to pursue the designation (for some people from non finance backgrounds, L1 can show a strong commitment to finance). CFA is really geared towards equity research/asset management professionals, although you do see it occasionally in trading and banking.

I do not think it will be much of a benefit for getting into a good MBA program, but am not an expert here.

L1 alone is going to be of very little benefit to you, especially as you get further down your career path. Either pursue the designation or don't- stop now if your mindset is that passing L1 is going to open a bunch of doors for you.

I'm a L3 candidate. Let me know if you have any more questions. Might help to know exactly what you are looking to do.

Also, analystforum is a better resource than WSO for CFA related questions.

"For I am a sinner in the hands of an angry God. Bloody Mary full of vodka, blessed are you among cocktails. Pray for me now and at the hour of my death, which I hope is soon. Amen."
 

Something I have seen is that if you have to go through or talk to HR, for an IBD position, and that same firm makes their PWM do the CFA it carries more weight.

mikebrady - good point.

"After you work on Wall Street it’s a choice, would you rather work at McDonalds or on the sell-side? I would choose McDonalds over the sell-side.” - David Tepper
 

ER and AM, it is looked upon favorably.

IBD and S&T, not so much.

Useful more for moving up in a current role than breaking in. If you search you can find a ton of threads about the CFA.

"For I am a sinner in the hands of an angry God. Bloody Mary full of vodka, blessed are you among cocktails. Pray for me now and at the hour of my death, which I hope is soon. Amen."
 

It won't help you much for breaking into anything. That said, once you get into ER or AM it's absolutely necessary to get. Hedge funds its useful but its more important to some than others. Completely useless in IBD. Could be useful in S&T if you're a sales guy and you want your clients to trust you more.

 
GPMagnus:
Reading 3,000+ pages will take you a while and it is not the best use of your time. Learn to build and maintain models. The good Fin Reporting stuff comes at CFA L2 anyways ...

Got it. How about just reading the Financial Reporting and Analysis books for Level 1 and Level 2? It'll only be a total of 500 pages total which wouldn't be too bad. Or is that just a complete waste of time?

 

I just did CFA Level 1 - your time would be much better spent doing more modeling and learning how to build 3 statement models real quick (try WSP's LBO model - it's a really good template with all the bells and whistles). Learning how to do a 3 statement model really well and fast will also help with HF/PE recruiting down the road (you should be able to make a basic 3 statement model with projections in 2 hours).

Reading Level 1 FR&A might be helpful but don't get too bogged down in it. Maybe skim it and then print out a 10-k and read it cover to cover, and then go back on anything you didn't understand.

Good luck!

if you like it then you shoulda put a banana on it
 

My opinion: Take the CFA, but don't put “CFA Level 1 candidate” on your resume. Anyone can be a candidate for Level 1. Wait until you’ve passed to put it on your resume. I get that it speaks to your interest in finance, but you can still mention the test in an interview.

"There's nothing you can do if you're too scared to try." - Nickel Creek
 
N0DuckingWay:

My opinion: Take the CFA, but don't put "CFA Level 1 candidate" on your resume. Anyone can be a *candidate* for Level 1. Wait until you've passed to put it on your resume. I get that it speaks to your interest in finance, but you can still mention the test in an interview.

Comments like these are the reason why I come to this place. Thank you!

Want to Lose the body fat, keep the muscles, I can help.
 

A good foundation in finance and showing desire and drive. But what it cannot teach you is initiative, common sense and a work ethic which does not require you to be spoon fed everything; these are qualities I fear you lack.

"After you work on Wall Street it’s a choice, would you rather work at McDonalds or on the sell-side? I would choose McDonalds over the sell-side.” - David Tepper
 
Oreos:

A good foundation in finance and showing desire and drive. But what it cannot teach you is initiative, common sense and a work ethic which does not require you to be spoon fed everything; these are qualities I fear you lack.

How did you develop such eloquence in communicating? I'm jealous of the zing-factor here lol.

in it 2 win it
 

Thanks for this insight, after I finished my MBA, I was contemplating either a Ph.D or CFA, as I did more research I noticed that in the USA at least it was one of those things to have because the pass rate and the people who have one, seem to help in their careers and I was dead set on going for one, until I decided to actually first work in the financial industry and see if it is the right step to take, as I went for interviews in the industry (departure from the Pharma industry where I am from), I noticed that what I wanted to do I have to go for the series 6, 7, 66. I am still new to the financial industry so I will wait abit and see what the career avenues open for me and if I have to eventually take the CFA exams then so be it but thanks for your comments they are certainly helpful and shape the way I view tis subject.

Want to Lose the body fat, keep the muscles, I can help.
 

Coming from someone in ER currently and waiting to hear results of L2, the CFA isn't a must and, as others have expressed in different posts over time, isn't a guarantee.

Best bet is to focus on your degree program. You don't want to give each program less than what it deserves and wind up with subpar grades AND failing L1. Once you've settled in it might make sense to pursue the CFA next June. You also might find there's no need whatsoever for you to take it.

Best of luck.

 

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"There's nothing you can do if you're too scared to try." - Nickel Creek
 

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