« Will the JOBS Act Create Any Jobs in the Hedge Fund Industry? | Main | They Call It Innovation »

06/18/2012

Is the CFA Charter Really Useful in Getting an Investment Banking Job?


Click to Print This Page

EfinancialCareers

In September 2006, when I was a second-year Goldman analyst, one of my associates texted me to “show off” that he had just passed Level III of the Chartered Financial Analyst® program. I have to admit that I was jealous! I knew it was a definite plus on his resume because I’d heard that it was extremely challenging.

I thought, “If he has the time to study for the CFA [exam], I can make time too!” It was September already but I still applied for the December 2006 Level I exam. I passed. I passed the next two levels in June 2007 and June 2008, respectively.

When I talk about the CFA [exam], I am therefore talking from a position of experience.

WHAT’S ON THE CFA CURRICULUM?

There is a little bit of everything finance-related.

The beauty of Level I is that it is very broad, immensely interesting, and really not that difficult. It was through Level I that I developed an interest in derivatives. I started trying to move from IBD to the capital markets a few months after I completed the exam—the better working hours were also a huge lure for me.

Level II is generally accepted to be the hardest level. It was, for me, also the most boring. There is so much nitty gritty detail on accounting—not my favorite topic.

Level III is very focused toward asset/portfolio management. There is a lot of in-depth information about how to look at asset portfolios, how to choose between different asset classes and how to manage other people’s money.

HOW COULD THE CFA HELP YOU?

  1. It will stand out on your resume.
  2. The CFA qualification is well regarded because its modules are highly relevant to different areas of banking and because CFA Institute only allows the best 35 percent to 45 percent to pass any sitting. [Ed. Note: While typically 35–45 percent of candidates pass the exam, there is no indication that CFA Institute does not allow more than that amount of candidates to pass at a time.]

  3. Your chances of getting invited to interviews may rise.
  4. Case in point: one of my colleagues did his first degree in Lebanon followed by a master’s degree at a good UK university. When it came to looking for a job, he says he didn’t get a single response after sending out his resume so he decided to sign up for CFA Level I. When he sent his resume out again, he started getting interview invitations. He’s one of the best derivative salespeople I know, so it just goes to show that banks can have trouble sifting through the many applications.

  5. It may help you decide where in an investment bank you would best fit.
  6. Some bankers think the CFA qualification looks a lot better if you did it while you were working rather than when you were in college or looking for a job. However, I would argue that it adds a lot of value to your resume no matter when you do it. It’s not easy.

  7. Your chances of ever becoming unemployed (apparently) fall.
  8. Of the 100,000 current full CFA charterholders globally (i.e., people who completed and passed all three levels of the CFA exams), according to CFA Institute’s own figures, only 4 percent of them are unemployed at any time.


NYSSA CFA Sample


DO YOU HAVE TO TAKE A TAUGHT COURSE IN ORDER TO PASS THE CFA [EXAM]?

No. I didn’t and I still passed all three levels the first time. For me, paying someone to teach me would have been a big waste of cash. When I am around other people, I usually want to chat. For the same reason, I also didn’t join any study groups.

WHAT WAS MY STRATEGY?

Time was limited. I didn’t read CFA’s own materials—they’re too thick. I ordered self-study materials (five books, audio CDs, QuickSheets, and practice exams) from Schweser. I studied properly on weekends (both days); during the week, I listened to the audio CDs on my way to work. I was always too tired to do any revision after work.

I took exactly one week off prior to each exam. By this time, I had been through all the study material once. Each time, I created a schedule to ensure this was the case. So what did I do in this one week? Exam practice! One exam per day. As I went through the practice exams, the areas I needed to work on jumped out at me, so I re-read just these modules.

What about my social life?

What social life? I killed it. I went out to dinner a couple of times per month. However, when the CFA [exam] was over, “freedom” felt so much sweeter. I took the last exam in June 2008, but even today, four years later, the idea of combining a full-time job with the CFA still gives me the heeby-jeebies.

–"Girl Banker"
This article first appeared on Girl Banker’s blog, here.

[eFinancial] Editor’s final note: We would add that anyone going into wealth management or private banking would also benefit from a CFA since so many wealth managers are now becoming portfolio managers as well.

As an impartial, nonprofit forum for the finance and banking industries NYSSA encourages discussion and debate among its members and other professionals. Commentaries, however, should be taken as the sole opinion of the author(s) and not of NYSSA. If you would like to submit a commentary to the Finance Professionals' Post>, send your article to the editor

Related Posts Plugin for WordPress, Blogger...

Comments

Hi
I have just attempted CFA level 3, and have been unable to find any suitable job. though i have working experience of more than 5 years including 4 yrs in Big4

Just remember that this is not a real license (medical boards, CPA, etc.) and as such, is not subject to the same scrutiny, consistency and accuracy as one might expect. I also believe there are opportunties for bias as the CFA is a lobbying organization. That being noted, you will learn a lot (and a lot of garbage as well). Consider an MBA before undertaking this program. More bang for the buck all the way around in the long run.

Hmm Daphne, and how is the MBA not a "club" ? You get more bang for the bucks if you have the 300K in lost opportunity cost + upfront 150K to go to the only schools that have the "connections" that might open the doors somewhere for you, and that is still a big if now a days. What you believe doesn't really matter if there are no facts to substantiate your claims(lobbying organization ? Really ? Where did that come from). Totally unwarranted and uncalled for, and offensive to those who have gone through the multiple hours and hard work to pass this exam. Since the times of Graham this is the only designation that advocated for sound value investing principles. The garbage in garbage out is done elsewhere thank you very much.

The unemployment rate in CFA is 4%, and the author feels proud of this! What a big JOKE! It gives me nightmares. Well I am in Singapore where unemployment rate is just 2.1% (http://www.singstat.gov.sg/). I am like Umair who tool CFA Level III exam in June. I have been unemployed for the last 16 months, got 12 interviews, but all the interviewer were non-CFAs, either MBAs or CPAs or IT people, interviewed me for an hour, asked a lot of risk management, derivatives, performance measurement & attribution questions (GIPS), appreciated my knowledge and in the they felt pride in REJECTING me because I am a potential CFA. So CFA is a DOUBLE EDGED SWORD. No other CFA has helped me get a job, so even getting connected to other CFAs looks useless. To sum up, it is HARD TO SAY that CFA is worth its price and effort and also it is DEFINITELY NOT A GUARANTEE against remaining UNEMPLOYED. 4% unemployment rate is TOO HIGH FOR CFA. MIT MBA Unemployment rate is zero. I had got more jobs after my MBA than what I am getting now.

I absolutely agree! If you are 25-yr old GS alumnus/-ae, graduated from a fancy school, then CFA may give you some added value.

Unfortunately, for us in the mid-30's, even with lots of relevant experience, several Master degrees with excellent grades and high IQ, CFA does NOT give a job.

The deal is, hiring managers do not need to hire dedicated and clever people. They hire "promising" people with a fancy pedigree, so when something goes wrong they can say, "but she is a GS alumnae graduated from college X!".

J.S.
MS,MA,MM

I don't agree that a CFA on the resume increases chances of an interview or a job for that matter. I have an MBA, CPA and I am a level 2 CFA candidate ( just took the exam ) in addition to 5-7 years work experience I have been looking for a job for the last 9 months with no luck. I think the CFA intimidates a lot of people who dont't have it.

Thanks J.S., & Puja. I feel great that I am not alone in the boat of CFAs or potential CFAs facing unemployment. There is no doubt that those who pass CFA finally definitely have high IQs because I have seen Wharton or Harvard MBAs failing. I am also a very active member of CFA Society Singapore, meet at least once a month to Hedge Fund Managers or other CFAs who are Sr. Directors in big companies, wrote to them for a job, but none of them responded. MBA alumnus are better in that respect. I also had helped my junior MBA colleagues when they had graduated. CFA Institute should encourage networking in job help, but it has neglected this aspect so far.

Umair, Alakh and Puja, if you don't find a job it is not due to the CFA. CFA can only help. By your names I guess you are Indian. Maybe you are being discriminated against. Have you thought writing to the U.N. regarding breaches human rights to find a job ?

@Steve, I tell you my personal experience that none of the interviewers in Singapore were CFAs and they took the CFA qualification as something that would steal their jobs or at least for future promotion a CFA Charter holder or CFA candidate who has passed at least level-I will be the preferred one to them. So in order to eliminate this competition, they just don't let a CFA or CFA Level-I pass enter into their team/organization. Regarding another CFA helping to get a job like an MBA alumna helps to a pass out, I have disappointing experience with local Singapore CFA Society President Daniel Schaefer, who is Global Business Director at ThomsonReuters. There are a lot of vacancies in ThomsonReuters Singapore, I apply there, and don't get calls. I asked Daniel if he could find out or help me and he refused to help me, though he knows me well enough as I had talked to him at CFA meetings for 3 times or ask a lot of questions in CFA Society presentations. So CFA does not always help, it sometimes hinders one to get a job because non-CFA interviewers see a CFA or CFA Candidate a threat to their job security. You are right that I am an Indian and you are also right that I am being discriminated along with other Indians like Puja. However I would like to add that Indians outside India discriminate me the most, then to some extent Philippians, but US Whites never discriminated against me as I got jobs very easily in USA whenever the team consisting exclusively of white Americans interviewed me.

Dear Alakh,

I am very much in a similar predicament and i have cleared CFA level 2 and based at Singapore.Looking forward to hook up with you to explore avenues of breaking into Investment banking arena.

nags

CFA helps, at least the recruiter can assume that you master the basics of investment industry.

The comments to this entry are closed.


Find NYSSA on Facebook

Follow NYSSAorg on Twitter

Join NYSSA Group

Visit NYSSA on Google Plus



conference rentals


UConn-ad

NYSSA Job Center Search Results

To sign up for the jobs feed, click here.


UPCOMING EVENT
MF16

NYSSA Market Forecast™: Investing In Turbulent Times
January 7, 2016

Join NYSSA to enjoy free member events and other benefits. You don't need to be a CFA charterholder to join!


CFA® EXAM PREP

CFA® Level I 4-Day Boot Camp
Midtown

Thursday November 12, 2015
Instructor: O. Nathan Ronen, CFA

CFA® Level II Weekly Review - Session A Monday
Midtown

Monday January 11, 2016
Instructor: O. Nathan Ronen, CFA

CFA® Level III Weekly Review - Session A Wednesday
Midtown

Wednesday January 13, 2016
Instructor: O. Nathan Ronen, CFA

CFA® Level III Weekly Review - Session B Thursday
Thursday January 21, 2016
Instructor: O. Nathan Ronen, CFA

CFA® Level II Weekly Review - Session B Tuesday
Thursday January 26, 2016
Instructor: O. Nathan Ronen, CFA