UK
On the face of it, the CFA is a pretty worthless qualification. And it is becoming more so every day.
Like most members-only clubs, it thrives on exclusivity. You’re part of an elite group who’ve worked hard, passed all three parts of the exam and done all the other requisite box-ticking. And with strong demand still for City jobs despite the credit crunch, it’s becoming harder to differentiate between job applicants – even after eliminating chronic halitosis sufferers, people with 2.2′s and the ones that don’t look good in a suit.
But the CFA Institute faces an existentialist problem. It is a profit-making organisation (and it would be very ironic if it wasn’t, given that its charter holders are supposed to be some of the richest people in the world, paragons of modern capitalism and efficient markets). And yet the more candidates it accepts (and the more it grows its bottom line), the less exclusive it becomes.
With high unemployment in the financial sector many people are signing up. A CFA is a cheaper qualification than an MBA, although it takes just as long to complete (if you pass everything the first time).
However, the CFA cannot afford to pass too many plebeians into its cosy members-only club. So what does it do? Logically, it marks each exam on a forced bell-curve so that only a minority pass each exam sitting. The rest will have to wait, pay another set of fees and do their retakes months later.
Yet, if they think the CFA will contribute to their job prospects, they are deluding themselves. Yes, a CFA will help if you want to work in asset management, equity research, or hedge funds. Anywhere else, it is mostly superfluous.
The only way to get a really sound footing in financial services is to do the three year analyst programme in an M&A team at a top bank. I hate to burst your bubble, but alongside this the CFA looks like a BTEC Diploma compared to an economics degree from Cambridge.
The author is an anonymous ex-corporate financier who now works in private equity.
You talk as if M&A bankers know anything anyway?
You choose M&A if you have a lack of brains but want to get fairly rich, and markets if you have a lot of brains and want to get really rich.
The intelligence of M&A bankers is slightly at odds with their track record of destroying shareholder value.
excellent and timely advice for those not yet enlisted in the programme.
This is perhaps the stupidest thing I have read all year. The CFA is principally useful for Hedge Funds, asset management and any high yield bond or equity research. It is a rigorous degree and instantly respected – it is not necessary in M&A because you need to be a monkey, but if you move to the buyside from M&A, you will be expected to take up some work with the CFA.
The Cambridge 2.1 degree matters for about 4 seconds after you’ve been hired in your first job – then it’s about whether you can step up to the plate and hit home runs.
Seriously – people like this should not post here.
.and yet there is a growing number of postgrad degrees that want to incorporate as much CFA curriculum as possible. CFA worthless? says someone that did no studying beyond a ba
The author is an anonymous ex corporate-financier who now works in pivate equity – aka – the author is a moron who has sytematically made the wrong career choices throughout his short career – as for the anonymous bit – doesn’t surprise me in the least!
I’d rather be a male stripper than an M & A banker – Better than being the bitch of a director who’s taking out the complexes of his wretched childhood on me.
The writer of the article is trying to re-assure himself that he’s chocolate despite the dog’s life he’s leading (it must hurt when well off bankers are having drinks on Friday at 5 PM, while he is up all night trying to create good-for-nothing Powerpoint slides).
Real bankers don’t do M&A
They trade … for their own hedge fund
By the way, it’s incorrect to say that you don’t “have a CFA”, you become a CFA Charterholder. You must be a bad monkey to get that wrong!
There are 3 oxbridge graduates in my team and all 3 are CFA charterholders
I don’t know if real bankers have a CFA or not.
Actually, when I’m recruiting someone, I don’t care if he has a CFA or not. But certainly if a CFA is adding value to his CV, I’m not interested by his CV.
…Comparing CFA vs MBA is like comparing apples with oranges. Both have different objectives. MBA is focused on managerial aspects as compared to CFA which establishes analytical skills.
Disagree – That’s like saying a degree is worthless because everybody has one, how many people can get into banking without a degree these days? The more people who have the CFA, the more it becomes the new hurdle, a basic bechmark people need to have before being looked at. Very old bankers can excuse themselves from this.
However, on the markets side I do agree that the CFA doesn’t actually make you a better trader/investor. Before, during and after the crisis I was the only person in my firm who returned over 25% pa – most made losses not just weak returns. These losers had CFAs, PhDs, MBAs and were mostly Oxbridge. I went to an average Uni and never undertook any other studies – how many nerds with top grades can really claim to understand mass psychology when they don’t have friends, they spend all night studying? CFA serves no purpose there.
I’m a CFA Charter holder after passing CFA L3 last June. To be honest I do not think it has helped me one bit except having 3 extra letters after my name.
I did a BSc and MSc from LSE and when I’ve met for interviews with some private equity houses they only asked me about LSE and CFA has never come up or been a requirement. I’d probably only recommend it to someone as a cheaper option than doing a decent Masters or MBA if they can’t afford that or take time of and have not done much finance/investment in their undergrad or masters.
Also, unlike a quality MBA or Masters programme they are very selective who can have those degrees just to get in or accepted. with CFA any joe who has managed to get a degree (even a third class from the worst university) can sign up and study. Unfortunately, not very exclusive if you ask me as CFA want to sign up as many people for the ‘s!
Just finished Level 3 and now a charterholder. Author sounds like one of the 54% that didnt pass.
I’m rich bitc#!
I agree and disagree with the author. I am a CFA charter holder; it has done my career favours because I work in asset management. However for Investment banking it is not really needed. If you wish to go into a career in fund management then CFA is a perquisite. The CFA qualification is endorsed by Warren Buffet mentor Benjamin Graham, who are we to argue with their achievements in this industry.
Joseph K, you said that you have the CFA and a MSc from LSE, and that in interviews with private equity firms they only asked you about LSE and not the CFA…
Well, with all the qualifications you claim to have, how many more do you need to understand that the CFA is more suited for Hedge Funds and an MBA (MSc otherwise) is for Private Equity?
You should know the differences already! because you did the CFA and work in Private equity
Personally, the CFA has worked great for me in the sell side and buy side.
In my 25 years experience hardly any of these so called “prestigious” qualifications count for much. The most talented candidates are always the ones you least expect. The best people I have hired do not hold CFA’s MBA’s or a Cambridge Degree. (I myself do hold the CFA). I have hired these people in the past without success. In fact I would go as far to say that I almost avoid this people which may sound ridiculous to some. I have to agree with DiscoDave on this one.