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Is becoming a full CFA Charterholder actually a waste of time?

CFA Level III exam results

It won't give you super powers.

Today’s CFA Level III exam result day. Be warned that they may be late: when results came out for the CFA Level I and II exams last month, some people complained they never received them by email and had to login to the CFA’s own site (which initially crashed) to find out their fate.  At the time, the CFA Institute blamed “anti-spamming techniques used by major email clients such as Google.” This may not happen today – only 20% of those sitting exams in June typically sit level III, so results day is more manageable, but still.

Even if Level III results are on time, angst is inevitable. CFA Level I is a multiple choice paper, so the answers are cut and dried. Similarly, the set questions in the Level II paper don’t leave much room for subjectivity when it comes to marking. However, because CFA Level III is free-form and answers take the form of mini-essays, passing and failing is down to the foibles of whoever marks your essays. This can be frustrating. At 54%, the pass rate for CFA Level III is higher than for the other two exams, but 46% of people still fail. 

If you’re in the 46% today, you might be inclined to wonder whether it’s all worth it. After all, it takes 900 hours (at least) to pass all three levels of the CFA. Becoming a CFA Charterholder will cost you dear in lost social and family time, but will it really make a difference to your finance career? Not necessarily. We spoke to a selection of finance professionals who’ve slogged their way through. They’re not all enthusiasts.

The leveraged finance professional: “I don’t regret it, but it wasn’t worth it”

“Gaining the Charter wasn’t easy. I became a Charterholder seven yeas ago after passing every level the first time. I was working full-time whilst taking the qualifications and wasn’t sponsored by my employer. I studied long hours, both at the weekends and before and after work. I was lucky though – I know people who paid for expensive evening classes and had to take each level twice!

And now? On the basis of career prospects alone, I’d say the exams aren’t worth the effort. I’ve been out of work for 12 months and being a Charterholder seems to have made no difference to my prospects. Many people seem to see the CFA Charter as some kind of Holy Grail, but they’re mistaken.

This lack of recognition for the CFA Charter might have something to do with the fact that I’m based in London. There seems to be minimal recognition of its value in Europe. In London, people are more interested in whether you studied at Oxford, Cambridge or the London School of Economics than whether you’re a Charterholder. And if you want to future-proof your career in the City it makes more sense to take the ACA exams – believe me, there are always jobs for ACA qualified accountants in London. I suspect that the CFA Charter is more worthwhile if you’re working in America, or in wealth management in Asia.

This doesn’t mean that I regret becoming a Charterholder entirely. As with any marathon, you need to take joy in the journey itself. Studying the qualification has given me a pretty good veneer of financial knowledge and culture, and I get some pretty interesting newspapers and magazines from the CFA Institute in return for my membership fee.

If I had my time again though, I’m not sure I’d bother with the CFA. In my case, it’s been a bit of a waste of time and money. I’d have been better off learning a new language like German instead – it would have taken a lot less time and actually enhanced my job prospects in Europe.”

The risk manager: “Getting the Charter was a slog and it hasn’t enabled the career change I’d hoped for”

“Having the CFA Charter is definitely an advantage: it adds credibility and is a signal of competence. However, I was hoping to use the charter to move into asset management and so far that hasn’t worked out. I feel like that Charter will only enable this move if I combine it with heavy networking and intense job hunting, which is hard when I’m holding down a full-time job.

In retrospect, studying for the Charter was also incredibly tough. When I was a CFA candidate, I focused very hard on studying and that probably delayed me from actually progressing in my current role. Nonetheless – and even though what I learned in the CFA isn’t relevant for risk management, it has made me a better risk manager and investor overall.

By studying for the CFA Charter I discovered new areas of interest and found the motivation to pursue them. I believe I gained a lot from it and I don’t regret doing it. Yes, it seems to have been worthwhile – but only the future will really tell if that’s really the case!”

The fixed income portfolio manager and CFA Level 1 teacher: “The CFA Charter was very worthwhile and makes you stand out in the job market”

“The CFA Charter isn’t just about acquiring Masters level knowledge by studying for the CFA exams. It’s also about attending events which increase your understanding of financial markets in the broadest sense, networking, and becoming more attractive to employers because of your proven experience and obvious interest in finance.

The CFA exams really helped me at the start of my career as a junior portfolio manager with limited understanding of corporate bonds and little knowledge of financial markets. The networking events have also been very useful. Once I gained my charter, I started to volunteer at the CFA Society as a board member and instructor for new students and this forced me to keep up to date with new developments in asset management.

I’m current in the process of moving to Seattle and holding a CFA Charter has helped me here too. Thanks to my membership of the CFA Society, I’ve made some very good networking contacts that I think would have been very difficult to otherwise get. In terms of finding a job, having the Charter makes you stand out in the job market. – In future, I think you’ll need it just to make sure that you stand out negatively – it’ll be a kind of baseline of competence.

Do I use everything I learned? Nope. Would I do it again? I think so.”

Contact: sbutcher@efinancialcareers.com

Photo credit: Grand Central with 42.5 F1.2 Len by Wasabi Bob is licensed under CC BY 2.0.

Comments (14)

  1. CFA is a war medal not a career guarantee. Something tells me, this persons “7 yrs exp” is the reason for unemployment. additionally, relative to other options, CFA is not expensive.

  2. The sure thing is tha having the CFA chartes does not hurt your chances. If this guy does not get interviews is because another reason he has not told us, probably bad professional background, lack of networking skills, etc.

  3. This is poorly written and really doesn’t apply. The author tells you to not pursuit the CFA designation based only on his limited experience. Additional, his character is quite out there as he thinks he’s better than other people “Gaining the Charter was not easy. I became a Charterholder seven yeas ago after passing every level the first time. I was working full-time whilst taking the qualifications and wasn’t sponsored by my employer. I studied long hours, both at the weekends and before and after work. I was lucky though – I know people who paid for expensive evening classes and had to take each level twice!”

    It doesnt prove anything by passing or not the first time. I think you need to work a bit more on your personality than the resume.

  4. IMO – Networking > MBA > CFA. But that is not to say CFA is completely useless, just that it is good to have, however it is not a compulsory/must have. In addition, blaming on just CFA only is restrictive, there could be more factors at play…

    Would rather take up MBA which have/open up more opportunities and take less time.

  5. Comparing the CFA to the ACA is comparing apples to oranges.. They both provide you with different skills and knowledge, gearing you up for different roles within finance.. I manage money in the city and the vast majority of people I work with in the front office – if they have a designation – have the CFA. Some have an MBA, and very very few people have the ACA. The article above is very poorly written since it doesnt contextualise that various qualifications aid career prospects differently. If you want to manage money within the financial markets, the CFA is by far and away the most relevant and useful. If you work more within Private Equity or within Treasury then the ACA is more useful. Perhaps the gentlemen above made the wrong qualification choice based on his career expectations, which is a totally different point to what he is making..

  6. I know four CFA holders. 2 in London, 1 in New York and 1 in Dubai.

    All but the one in Dubai have told me it’s been an utterly pointless endeavor for their careers as they have gained no practical advantage and frankly, in their offices (and they work for 2 of the largest asset managers in the world) no-one cares whether they have it or not.

    I’m not suggesting it’s good or bad, I’m just repeating what they told me.

  7. The CFA is “nice to have”, however in the UK it is much better (and easier) to get the ACCA, ACA or CIMA. These degrees will help you pay the rent. I am a CFA charterholder and I am taking ACCA exams, it is a long road though.

  8. – “The author tells you to not pursuit the CFA designation based only on his limited experience.”

    Did you read in the article that “In my experience, the CFA Charter is not worth it on this basis.” The writer never claimed that he conducted a thesis on the usefulness of CFA. He didn’t interview nor ask anyone. Whats wrong with expressing your own opinion on something?

    – “Additional, his character is quite out there as he thinks he’s better than other people”

    I fail to fathom this logic. He clearly said that he was lucky while others weren’t. It has nothing to do with ability.

    – “It doesnt prove anything by passing or not the first time. I think you need to work a bit more on your personality than the resume.”

    Again, whats wrong with the writer’s personality? He clearly expressed his own opinion. Are you saying that whoever doubts CFA’s usefulness have flawed personalities?

    I think you need to work a bit more on tolerating other people’s opinion.

    whywritenonsense Reply
  9. I am a CFA charterhoder in Asia- have experience in IB and now currently working in a VC. CFA charter has not helped me much to get interview calls or job prospects…..some recruiters also told me….learing mandarin would be more helpful in getting a job in HK than a CFA charter…..I guess they are right…….my suggestion- financial world is changing very fast- weigh your options before putting in money and efforts

  10. Getting the CFA charter didn’t get me the asset management job I was hoping for, but the knowledge I gained from the experience has literally made me millions of dollars. I’ve been managing my personal account largely according to the philosophy of Robert Haugen, whose work was in the assigned texts. In addition, my use of dynamic hedging with puts (also in the assigned texts) has saved me from disaster on several occasions during my 16 years as an active (hyperactive, actually) investor.

    DataDrivenInvestingFan Reply
  11. I didn’t do the CFA because time is the most precious resource I have; more precious than money: I can borrow the latter but not the former. IMHO investing so much time would only make sense if the rewards were clearer and higher; sadly, they are not. The CFA is no substitute for experience; no hiring manager in his right mind would prefer hiring someone with less relevant experience but with a CFA over someone with more experience but without these 3 letters on his business card.
    People are biased and unreliable; surprise surprise, they tend to recommend the decisions they took, and rarely admit making wrong choices. This applies to me, too :) I have met many back-office people who spent lots and lots of money on an MBA, only to land the very same job they had before – yet they are all ‘very happy’ they did it, no one admits it was a waste of time and money. Same for the CFA: it takes a certain maturity and confidence to acknowledge that you, in fact, wasted years of your life for something which did not deliver what you thought it would.
    Finally, I am not sure how representative it is, but I have seen people with what I believe are too many qualifications; I interviewed people with the CA CAIA and FRM. Rather than being impressed by their achievements, I actually questioned their choice, because my concern was that they were chasing qualifications to obtain a career change they couldn’t obtain otherwise.

  12. There is no magic pill that guarantees career success. When I see a CFA on someone’s resume, I know that they are at least serious about their career – not a quality to be scoffed at imho

  13. The main issue is that most of the people going for CFA nowadays don’t necessarly want to work in the AM industry.

    As result, they end up saying “CFA is useless” because they work in IB or VC.

    However I think CFA is overrated even if people who own it (including myself) try to reassure themselves about the worth of the designation.

  14. Above all you need network and to buy a master degree from some “prestigious” school. Then the CFA is good to have, in combination with the ACCA for example and three other languages (including English and German). I took the ACCA, 11 exams in 9 months, after the CFA to get a better grasp of balance sheets and valuations. I also want to take a financial modeling certification. As my career has stopped (two years unemployment), it recomforts me somehow and I can network at the CFA, ACCA conferences. I also take language classes.

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