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As a quant I should have found the CFA Level I easy. I didn’t

Quants

The CFA level I exam is notoriously difficult and despite the increase in people sitting the exams this June, just 42% of people managed to pass. Thankfully, I was one of them. I come from an unconventional academic background and work in the financial sector as a quantitative analyst. In theory, I should have found the exam relatively easy, but it’s actually been an eye-opening experience. This what I’ve learned.

1. The CFA is a hard slog for everyone, I am not special

I studied Computer Science at university at both an undergraduate and masters level. I majored in machine learning, more commonly known as artificial intelligence, which is widely acknowledged as one of the more difficult areas of study and one where both investment banks and large tech firms are looking to recruit for.

After this, I found myself working as a quant for a large asset management firm. Quants are seen as the boffins of the financial sector, academically gifted with an above average IQ. But here’s the thing – I realised I was just like everyone else when I was taking the CFA. I needed to check my ego in at the door, put in the 300 hours of study needed and work as hard as anyone. You are not special. You are not a beautiful and unique snowflake. Wait, that’s Fight Club.

The point is, I found that the quantity of work I needed to study and understand challenging enough, but also the style of study was so unfamiliar that it became difficult.

As a computer scientist I am used to solving problems and writing code. I’m not used to sitting down in front of a pile of textbooks and reading, taking notes, and doing so many small worked examples. The last time I studied in this way was in high-school.

Therefore, I had to spend a lot of time first learning how to study before I could focus on what I needed to study.

2. It helped me gain perspective

The saying ‘when you are a hammer, everything looks like a nail’ can easily be applied to both quantitative finance and computer science. When you are a quant, everything you study ends up looking like maths or code.

You to study an array of subjects in the CFA like ethics and professional standards, corporate finance and portfolio management as well as quantitative methodologies. This broadens your perspective.

Almost immediately after completing my studies I found that the way I viewed my day-to-day work had evolved. I began seeing elements of corporate finance and aspects of financial reporting in what I did.

As someone who is up to his ears in code on a daily basis, this has been really helpful in trouble-shooting real world business problems as I now have a lot more tools available to me. I think this will become more valuable as I progress in my career and find myself doing less and less technical work and more and more managerial and strategic work.

3. The CFA as a long-term career investment

As you progress in your finance career, it’s inevitable that your responsibilities will go beyond technical elements and towards managerial and strategic goals. From this point of view, the CFA has been an eye-opener, even if it’s never going to be as exciting to me as building stochastic models and using neural networks to approximate credit risk.

I’ve actually decided to take a break from pursuing the other CFA levels until I complete my Masters thesis, but I believe that having a professional qualification under your belt will help your career in the long term.

4. What I will get out of the CFA designation

I don’t expect the CFA to necessarily change the direction of my financial services career, but having come from a relatively unconventional background, going down the much-trod route of pursuing the CFA designation has given me a deeper understanding of the financial services industry as a whole. As I mentioned, it’s really helped me gain some perspective in my day job, and changed the way I think about the work I do.

From my perspective, this is one of the best elements of studying for the CFA – it’s not necessarily going to radically change your career, but it will certainly help broaden your horizons.

The author works as a quant in large asset management firm. He runs the blog Turing Finance, which features his musings on life as a quant.

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