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GUEST COMMENT: The CFA is becoming the quality standard for private bankers

An increasing number of private bankers are taking the CFA. In 2009, 11% of all charterholders worked as private client wealth managers/advisors. We see more and more private bankers taking the CFA for the following reasons:

1) Regulation

After the events of the past 3 years, it’s fairly safe to say that regulators will expect further certification of people employed in the financial markets. For example, this has proven to be the case with the Retail Distribution Review.

Private Bankers find themselves under the spotlight. Given the complexity of the products now sold to clients it is not surprising that the CFA has been included as one of the qualifications accepted. In addition, the CFA’s ethical coverage is very well regarded and reassures regulators and clients that their private banker’s moral compass is fully functional.

2) Credibility

People matter in private banks and the war for talent is more prominent in this industry than most others. Recruiting from competitors is a zero-sum game and most senior private bankers admit there is a need to increase the overall pool of private bankers.

A number of private banks have recognized that they need to expand the places they fish for new hires. This has led to an acceptance that new hires may be inexperienced and wet behind the ears. The CFA provides a 3 year pathway to competence. It also provides a natural filtering mechanism. A new breed of private banker will be servicing clients in the next 5 years, they will be technically literate across multiple products and immersed in the numerate concepts of risk and return. The CFA will be the badge they flash to show their clients this.

3) Client expectations

The demographic of private banks’ clients has changed. Clients are now more technically literate, and they expect the same of their private bankers. The days of boozy lunches and all-day meetings at the test match are coming to an end.

There are, however, two caveats,

Firstly, the CFA is very tough to pass. The approach required doesn’t sit easily with the other competencies a private banker must have. Success requires a substantial investment of time.

Secondly, the CFA is not the only qualification that is attractive to private bankers, the CISI PCIAM and related papers have gained in popularity over the past 5 years. Competition between exam standards is healthy, and will force respective exam bodies to continuously evolve their syllabuses. One thing is, however, certain: exams for private bankers are here to stay.

Comments (9)

  1. I think an advanced degree in quantitative finance or similar would be better than the CFA. When I was interviewing for hedge funds and mentioned I was doing the CFA the comment I got was “Are you a quant analyst or a salesman?”.

  2. CFA is useless in private banking, which is a purely sales job.

    Private Banker Reply
  3. do u even know what a private banker does awillis? quantitative finance is the most irrelevant qualification for them

  4. FSA is making it mandatory to complete CFA Level 1 to be fully certified to sell. It’s coming.

  5. I maintain that being able to play golf well is more useful to a private banker than the CFA.

  6. he’s talking abt private bankers .. thats much closer to salesman than quant analyst .. taken that into account in ur quant model next time u come up a recommendation/conclusion

  7. ..Having a CFA makes you totally overqualified in private banking. Its a sales job and its best not knowing too much.

  8. I would go further and say that private banking is a poorly paid telemarketing job in most cases. Nothing more.

  9. The most rigorous money making professional organization, They make maximum effort to fail you, so that you could pay not only examination fees but other fees as well to repeat exams
    ‘This is called (One sided) Investment banking

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