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

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 (18)

  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.

  15. It hasn’t panned out for me at all. My motivation for getting the CFA was to get me out of the lesser-job cellar which led to me getting laid-off because it was obvious that I wanted a better job and the company was shrinking. I’ve had the CFA well over 5 years too. Carlo, you really make the most valid points on this thread. I have many theories behind my troubles but I will even go a step further and say that the CFA has PREVENTED me from getting jobs. It makes us look more expensive, more intimidating to an existing team/managers, makes us look like we will hop ship when we get what we want, etc.

    I spent a lot of time and money on a Tier 2 school MBA/CFA and now regret my decisions. Hopefully, I wont feel this way but it will take a job for me to feel otherwise after 6 years of looking. And don’t get me wrong, I have applied to both basic and advanced jobs and am willing to take steps back to step forward. Whywritenonsense, your points were spot on; none of us need more subjective judgement than we already face from HRs who don’t value the objective charter.

  16. yes Fred, just get few more qualifications and learn few more languages. Maybe some employer would fall in love with the pages of qualifications you have. Wake up folks, there are so many people with so many qualifications, getting another one just won’t cut it. There are way too many people working and wanting to work in finance, coupled with a shrinking industry, we all just need to face the reality, which is a lot of us will need to change careers. CFA won’t do anything for you anymore.

  17. not working well, at first i thought for having the CFA designation would increase my career.
    turns out, i am nowhere. worked for accounting finance division head who doesn’t understand anything about accounting and finance, and the same thing goes for the finance director. all of them got the position with higher inside channel but doesn’t understand anything about acc fin or the business (bullshit and licking ass works well in corporate). when the company had difficulties, office politic played everybody is kicking each other ass and use other people as scapegoat. i am unemployed for almost 1 year with a CFA designation ( i was the scape goat), and now the company is firing almost 1000 employees while the peoples who dont understand anything still there and the business still has no hope or whatsoever according to my associate who still there. i tried to applied new jobs, but keep getting rejected. it turns out, there’s alot of people work in finance and accounting who doesnt know anything about accounting or finance, and my CFA intimidated them.
    it help if you are a woman or beautiful woman, or you are a daughter or son of a business owner or high executive. i know one guy who understand shit about accounting or finance and worked in UBS( his father is the bank customer). and now he is vice CEO of a property company.
    so go figures.

  18. I got the charter in 2006. CFA was the biggest waste of my time in life, hands down. I did work in a buyside firm but not in research (though not in operations either).

    I had a friend who passed level 1 with me and was never able to pass level 2. He wanted to work in buyside, but never really took off. Guess what? He went to a decent MBA program (maybe ranked 50 or so, but strong local presence), and started making far more money than me (while I was still finishing up my CFA) as a corporate financial analyst.

    If you want a buyside research job and you aren’t already in one (or your undergrad pedigree was crap), you need a top-tier MBA or very strong push and connections. If you want to just make good money in any area of finance, get into a strong MBA program that has good connections to corporate finance jobs.

    In the end, find something you love and passionate about. I’ve since switched career and CFA is of zero value to me. I’m far happier.

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