CFA in Corporate Finance

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I heard two conflicting versions of this:
Version 1:
CFA is a complete waste in Corp Finance / treasury. CPA is much more valuable. Not many people in corp finance have CFA.
Version 2:
A lot of people working in treasury is finance savvy. As they have to hedge corporate holdings, pension funds etc.
Which one is correct? Will CFA open job prospects in corp finance?
 
Version 1 is true.
But accounitng sucks major balls. CPAs wear suits with elbow pads. They are the most boring people in the universe.
 
actually, i know some CPAs that will throw down beers after work and know how to catch tail.
also, CFA in corp fin treasury is hot. Know some cats at fortune 100s that are getting it, and they stand out because thier bosses wish they had it
 
I may have not been very serious about version 1. My boss and CFO have been very supportive of my CFA; it is definitely a tool to differentiate yourself from others.
Overall, asset management is fairly limited in corp fin. If you want to advance, CFA is helpful, but CPA is required.
 
I work in Corporate Treasury and am getting CFA.
CPA field in Corporate Finance world is definitely a requirement if you want to get into the CFO and upper mgmt ranks. Corporates are heavily based on reporting and keeping the books clean, hence the CPA.
The treasury departments for Apple, Cisco, Microsoft, Google, are basically running their own cash stockpiles in house (Mostly in Reno), hence the CFA expectation. Not as much risk is being taken here obviously but it is very good asset management experience.
 
I work in Treasury in the Banking Industry.
The CFA is quickly becoming more and more popular in Treasury dept’s everywhere.
But a solid accounting background is very beneficial as well.
I know of 6 VP’s of Treasury (or equivlent) in different institutions including mine.
3 are CFA’s, 3 are CGA’s (Canada).
Personally, I got a little past 2/3rds through the CGA program and couldn’t handle the accounting (specifically auditing) anymore, so went into the CFA Program.
My boss is a CGA, his boss is a CA. Makes for some fun designation bashing once in a while.
 
I did not want to do treasury. Even in financial organiztion where I work, it basically just cash management, making sure all the trust/spv/subsidiary bank accounts have sufficient funds. For excess cash, it is just basically in the bank account.
What value adding activities can CFAs do within treasury role?
 
For a multinational corporation, isn’t it important to hedge exchange rate so the balance sheet/profit will be optimized?
 
CFAchief Wrote:
——————————————————-
> I did not want to do treasury. Even in financial
> organiztion where I work, it basically just cash
> management, making sure all the
> trust/spv/subsidiary bank accounts have sufficient
> funds. For excess cash, it is just basically in
> the bank account.
>
> What value adding activities can CFAs do within
> treasury role?
First course I ever took through TMAC (Treasury Management Association of Canada) the instructor was (I thought) making a joke basically to not even bother to explain what your role is as a Treasury professional because no one will understand.
Well, I now understand what he meant.
 
I think it depends on your company and its culture and where HQ is located.
It seems like the closer a company (or division) is to big cities, the more they appreciate having a CFA charter, but that may just be my perspective as well.
 
Big Babbu,
I was not trying to be disrespectful. Could you give me a better idea what does that role entail? My experience with treasury has been limited to convincing them that my cash forecast is correct, so I really do not know.
 
No offense taken CFA dhief, and for the record, nor was I. But it is a good point because even people who work 10 feet from me in corp finance openly admit they have no idea what we do in our Treasury dept., and for the most part don’t care. It’s a question that comes up on this board quite a bit.
Liquidity management is a big part of the job, no doubt.
But there’s alot that goes into that. Cash flow forecasting as you referred to.
We are heavily involved in both Commercial and Retail mortgage securitization, and other fixed income securities.
Asset Liability Management is also important. That involves some good knowledge of statistical analysis and derivatives.
We are a smaller (relatively speaking) financial institution, so we don’t trade equities, but most if not all of the larger banks trade equity securities.
Foreign exchange trading is another area you have to have some knowledge in.
There’s more I’m sure, but you can see a direct link between alot of the things I’ve listed and the CFA program. As I said somewhere else, the CFA designation is becoming more and more popular in Treasury departments everywhere.
I love it and find it a very interesting field.
 
Got to agree, the CFA is becoming more well recognized and valued in Corp Fin/Treas. I used to work in Reno, and there were several guys in my office that had it. Most of the upper management in my shop were ex-Wall Street guys, so they recognized the importance.
 
golf, what kind of finance jobs are available in NV or near Vegas?
 
CSCO, ORCL, AAPL all have their Treasury investment ops in Reno. In addition, Int’l Gaming and few other bit players are there including a couple of money managers. Reno in pretty interesting. I got there in ‘05, right near the peak in housing. Dumb me, I bought. Reno is better diversified that Vegas in the sense that it isn’t as all about the casinos. Tahoe and North Star are huge, and SF is only three hours by car. On my street alone there were four or five people that used there houses as weekend getaways from the Bay. Once the housing market collapsed, Reno pretty much stopped though. The only other large employers are Washoe County Hospital and Univ. N Reno. I keep in touch with the gang, and they said that it’s gotten worse since I left in 07. Most everyone is burried in the homes, and won’t be moving anytime soon. Good buying opportunity if you can find a job.
Cheers!
 
CFAchief Wrote:
——————————————————-
> I did not want to do treasury. Even in financial
> organiztion where I work, it basically just cash
> management, making sure all the
> trust/spv/subsidiary bank accounts have sufficient
> funds. For excess cash, it is just basically in
> the bank account.
>
> What value adding activities can CFAs do within
> treasury role?
CFAChief - I can assure you there is more to it that just putting cash in a bank account. While that is a part of the role that is probably the most simplistic. While we manage money to preserve liquidity and maximize yields w/o significantly increasing risk, you cannot just call that a rote task. Strategy is definitely employed here.
Managing counterparty risk is huge right now (for obvious reasons). Diversifying a several billion dollar cash portfolio when banks are falling left and right is a nightmare. Should I invest with Ireland and take that risk when they are paying 4% when Tbills only pay .03%?
Liquitidy issues - Do I buy Auction Rates or other seemingly safe investments that might give me a higher return but more risk? Many Treasury directors have been fired for this…
FX hedging - I could go on for days here but MBAFinance summed it up quite nicely. Options versus forwards, following macro trends all very important.
Financing - This market is horrible right now. What do I do when financing costs are so high? Converts, Warrants, etc? What is the best Capital structure for my company?
Real Estate- Should I buy property in Bangalore or keeping renting, what is my NPV profile? definitely a lot of research need here.
These are all things we deal with on a daily basis and I find my knowledge of the CFA curriculum parallels my duties very closely.
 
What’s the career path in treasury and how much $$$ can you make?
 
The CPA is only critical for reporting roles whether it be treasury or corporate finance.
Smaller firms that have more blended departments might favor CPA’s. However, more sophisitcated firms small or large tend to separate FP&A, Biz Development, Accounting/Reporting, and Treasury.
For FP&A, Treasury, and Biz Development, MBA trumps CFA and CPA. CPA may have a slight edge in some circles, CFA may have a similar edge in others. It really depends on what the firm values.
For example in many firms I’ve inquired about for Treasury posts (e.g. Boeing, J&J, Northrop, Sonic Corp. to name a few) the CTP was the designation of choice.
Ideally if you don’t want to get bogged down in mundane G/L reporting and focus solely on forward looking planning and analysis – get the MBA, get a job at a larger and/or sophisticated firm, then consider the CFA or CPA depending on firm preferences. If you have to go after one or the other now i.e. CFA or CPA. I’d roll with CFA if you want to distinguish yourself as a forward looking analyst and modeler capable of seeing the bigger and making realistic assumptions as opposed to a stereotypically less creative, strict rule following, detail oriented, likes routine and order, bean counting accountant.
 
fxguy1234 Wrote:
——————————————————-
> CFAChief - I can assure you there is more to it
> that just putting cash in a bank account. While
> that is a part of the role that is probably the
> most simplistic. While we manage money to preserve
> liquidity and maximize yields w/o significantly
> increasing risk, you cannot just call that a rote
> task. Strategy is definitely employed here.
>
> Managing counterparty risk is huge right now (for
> obvious reasons). Diversifying a several billion
> dollar cash portfolio when banks are falling left
> and right is a nightmare. Should I invest with
> Ireland and take that risk when they are paying 4%
> when Tbills only pay .03%?
>
> Liquitidy issues - Do I buy Auction Rates or
> other seemingly safe investments that might give
> me a higher return but more risk? Many Treasury
> directors have been fired for this…
>
> FX hedging - I could go on for days here but
> MBAFinance summed it up quite nicely. Options
> versus forwards, following macro trends all very
> important.
>
> Financing - This market is horrible right now.
> What do I do when financing costs are so high?
> Converts, Warrants, etc? What is the best Capital
> structure for my company?
>
> Real Estate- Should I buy property in Bangalore or
> keeping renting, what is my NPV profile?
> definitely a lot of research need here.
>
> These are all things we deal with on a daily basis
> and I find my knowledge of the CFA curriculum
> parallels my duties very closely.
Wow, that stuff actually sounds interesting. I had imagined Treasury as very blah stuff.
 
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