Value added from the CFA?

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FIAnalyst

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I am a HG research analyst at a BB.

Considering sitting for L1 in December, but with my hours the study time won't be worth it unless I will get value out of it.

I have heard mixed emotions from senior analysts, and just wasn't sure if it would add value.

When my analyst time is over I would accept an associate position, if offered. In that case I believe the CFA would only help in so far as it might make me more attractive to offer the position to, but only slightly as it is performance that matters most.

If I dont get an offer I would evaluate my options and either go back to b-school and attempt to switch the the investment banking side, look for a similar position at another BB or look to switch to HY research or trading with the hopes of moving to a HF.

Will the CFA add value if I do look to make a move down the road? What if I have only completed Level II or so by then?

Basically, I am asking if BB firms find CFA candidates a more attractive option than those without the CFA, assuming similar work experience.

I will put the time in if I believe that it will benefit me either financially, either directly through salary/bonus or indirectly through helping me make a move if it becomes necessary.

Thanks.



Edited 1 time(s). Last edit at Tuesday, June 13, 2006 at 09:49AM by FIAnalyst.
 
Do you really think the charter would have become this large if it added no value to analysts such as you, the very people for whom it was designed?
 
I am just uncertain to the level of value.

About 1/2 of the senior research analysts in the group have CFAs, and even the ones that do have said that they don't know how much it has actually helped advance their career (as well as some having MBAs, throwing into doubt if any benefit was from the CFA, MBA or combination of both).

Then on this board it seems that many people are working outside of finance with the hopes of breaking in, so I was not sure how much value was added for someone who already had experience.
 
FIAnalyst-- No one wants to put in a lot of time and sacrifice for something they're not sure will ever pay off, but the fact is you'll never know if it will pay off or "add value" to you.
A CFA that I work with put it best. He said starting and finishing the CFA program is a lot like doing my daily workout. It's hard to get motivated, it sucks while I'm doing it, but I'm always glad I did it when I'm finished.
 
"He said starting and finishing the CFA program is a lot like doing my daily workout. It's hard to get motivated, it sucks while I'm doing it, but I'm always glad I did it when I'm finished."

Feel the burn! Feel the burn!
 
Well, your problem then becomes how do you define value? On this board, most everyone will agree it adds "enough" value to be worth it - via increased salary, promotions, job satisfaction, marketability and personal development. I would say the time investment is relatively small - we'll call it 900 hours spread over 3 years. Yes, there appear to be a lot of people here considered the designation as means to break into finance, but given that only 1/5 candidates eventually receive the charter, it's these people who are most likely to fail, and the experienced people who are actually receiving the charter.
 
Heck most graduate degrees are of questionable value too, but it doesn't stop droves people from applying each year.

I can't say fro sure that the CFA has added to my carreer, but I sure wouldn't want to find what it would be like not to have it.

Look at it as downside protection. Also if 50% of the senior analysts have it, sounds like a de facto standard to me.
 
For me the value is unquestioned. My salary has more than doubled since the day I took the Level I exam in December 2003 (I became a charterholder last September and saw two successive 20k bumps within 6 months related mainly to that fact, also had bumps after passing each of the first two levels. It's a big deal at my firm, as you can tell). Some of that is related to our firm's success and my contributions, but a lot of it relates to the CFA program.

I also find that industry people show me a hell of a lot more respect now. Plus the strippers that my local society brings in for monthly meetings are incredible.



Edited 1 time(s). Last edit at Tuesday, June 13, 2006 at 10:58AM by sox1918.
 
Only you can attach a value to pursuit of the CFA.......................

Are you interested in developing your knowledge and expertise throught commitment to an extended, formal, and rigorous eduction program?

Do you have the discipline to make that commitment and follow through on it?

Are you intellectually curious and enjoy academic challenge?

The CFA is indeed another "feather in you cap" but I am inclined to think that if you don't see something else in it your prospects for success are limited. I think you need to know you want to do it when you start.
 
when it comes to acquiring knowledge, it is rather difficult to sit down and actually read something and retain that knowledge. it is really only when you're forced to read, study and remember in an examination scenario that you retain most information.

therefore, i believe that i know so much more because i was forced to remember. i don't disagree that you can learn through other methods (reading journals or the newspaper), but you'll have a hard time forcing me to sit down and study for a total of 12 months unless there's something at the end (CFA). also, most people will only learn what they MUST, which is usually related to work. this gives you a very narrow scope of data. CFA forces you remember everything from accounting tricks to screw around with earnings quality to FX arbitrage to VC concepts, etc. etc.

even though i don't believe that having the CFA is the only reason i've moved along in my career at a good pace, i can say that my income CAGR is 42% since the day i opened level 1 textbooks. based on current information, my horizon CAGR at 31/12/06 should be closer to 50%. AND, more importantly, since i actually got my CFA (which is about 2 months ago), i've seen an IRR of 1124%. my 31/12/06 horizon IRR from the time i got the CFA is 200% (more realistic than the 1124% because of the amount of time that will lapse to the end of the year compared to just a 2 month period).
 
To me, the CFA body of knowledge is an excellent way of organizing one's study of finance and the exams in conjunction with the work experience requirement is a good way of demonstrating competence and knowledge to others. I would definitely recommend that you do read more widely than the CFA CBOK.

I feel that getting some of the CFAI recommended books and reading through them is a very good place to start or expand one's financial education, regardless of whether or not you want to pursue the charter.

If you are too lazy or want to get a rough quick overview of the syllabus why don't you read the secret sauce (it will take a day)? It's also a great way to refresh your financial knowledge.

sydneybound

Have you included the opportunity cost of hours spent studying/taking exams in your IRR figures?
 
no, because there wasn't any. that time would have been wasted watching tv or drinking. don't forget, jan-mar are pretty crappy months back in canada.
 
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