Bloomberg Bearish on CFA

[fwang1014]

In your way, it should be 193,955 passes at Level III vs 2,222,330 total administered exams ~ 8.7%

[CFAbeatmeup]

@SHoot85

@danv0330

@CFAbeatmeup

Here’s where I disagree with most CFA Candidates and Charterholders. I think the problem is too few Charterholders; not too many.

I agree with you … there are over 750,000 CPA just in the United States for reference. Where is the article about too many accountants?

The direction is that the CFA is becoming a requirement increasing less important roles.

Out of the 120,000 Charterholders, that includes many which are no longer working in the investment management profession at least on the corporate side… Also consider that not 120k Charterholders are actively looking for a job, so when a job posting goes up you are only competing against other Charteholders whom are actively looking for a job… In a big city that is still significant, but id bet that out of 120k charterholders, only a small percentage are “looking” for a job at any time… If you are hiring, your choices are limited to the resumes that show up on your desk.

In my opinion the CFA should be required for “portfolio management” roles and possible sell side research positions… If you dont have the mental capacity to pass the CFA exams, you probably should not be mananging other peoples money… anyone starting a career as a sell side analyst at any of the big investment banks is basically pushed into pursuing the CFA. Even people that (already) work at GS pursue the CFA because they know its becoming a requirement.

Comparing # of accountants to CFA charterholders seems like apples to oranges to me. Virtually every company, public and private, needs an accountant. A large percentage of these firms do not need someone to invest their money in equities, I would guess.

Maybe I didn’t make my point well. Yes, virtually every company, public and private, needs an accountant. Why’s that? Because the federal government (in the U.S.) has mandated this. Additionally, they don’t need an accountant, they need accounting. Again, the government has required the person to perform this function must be a licensed CPA. And, respectfully, you’re wrong: Pretty much every company needs somebody in finance (whether it’s a pure investment role, a treasurer investing in low-risk checking and T-Bills, or a corporate finance guy finding the ROI on new projects). Thinking the CFA is only for portfolio managers (and only equity investing at that) is wrong. Matter of fact, I’d say L3 was more about Fixed Income investing than Equities.

I agree the CFA should not attempt to make its designation a license (as I said above), but my point was there are ways to make the Charter more valuable without paying more. My $0.02.

[danv0330]

^ i dissagree… equity analysts need to know everything about a companys capital structure including debt issuances. pensions are important as it relates to contingent liabilities for the companys that offer it…

corporate finance departments of companies in any industry are roles very applicable to the CFA designation. most large corporatiions have tresuary departments or financial planing and analysis (not my cup of tea) but its relevant.

[CFAbeatmeup]

@danv0330

^ i dissagree… equity analysts need to know everything about a companys capital structure including debt issuances. pensions are important as it relates to contingent liabilities for the companys that offer it…

corporate finance departments of companies in any industry are roles very applicable to the CFA designation. most large corporatiions have tresuary departments or financial planing and analysis (not my cup of tea) but its relevant.

Bingo. Matter of fact, the only group of people that seem to really care about the CFA in DC are FP&A people and, for some odd reason, REITS. It makes sense because they have to issue equity so much and constantly raise debt and take on new projects they want the best.

[PiratesSayARRR]

@fwang1014

In your way, it should be 193,955 passes at Level III vs 2,222,330 total administered exams ~ 8.7%

D’oh I used the “fail” column. And notably it becomes messy because the total exam tries includes retakers so the number is likely higher than the 9-10% calculated.

[SHoot85]

@CFAbeatmeup

Maybe I didn’t make my point well. Yes, virtually every company, public and private, needs an accountant. Why’s that? Because the federal government (in the U.S.) has mandated this. Additionally, they don’t need an accountant, they need accounting. Again, the government has required the person to perform this function must be a licensed CPA. And, respectfully, you’re wrong: Pretty much every company needs somebody in finance (whether it’s a pure investment role, a treasurer investing in low-risk checking and T-Bills, or a corporate finance guy finding the ROI on new projects). Thinking the CFA is only for portfolio managers (and only equity investing at that) is wrong. Matter of fact, I’d say L3 was more about Fixed Income investing than Equities.

I agree the CFA should not attempt to make its designation a license (as I said above), but my point was there are ways to make the Charter more valuable without paying more. My $0.02.

“Why” is not important regarding MY point. Comparing how many finance professionals to accountants is a poor comparison. One is in much more demand than the other. And no, a mom and pop’s business does NOT need a finance professional (ie. someone who’s gone through the CFA) to invest their excess funds. On the other hand that business does need someone quite educated in accounting.

About PMs, you’re putting words in my mouth. I used equities as an example. Obviously there were many sections covered in the curriculum (I just wrote the exam, remember?). I’m just saying many roles in the industry do NOT require extensive (a lot of times “any”) knowledge on many of the areas within the curriculum.

[CFAbeatmeup]

@SHoot85

@CFAbeatmeup

Maybe I didn’t make my point well. Yes, virtually every company, public and private, needs an accountant. Why’s that? Because the federal government (in the U.S.) has mandated this. Additionally, they don’t need an accountant, they need accounting. Again, the government has required the person to perform this function must be a licensed CPA. And, respectfully, you’re wrong: Pretty much every company needs somebody in finance (whether it’s a pure investment role, a treasurer investing in low-risk checking and T-Bills, or a corporate finance guy finding the ROI on new projects). Thinking the CFA is only for portfolio managers (and only equity investing at that) is wrong. Matter of fact, I’d say L3 was more about Fixed Income investing than Equities.

I agree the CFA should not attempt to make its designation a license (as I said above), but my point was there are ways to make the Charter more valuable without paying more. My $0.02.

“Why” is not important regarding MY point. Comparing how many finance professionals to accountants is a poor comparison. One is in much more demand than the other. And no, a mom and pop’s business does NOT need a finance professional (ie. someone who’s gone through the CFA) to invest their excess funds. On the other hand that business does need someone quite educated in accounting.

About PMs, you’re putting words in my mouth. I used equities as an example. Obviously there were many sections covered in the curriculum (I just wrote the exam, remember?). I’m just saying many roles in the industry do NOT require extensive (a lot of times “any”) knowledge on many of the areas within the curriculum.

Dude, I’m really not here to argue. So I’ll say my piece and leave it. The reason why one is in more demand than the other is the government has mandated it as so. Sarbanes Oxley was essentially a giveway to the accounting industry. In addition, most mom and pop businesses can use Quickbooks and file their taxes on TurboTax, so not sure if that’s your best example.

My point is one is needed (CPAs) because the federal government requires it. The demand is government mandated more than requested by companies. That was the totality of my point – you want to argue that it is and I totally agree, but I’m thinking next level as to why. And the reason why accounting is in higher demand than investing is the federal government requires extensive rules with accounting where anybody can invest for a company. If the federal government said tomorrow “all Treasury officers must be Charterholders,” then you can bet the 120,000 Charterholders would be in high demand. Again, I’m not saying the CFA should lobby for this (I do not), but I’m trying to impress on you why one has higher demand than the other.

I’m not putting words in your mouth, you literally said equities.I think the logical extention would be an equity manager would, well, invest in more than one position…or a portfolio of equities. I accept you only meant it as an example but please refrain from accusing me of putting words in your mouth when I respond to the words you write.

But I will agree with you that “many roles in the industry do NOT (because apparently angrily writing in all caps is cool now) require extensive knowledge on many of the areas wthin the curriculum.”

[SHoot85]

@CFAbeatmeup

Dude, I’m really not here to argue. So I’ll say my piece and leave it. The reason why one is in more demand than the other is the government has mandated it as so. Sarbanes Oxley was essentially a giveway to the accounting industry. In addition, most mom and pop businesses can use Quickbooks and file their taxes on TurboTax, so not sure if that’s your best example.

My point is one is needed (CPAs) because the federal government requires it. The demand is government mandated more than requested by companies. That was the totality of my point – you want to argue that it is and I totally agree, but I’m thinking next level as to why. And the reason why accounting is in higher demand than investing is the federal government requires extensive rules with accounting where anybody can invest for a company. If the federal government said tomorrow “all Treasury officers must be Charterholders,” then you can bet the 120,000 Charterholders would be in high demand. Again, I’m not saying the CFA should lobby for this (I do not), but I’m trying to impress on you why one has higher demand than the other.

I’m not putting words in your mouth, you literally said equities.I think the logical extention would be an equity manager would, well, invest in more than one position…or a portfolio of equities. I accept you only meant it as an example but please refrain from accusing me of putting words in your mouth when I respond to the words you write.

But I will agree with you that “many roles in the industry do NOT (because apparently angrily writing in all caps is cool now) require extensive knowledge on many of the areas wthin the curriculum.”

You’re not here to argue, just put words in other’s mouths?? Again, this is your words: “Thinking the CFA is only for portfolio managers (and only equity investing at that) is wrong”

Where on Earth did I say that? Or even insinuate that?

And you’re arguing to me about government mandates and Quickbooks, when my only point is that accountants, in a vacuum, are in much more demand than people needing professional insight into the capital markets. Period. Just like those mom and pop businesses can use Quickbooks, so can business/indivduals use financial advisors who push their company’s investment products, etc. Again, the point I was merely making is on the whole, an accountant is in more demand than a finance professional versed in derivatives, financial theory, fixed income, risk management strategies, etc etc etc. You going into you’re so called “next level” reasoning as to “why” seems to ignore the very why I’m discussing - that there is much more demand for an accountant than a finance professional (ie. maybeeee, that has something to do with it’s mandates).

[Apples_and_Oranges]

@CFAbeatmeup

@danv0330

@CFAbeatmeup

Here’s where I disagree with most CFA Candidates and Charterholders. I think the problem is too few Charterholders; not too many.

I agree with you … there are over 750,000 CPA just in the United States for reference. Where is the article about too many accountants?

Out of the 120,000 Charterholders, that includes many which are no longer working in the investment management profession at least on the corporate side… Also consider that not 120k Charterholders are actively looking for a job, so when a job posting goes up you are only competing against other Charteholders whom are actively looking for a job… In a big city that is still significant, but id bet that out of 120k charterholders, only a small percentage are “looking” for a job at any time… If you are hiring, your choices are limited to the resumes that show up on your desk.

In my opinion the CFA should be required for “portfolio management” roles and possible sell side research positions… If you dont have the mental capacity to pass the CFA exams, you probably should not be mananging other peoples money… anyone starting a career as a sell side analyst at any of the big investment banks is basically pushed into pursuing the CFA. Even people that (already) work at GS pursue the CFA because they know its becoming a requirement for going forward.

The only difference here is the CPA has convinced governments to use the designation as a license as well, which provides a barrier to work and will ensure they make above-average money. But as you said, there are 6 times more CPAs than CFAs in the US alone and they are still snapping CPAs up.

I’m not sure the CFA wants to go down a licensing path, but it would be good if they worked with other organizations so the CFA could be a sponsoring organization for people’s Series 7 and Series 66 licenses. Right now if you leave a firm you have two years to join a new one or you lose your license (as I did) or a reciprocity agreement where CFA charterholders earn their Series 7 licenses when they complete all three levels. If you’ve ever taken the Series 7, you know it’s about 75% as hard as Level 1.

These are just thoughts off of the top of my head, but I bet there are a lot of cool ways they can add value to the Charter with very little investment.

Not sure if this was mentioned already, but if you’re going for the series 86 and 87, which is the Research Analyst Examination, and passed Level 1 and 2 of the CFA program, you are “premitted to request an exemption from the Series 86 exam”.

And to take the Series 86 and 87 you need to have passed either the 7, 17, 37, or 38.

[CFAbeatmeup]

@Apples_and_Oranges

@CFAbeatmeup

@danv0330

@CFAbeatmeup

Here’s where I disagree with most CFA Candidates and Charterholders. I think the problem is too few Charterholders; not too many.

I agree with you … there are over 750,000 CPA just in the United States for reference. Where is the article about too many accountants?

Out of the 120,000 Charterholders, that includes many which are no longer working in the investment management profession at least on the corporate side… Also consider that not 120k Charterholders are actively looking for a job, so when a job posting goes up you are only competing against other Charteholders whom are actively looking for a job… In a big city that is still significant, but id bet that out of 120k charterholders, only a small percentage are “looking” for a job at any time… If you are hiring, your choices are limited to the resumes that show up on your desk.

In my opinion the CFA should be required for “portfolio management” roles and possible sell side research positions… If you dont have the mental capacity to pass the CFA exams, you probably should not be mananging other peoples money… anyone starting a career as a sell side analyst at any of the big investment banks is basically pushed into pursuing the CFA. Even people that (already) work at GS pursue the CFA because they know its becoming a requirement for going forward.

The only difference here is the CPA has convinced governments to use the designation as a license as well, which provides a barrier to work and will ensure they make above-average money. But as you said, there are 6 times more CPAs than CFAs in the US alone and they are still snapping CPAs up.

I’m not sure the CFA wants to go down a licensing path, but it would be good if they worked with other organizations so the CFA could be a sponsoring organization for people’s Series 7 and Series 66 licenses. Right now if you leave a firm you have two years to join a new one or you lose your license (as I did) or a reciprocity agreement where CFA charterholders earn their Series 7 licenses when they complete all three levels. If you’ve ever taken the Series 7, you know it’s about 75% as hard as Level 1.

These are just thoughts off of the top of my head, but I bet there are a lot of cool ways they can add value to the Charter with very little investment.

Not sure if this was mentioned already, but if you’re going for the series 86 and 87, which is the Research Analyst Examination, and passed Level 1 and 2 of the CFA program, you are “premitted to request an exemption from the Series 86 exam”.

And to take the Series 86 and 87 you need to have passed either the 7, 17, 37, or 38.

That’s cool. I also think if you’re going for the Actuary Exam, L1 and L2 help with some of the post-grad education credits.

[MarginCall]

IMO the CFA charter is a great ADD-ON qualification.

It is a great thing to add to the relevant career path.

However, I would not bank on it getting you the first relevant job, or even - should you have the relevant experience but are in need of a decent job - find another one in a situation suicidal to your career.

Add-on - yes. Nothing else.

[ChipM]

BB isn’t going to sell too many subscriptions to their high priced CFA prep course if they keep cranking out data like this!!

[Gersonides]

I think given the vast array of roles in the financial sector, the value of the CFA Charter is always going to be somewhat subjective and case by case, and cannot be defined by a journalist whose sample population consists of a few recruiters.

Personally, I work as an FA and retail PM for a major wirehouse brokerage firm. Fewer than 1% of the FAs in my region hold the CFA charter, and most of my clients (mass affluent market) probably do not know what the CFA charter is. However, when I started in my field, I recall reading an article that the ‘holy trinity’ of designations in the financial planning space consists of the CFP, CFA, and CPA. I have no accounting background, so the CPA is out for me.

I decided to pursue the CFA charter because mainly because it intrigued me as a challenge, and also because I came from a pretty modest background with a lousy education - 2 years at community college (because I was intially afraid to take a student loan) and then sevaral years finishing a BS degree in Mass Communications at a shitty little-known liberal arts school.

So if a client compares the flare on my wall to the guy in the next office who did his MBA at Wharton, I’m at a comparative disadvantage.

From that angle, I think the CFA charter is well worthwhile since I have neither the time nor desire to shell out tens of thousands of bones to cover the costs of busniess school.

Also, I will mention that initially, (after obtaing the requisite series 7, 66, and 31 for my role) I went after and earned the CFP certification.

Now I get to pay my $325 annual fee to the CFP Board each year and recieve the right to use the CFP marks and that’s about it. By comparsion, I have been much more impressed with the CFAI. I truly consider the CFAI to be a credible institution that seeks to uphold professionalism and academic integrity in finance.

I have seen some charterholders on here belittle the ultimate value of the CFA charter. But personally, much as I am sick of studying, I feel very proud of having passed L1 & L2, (hopefully will be able to say the same about L3 soon.)

[system]

Top MBA - Yes (Go for CFA) / No (Don’t)

Have experience in Investments management - Yes (Go for CFA) / No (Don’t)

Have solid connections in industry - Yes (Go for CFA) / No (Don’t)

Graduated from top university (Finance/Business/Accounting) - Yes (Go for CFA) / No (Don’t)

Coming from third world country with shitty experience - Yes (Don’t) / No (Go for CFA)

In torornto - Yes (Don’t) / No (Go for CFA)

I hope this helps.

[ltj]

Literally nothing you post is helpful in any way. Ever.

I hope that helps.