I found some tidbits about this topic throughout the forum but wanted to get some more updated responses. I met with a guy who recently graduated from undergrad (currently a corp Financial Analyst) and wanted to network to mainly hear about my CFA experience and breaking into the investment industry. He seemed most interested in investment banking after discussing a number of different routes to take - largely because he mentioned banking many times, he loved modeling, and had high aspirations for climbing the ladder. He was interested in the CFA program and was looking for advice on if he should embark on the CFA path to help get into banking.
I basically said yes and no. Yes, because you’ll learn a plethora about everything in finance and the more knowledge the better for any finance career. Also, looking at his experience and undergrad, I thought the designation or a at least passing some exams would help boost the resume for a banking role. However, I really don’t know if they look at it as much of a plus or not. Thus, I said no because the CFA program is not a typical route for banking and I rarely see any charterholders in banking. I didn’t want to push him in either direction too hard so I said I’d get back to him with more input.
Thoughts on if the CFA is highly regarded in banking and if he should pursue the CFA mainly to get into banking?
If you want to get into IB dont bother with the CFA. He would be much better working in corp and getting into a top MBA program. He is basically unlikely to just get a job there with his corp experience as well so if he doesn’t go to business school he might as well kiss his hopes of working in IB goodbye. Its not like you can just sit there and say, “hey that sounds neat, id like to be an investment banker” and just get a job in one of the most competitive careers i nthe world.
No one I know in IB has even debated taking L1, let alone getting the charter. He should get an MBA from a top school, otherwise he should lower his sights.
Coming out of undergrad, many of the banks I spoke with did value the CFA, and being signed up for L1 was a bare minimum. That being said, these were midsize or smaller IBs and not the big houses out of NY. Targeting students wrapping up their undergrad for entry level positions is obviously also different than recruiting at the top MBA schools.
By the time you’ve completed your CFA, the window for breaking in to investment banking is pretty much closed. You’d have a better chance reopening it with a quality MBA program from a school that attracts IB recruiters.
It can help you learn a bit about how securities are valued, but something like a modeling course like Breaking In to Wall Street is probably more useful and quicker.
The CFA curriculum is designed for equity researchers and portfolio managers, not investment bankers. There is some overlap in the accounting and basic valuation methods, but each shop has their own approach, and - quite frankly - a lot of investment banking is about writing up a model that justifies the number that either the client or your boss wants you to come up with. That number probably was arrived at at the back of an envelope with a multiple and a rough approximation of cash flows while drinking and watching one of KMerriweather’s friends giggle her stuff at the client.
Depends where you are. In Toronto theres a large portion of bankers who either have their charter or are in progress. Some even used it to get into the business. While working 70 hr weeks studying in May is not fun, most of them attempt it anyway for bonuses, competition, and better exit opps.
In general though, I think it’s worthwhile if your undergrad was not stellar. It’s hard to get taken seriously now starting out these days.
Most of my friends in IB have taken the CFA, it’s a great thing to have if you want to move into research side of the business and also a great talking point during IB interviews but yea most people in IB don’t give a shit about cfa.
^ Its like the entry ticket now in Canada. Base qualification. Canadians are much more focused on credentials than Americans. Must be a British legacy thing.
The only credential you need for IB is a degree from a very specific list of schools. The topic of study is almost irrelevant compared with the provenance of the degree.
I must be an anomaly because the CFA curriculum helped me get an IB position. I’ll also STRONGLY DISAGREE that the CFA curriculum is irrelevant to bankers. Level I and II are highly applicable, especially the concepts from Level II; however, Level III there isn’t much relevance.