Hi all - new to this site. Thanks in advance for your feedback and perspectives.
About me:
I just got my first job in corporate strategy. I have no background in accounting or finance. None. I’m considering attempting the CFA level 1 in August, 2021. I am considering CFA level 1 because I want to pursue a career in strategy and general management. I do not plan to take levels 2 / 3. I do not plan on a career in portfolio management, nor do I want to be an equity analyst. I am hoping attempting CFA level 1 is a great way to acquire a base of financial knowledge that is sufficient for strategy and general management work.
My questions for the group are:
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I have no background in accounting or finance. None. I’ve never taken a single accounting or finance class. That said, is Kaplan Schweser going to be sufficient, presuming I put in the time? (300-350 hours of study) If it is likely not sufficient, what else would be typically required to pass?
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Is Kaplan Schweser considered the standard exam prep? I understand there are other options, but so far 3 people have pointed me to Kaplan.
Thanks again in advance
I’m going to be roasted for this, but if you are not planning on becoming a CFA and don’t need to take the exams to satisfy some educational requirement, then it is probably not worth it. The exams are $1,000 (well, about $500 if you register super-early) and they require substantial investment of your time (because there is too much material to go through). Just buy books instead.
CFA main strength is portfolio management (edit: and equities). While the exams cover other topics such as financial math, it does so at a very superficial level. Study notes in general also don’t do a very good job in teaching the material - they often give summaries with very little explanation of where a formula came from. Their objective is to make you pass the exams, not necessarily learn the material.
Many topics covered in the exam will be of little use to you, including ethics, probability, economics, derivatives (but again, except for ethics, these are covered at a very basic level). If you are considering level 1 because you think it will give you some credibility, then don’t. Nobody will bat an eye if you only passed level 1. Some would even argue the same if you only passed level 1 and 2.
You may be better off simply buying a book on finance and accounting. Accounting for dummies, for example, is $23 and may just provide a brief overview you need. As for management, you could get a book such as The First-Time Manager. It seems to provide a good guidance for new managers. I’m sure there are other excellent books on management.
I really appreciate the reply. As far as the exam content, my perspective is following, do you disagree?
Useful for my career in strategy or general management
Quantitative methods
Economics
Financial Reporting and Analysis
Corporate Finance
Might be useful for personal wealth planning
Equity Investments
Fixed Income
Alternative Investments
Portfolio Management and Wealth Planning
Probably not useful for me
Derivatives
Ethical and professional standards
Self-study vs. level 1 exam
If my only goal is to learn the content, I can probably buy some books and just learn. That said, while passing level 1 CFA might not hold much market value, I’m aiming for jobs in strategy, analytics and management and saying “I passed level 1 CFA” proves I know some basic financial concepts more than “I read a book.”
Cost
Regarding cost, my company will help pay for materials and the exam if I pass
Have you talked to your employer about this? Does your employer or someone in a similar role in the company recommend that you take the level 1 exam? Books do a far better job at teaching the material in my view. With CFA level 1, you will be spending a lot of time on material you may not need. Time better spent elsewhere imo. For the material relevant to your profession, you will only learn the bare basics. And i do mean the bare basics. Having said that, I’m not a CFA. Maybe someone with plenty of experience as a CFA such as @s2000magician has a different opinion on this.
Thanks for the reply. That’s a logical question.
My direct manager said ‘sure’ he would pay for it. He seemed lukewarm toward the idea. I don’t think he thinks it’s necessary. That said, my education isn’t just about my current job, but every job I may have moving forward.
A senior leader in finance has told me to pursue it, he has a CFA and found it to be extremely valuable. I’m not currently in finance, I’m in strategy.
If you are considering CFA because you might change jobs, that’s a different story.
If you want to move away from strategy and into finance (dealing equities, etc), then yes, it would be wise to take the level 1 exam. In this case, it would be advisable to take the other 2 exams as well and obtain your charter. If you are interested on working on the risk management side of finance, you should pursue FRM instead. Do note that the FRM is more heavily focused on the quantitative/derivatives/etc side than CFA.
If your career goals are management and strategy, pursuing an MBA is probably a better bet than the CFA.
Thanks. MBA isn’t really interesting to me right now. It’s too expensive and time intensive.
The question at hand is: CFA level 1 for the reasons I cited above, or Coursera courses to build my knowledge of those topics?