i’m a portfolio manager, previous to that Front Office at a bulge bracket firm … I don’t mind it, I think they would hold two sessions a year for each level … as the opportunity cost is pretty sizeable.
See my thread on “Alphabet Soup”.
http://www.analystforum.com/forums/cfa-forums/cfa-general-discussion/91316915
Agree i dont go for FRM . I will prefer searching jobs and reading good books on equity research report, learn modelling etc … This may land me in a job.
Practical knowledge is more imp
Semantics, you raise some good questions, so I’ll take the bait and respond to the one concerning consulting. I work at a consulting firm and was recently promoted to consultant from an analyst position. A big portion of our workload, along with many other areas, revolves around filing expert witness testimony in regulated utility rate cases. A HUGE portion of a utility’s rate case is based on an allowed ROE that is set by a state’s regulatory commission. We perform multiple types of analyses to develop a range for a reasonable ROE, and typically recommend the mid-point. Most witnesses will perform two or three different DCF analyses, at least one variation of the CAPM, and maybe a bond yield plus equity risk premium study. The charter, in our instance, provides for immediate credibility in our testimony and on the witness stand when it comes to the finance/economics side of our work. We only have one charterholders in our firm, and I’m on the track to fill his position once he retires… that’s why I’m pursuing the charter.
Portfolio Managers
Buy/sell side research analysts
Traders wanting to become a PM.
/thread
unless you are in this line of work, or trying to get one of these jobs…you could be doing much more worthwhile activities than the CFA.
As my previous post suggests, there is more to finance, and the CFA charter than your limited view. There’s not another designation i could pursue that will more than double my salary upon completion at my firm.
Here’s a similar consulting firm to ours… http://www.sussex-advisors.com/team/
P.S. find the violation of the Code and Standards on the page from the provided link…
then your firm has an inefficient reward system.
No, quite the opposite, actually. I don’t expect you to understand, nor am I going to take the time to explain, how our position/compensation/incentives/bonuses are figured out. I’ll just put it this way… in the eyes of our industry, it’s much easier to be deemed an “expert witness” (which demands a lot more money than an analyst or base level consulting role) in the rate of return portion of our work after having earned the charter, than without the charter. There are many who choose to go the Ph.D route, and there are those of us who choose/chose to go the CFA route. The latter seemed more logical to me, given my circumstances, opportunity costs, etc…
Furthermore, our firm has been around for 70+ years. Management is comprised of certified Professional Engineers with MBA’s, those who have earned MS. Engineering, and a Ph.D. The firm has never had a single layoff. The firm has never NOT paid bonuses or profit sharing retirement plan bonuses (since being implemented). I think we’re plenty efficient in our “reward system.”
I was told by my korean friends that in ASIA (korea, japan, hk, singapore), formal education and shiny acronyms placed next to your name are the most important thing in the world, and you would rather spend time studying for the CFA rather than getting work experience (if somehow u were forced to choose between the two). So maybe CFA may be a must for people of certain regions looking to break into ER and PM.
I just want to stress the fact that people can break into the industry with no traditional finance background AND not in their early 20s.
I am so sick of everyone promoting “ya, get your MBA at 25 and you may have a shot in this”… “if you are in your 30s you are too old to switch fields”… “people can’t break into finance, you just can’t start from the bottom and work your way up”…
these are all BS. A LOT of people have specialized skills and knowledge and that’s why they got into the industry in the first place.
NANA
USED to be true, but not so much anymore.
The truth is, there are just SO many people competing for the same jobs.
let’s say in 15 years ago, there are only 5% of university students study business and finance, and because the media praise finance experts and everything thinks it’s a good industry to be in, now it’s 10% (this is an example). theoretically speaking the 5% isn’t a lot but the industry simply did not grow all that much in the last 10 years (if anything it probably shrunk), and the jobs out there definitely did not double.
So you have the classic credential inflation - too many certificates chasing too few jobs.
For the last 10 years, all the media talks about is greedy investment bankers making tons of money, people in finance making out like “fat cats” while the common person suffers, finance being paid huge bonuses…
But in the last 5 years, finance has been shrinking, govt regulations, scandals, insider trading.
So, tons more people trying to get in + shrinking field = disaster.
Not to mention, when economy is bad, people go back to school or stay in school longer and study more!
Only you are going to be able to answer whether its a waste of time for you. I think at a basic level I looked at the program as an opportunity to show I was interested in the industry and to force me to learn certain concepts that I would not have made the time for if I had not entered the program. I also believed it would make me a more intelligent investor. Anything else for me would be gravy. As stated at nausem in this thread and others, the CFA program is not the yellow brick road to financial or professional success. As I was recently told: “No one is going to pay you anything for what is in your head”. Passing these exams does not get you a voucher for a higher salary. However it could get someone’s attention and maybe that person will give you a chance to use your skills to provide real value for others. If you can find out how you can use the CFA program’s curriculum to bolster your competency so that you can become a huge asset to others it will be more likely that this isn’t a waste of your time. If you think by completing the program someone “owes you something”, maybe then you are wasting your time.
I like you quote “no one is going to pay you anything for what is in your head”, i think it’s very true, what you know is not as important as what you can do. Sometimes you only “use” 10% of your knowledge and you make millions, and other times you can know a lot and never get to use it and be broke.
At a small growing RIA with $100M. CFA and CFP are both good to have. Being young is a negative in a financial advisor role. Old people with a lot of money don’t want to give it to kids to manage. If you are at a big firm just do the analytics/research with no client interaction it is really a different job than juggling all the facets of the business. This is one of the more common roles that exist with tons of small asset managers all over the place that I rarely see mentioned here. Not everyone want to commute or live in NYC or Greenwich and work at a big asset manager, HF or bank. World is not as black and white as a lot of people would like to make it.
IMHO, there are several moving parts:
- Trade-off / opportunity cost:
If someone has strong learning abilities and is able to pass all 3 levels in 2 to 3 years without sacrificing too much, obviously it’s a lower barrier than for someone who needs 5-6 years and has three young kids. If this material comes to you easily and if you are single (or blessed with a very understanding spouse), then going for it makes a lot more sense.
- Immediate value:
If you work in a portfolio management, product management or client management capacity at a firm like BlackRock, GSAM, PIMCO, Invesco, Lazard or any other large institutional asset manager where the designation is valued and can either enhance your promotional path or help you network with likeminded peers — or where it may even be hinted that you should simply do it — then it kinda goes with the territory. It may not be a ‘must have’ (since you already work there), but it’s certainly a ‘nice to have’; it shows that you’re hungry and committed. And the firm generally pays for it, so why not.
Also applies to roles at consulting firms (Cambridge, HewittEnnis Knupp, etc) and more broadly to any role where your bosses, colleagues, and/or clients tend to be charterholders more often than not. Establishes an equal footing.
Probably quite valuable for someone starting a small RIA business, as JACT points out; there are other designations that are easier to get, but might as well go for the gold standard…
- Future value:
Potential career changes down the road, e.g. moving from IB to AM, or planning a move to manage assets at a pension plan or foundation, etc. May help broaden horizons for those with a specialized skill set, or validate on-the-job experience (the value of experience can be subjective;the CFA designation is a more objective/standardized measure).
In my case, for what it’s worth: I deemed the opportunity cost low enough to be acceptable, there are immediate benefits as my firm values the designation, it may have future benefits (who knows what I’ll want to do 5 or 10 years for now), and I’m a bit of a masochistic nerd so it all made perfect sense…
As many others have already stated, the value to someone who’s not already in finance are unclear to me — but it still seems better than doing nothing, especially if the person is already networking, interning, volunteering, etc.
Righteous Hacksaw -
If you want to get as specific as possible and as honest as possible, maybe start off with youself. This whole thread is is nothing but a transparent ploy for you to artificially rack up AF points and stroke your ego.
Like others have already called you on it, what is the point of you starting this discussion? If indeed in your esteeemed opinion 80% of candidates (or whatever number) have no business being in the program, then why don’t you say who should be in the program? What pedigree would you like CFA candidates to possess that they don’t?