sailor Wrote: ------------------------------------------------------- > When it comes to getting into IB the MBA is more > important/recognized than the CFA and the primary > value from the program comes from the contacts > from the MBA. Given the skill set the author mentioned above, I totally agree with you that the MBA is perfect for IB career.
I agree to a certain point – like if you have a top 20 MBA. I’m at a boutique M&A IB, and planned to do a part-time program through a state school, but my employer talked me into doing the CFA instead. While the curriculum isn’t all necessarily relevant to M&A, a lot of it is useful in the valuation of companies.
the guy is right when talking about IB, but nobody here is looking at getting into IB (except the random guy who can’t write who pops on). The jobs I look at mostly specifically state “CFA preferred” if not required, so its hard to think the CFA is worthless…I like the idea of being qualified for positions I want. If his comments on networking were correct, future IBers should quit after High School and spend all that wasted time in college networking full-time…30 min interviews as he states, 4yrs in school…35,040hrs…so thats 70,080 contacts they could make instead of studying. Indeed you should be able to land a job if you know everyone in your suburb…otherwise this article is pretty useless although it shows bankers how they truly are which in my mind isnt a whole lot.
This is the part that I disagree with, specifically with regard to the HF part: “c. There’s almost no correlation between the CFA and what you actually do as an investment banking, private equity, or hedge fund Analyst / Associate.” The rest of the CFA section is pretty on point. The reason this statement is inaccurate is that the author is painting the HF industry with a very broad brush. CFA is respected and useful for some HFs and is utterly useless for others. PE and IB are much narrower disciplines and have a lot more in common. It’s like saying, “Mayo is terrible in pepsi, sprite and food”.
tvPM Wrote: ------------------------------------------------------- > > If his comments on networking were correct, future > IBers should quit after High School and spend all > that wasted time in college networking > full-time…30 min interviews as he states, 4yrs > in school…35,040hrs…so thats 70,080 contacts > they could make instead of studying. haha … One of his arguments against the CFA is that it takes too much time :). A University of Phoenix MBA probably takes less than 20 hours to complete, that’s less than 60 lost networking connections 
eureka, that’s a good point. That being said, along those very lines, I think the purpose of the article was to clarify exactly why the CFA is not all that relevant or value-add for PE/IB. It’s all predicated on the premise that time is money, and time is the most valuable asset that most people have – and not only is the author arguing that the CFA is at best tangentially relevant to what IB/PE folks do, but it’s also just not necessarily worth the time. Anyway, a lot of people think the CFA is value-add for IB because they have certain misconceptions about what IB entails…in a similar fashion as to how people may also have similar misconceptions about PE, HF, portfolio management, and so forth. king_kong, thanks for your response. I realize I sent you a bunch of questions so please take your time in responding. Like I mentioned earlier, if it’s easier to have a conversation about things as opposed to writing back, let me know and we can arrange a time to speak. Thanks a bunch.
eureka Wrote: ------------------------------------------------------- > This is the part that I disagree with, > specifically with regard to the HF part: > > “c. There’s almost no correlation between the CFA > and what you actually do as an investment banking, > private equity, or hedge fund Analyst / > Associate.” > > The rest of the CFA section is pretty on point. > The reason this statement is inaccurate is that > the author is painting the HF industry with a very > broad brush. CFA is respected and useful for some > HFs and is utterly useless for others. PE and IB > are much narrower disciplines and have a lot more > in common. It’s like saying, “Mayo is terrible in > pepsi, sprite and food”. Yes, I also agree with CFA section, except for Part 3, subsection Hedge Fund.
It also depends on the market. The author I beleive did his time in the west coast of a BB in the US mainly in M&A or sponsors. The CFA has little value there. While when I was in Calgary various VPs, told me they did their CFA when they were an analyst/associate in banking, because the CFA is very valued out there. Friends who work in corporate debt not M&A in Toronto all are encouraged to do the CFA, alot of the highers ups in corproate debt here have both MBA+CFA. While there is Private Equity shops in Toronto that only hire previous M&A bankers, and none of them have the CFA. When your doing 80+ hour weeks, studying for the CFA is a little overkill.
I work in IM and many of the jobs I am looking at all ask for an MBA or CFA, witht he CFA abit of a preference b/c of the initials after your name. You are unlikely to use every aspect of the CFA; part of it is the prestige of having successfully passed a difficult exam. It is the equiv. of the branding that goes with an MBA, discussed elsewhere on these forums. I view the CFA as being useful for IM/AM and trading funds in the Alternative/HF space. I would agree its a waste of time for IB; IB is more about networking than anything else. I have several cousins whoa re deep into it and thats all they care about; I am able to run circles around them when discussing finance. IB = Sales for those of you who do not know this; sales and networking exp is more useful than hard finance altho a general knowledge of finance is required.
What do you guys think about the sales and trading side of the IB and the relevance of the Cfa in this capacity?
CFA is useless for sales and trading, more a prestige thing than anything else. It does help somewhat for Equity Sales, but not a ton and certainly not enough to be worthwhile. If that is your goal you really would be better off spending your energy on networking, it will get you farther.
I may sound like an elitist swine here but let me tell you something… The author is spot on. Sorry guys. Everything begins at prep school->ivy league->country club->Goldman Its connections, connections, connections. Its the name of the place you got your degree and the name of the place where you summer Everything else is just talk PS. I do not belong to the elite but i understand how the game works.
memalos, I do understand your point of view. It’s who knows you that matters. But to be frank, even if you got tons of connection with 0 experience (plus, no academic pedigree to cover that experience), you still won’t go anywhere. So in short, CFA and networking isn’t a mutually exclusive ordeal. Why can’t we do both and get along?
I basically agree with the OP. But then an investment banker is more about getting revenue from companies for deals whereas CFA peeps want to understand companies in order to invest. They arent interested in asset management.
I think the knowledge gained from the CFA program would be somewhat helpful in an IB role, especially the corp fin and FSA material. But I do not think that having a CFA would make you more likely to be hired for an IB role. Very few of those guys have it. Also, if you have it, they’ll assume that you’d like to jump to the buyside as soon as possible. So it can actually be a negative, unless you spin it right. For getting into a HF, it really varies. Usually it depends on what the top guys at the fund have done, i.e. if they seem certification-heavy (CFAs, CPAs), then typically it will be helpful. For getting into PE, I think usually the CFA is pretty worthless. IB experience + MBA is the typical route. Or maybe CPA + MBA. For getting into a mutual fund, the CFA is usually pretty helpful. Lots of the big mutual funds practically require it.
Is CFA totally useless for IB? True. I worked 2 years as an IB Associate at a bulge bracket and can tell you nobody in IB cares about CFA. The good part: I was sick of doing pitch books, setting up conference calls, sending follow-up emails, etc etc and the CFA helped me a lot to transition to Asset Management, where I work now.
Minimum required 250 hours is bare minimum requirement for any level, you gotta put ton of time for practice and mock exams. I noticed many in the market either don’t know or pay attention to CFA since not many went through CFA curriculum. CFA institute needs to reach out more and more in the industry to sell the importance of the designation. What are they doing with surplus money we are paying through exam fees, books and membership dues ???
Hi Guys, I dont know why people take Investment Banking so narrowly, that they dont find CFA of any value for it. Investment banking has many divisions and Investment Analysis is one of them, for which CFA is any day helpful. Yes MBA +Cfa will certainly enhance the employability in Investment banking as a whole sector. For e.g Trading departments, Quant analysis, Economists and others.
shalabh singh Wrote: ------------------------------------------------------- > Hi Guys, > > I dont know why people take Investment Banking so > narrowly, that they dont find CFA of any value for > it. Investment banking has many divisions and > Investment Analysis is one of them, for which CFA > is any day helpful. Yes MBA +Cfa will certainly > enhance the employability in Investment banking as > a whole sector. For e.g Trading departments, Quant > analysis, Economists and others. No, when people say investment banking, they’re referring specifically to the transactional side of things, i.e. M&A, sponsors, product groups, and stuff like that. The other duties you mentioned are functions and departments at investment banks, but they’re not investment banking. The whole point is that some people want to be told how applicable the CFA is to getting a job in IB so that they can somehow justify the amount of time they’re putting into the program…but the truth is, it’s not. And rather than to delude anyone further, the author of the article wants to clarify any general misconceptions of how useful it is to do the CFA in order to get a job in banking.
javiers Wrote: ------------------------------------------------------- > > > The good part: I was sick of doing pitch books, > setting up conference calls, sending follow-up > emails, etc etc and the CFA helped me a lot to > transition to Asset Management, where I work now. Finally a post from someone on the inside. Thank you for your honesty. So in conclusion if you want to work in IB, all you need really a high-school diploma and someone to get you in. If you want to eventually manage money, the CFA will probably help.