Is the CFA useful? Does it help with getting a job in investment banking?

31/5/2012

by Girl Banker®

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In Sep-2006, as a second-year Goldman analyst one of my Associates text me to ‘show-off’ that he had just passed level 3 of the Chartered Financial Analyst program, CFA. I was kind of jealous! I knew it was a definite plus on his CV because I’d heard that it was extremely challenging.

I thought, ‘If he has the time to study for the CFA, I can make time too!’ It was September already but I still applied for the Dec-2006 Level 1 exam. I passed. I passed the next two levels in Jun-2007 and Jun-2008 respectively.

What is on the CFA curriculum?
There is a little bit of everything finance-related.

The beauty of Level 1 is that it is very broad, immensely interesting and really not that difficult. It was through Level 1 I developed an interest in derivatives. I started trying to move from IBD to the capital markets a few months after I completed the exam– the better working hours were also a huge lure for me.

Level 2 is generally accepted to be the hardest level. It was, for me, also the most boring. There is so much nitty gritty detail on accounting – not my favourite topic.

Level 3 is very focused towards asset/portfolio management. There is lots of in depth information about how to look at asset portfolios, how to choose between different asset classes and how to manage other people’s money.

HOW COULD THE CFA HELP YOU?

1. It will stand out on your résumé/CV
The CFA qualification is well regarded because its modules are highly relevant to different areas of banking and because CFA Institute only allows the best 35-45% to pass any sitting.

2. Your chances of getting invited to interviews may rise
Case in point: one of my colleagues did his first degree in Lebanon followed by a Master’s degree at a good UK university. When it came to looking for a job, he says he didn’t get a single response after sending out his résumé/CV so he decided to sign up for CFA Level 1. When he sent his résumé/CV out again he started getting interview invitations. He’s one of the best derivative salespeople I know so it just goes to show that banks can have trouble sifting through the many applications.

3. It may help you to decide where in an investment bank you would best fit
Some bankers think the CFA qualification looks a lot better if you did it whilst you were working rather than when you were in university or looking for a job; however, I would argue that it adds a lot of value to your résumé/CV no matter when you do it. It’s not easy.

4. Your chances of ever becoming unemployed (apparently) fall
Of the 100,000 current full CFA Charterholders globally (i.e. people who completed and passed CFA exams 1, 2 and 3) and according to the CFA Institute’s own figures only 4% of them are unemployed at any time. You can read a full piece on this on eFinancialCareers.

DO YOU HAVE TO TAKE A TAUGHT COURSE TO PASS THE CFA?

I didn’t and I still passed all 3 levels the first time. For me, paying someone to teach me would have been a big waste of dosh. When I am around other people I usually want to chat. For the same reason, I also didn’t join any study groups.

What was my strategy?
Time was limited. I didn’t read the CFA’s own materials, they’re too thick. I ordered self-study materials (five books, Audio CDs, QuickSheets and Practice exams) from Schweser. I studied properly on weekends (both days); during the week I listened to the audio CDs on my way into work. I was always too tired to do any revision after work.

I took exactly one week off prior to each exam. By this time, I had been through all the study material once. Each time, I created a schedule to ensure this was the case. So what did I do in this one week? Exam practice! One exam per day. As I went through the practice exams, the areas I needed to work on jumped out at me, so I re-read just these modules.

What about my social life?
What social life? I killed it. I went out to dinner like a couple of times per month. However, when the CFA was over ‘freedom’ felt so much sweeter. I wrote the last exam in Jun-2008 but even today, four years later, the idea of combining a full-time job with the CFA still gives me the hibby jibbies.

Who is Girl Banker® and how can she help you?

50 Comments

Girl Banker®

I created my investment banking blog in 2012 as soon as I resigned from i-banking & published my book, To Become An Investment Banker.

Initially published at girlbanker.com, all posts were later subsumed into my personal website under katsonga.com/GirlBanker.

With 7 years of front office i-banking experience from Goldman Sachs and HSBC, in both classic IBD (corporate finance) and Derivatives (DCM / FICC), the aim of GirlBanker.com was to make it as straight-forward as possible to get into a top tier investment bank.

I'm also a CFA survivor having passed all three levels on the first attempt within 18 months - the shortest time possible.

Yi Zhou

11/8/2016 11:32:17 am

I like the article. Actually, I am recently thinking about if it is necessary to take the CFA. After reading this article, I decided to thinkg about that more seriously..

Heather as "Girl Banker"

11/8/2016 11:32:39 am

Thanks Yi Zhou. Feel free to ask me more questions. You should also get a copy of my book To Become an Investment Banker to help you figure things out.

Good luck!

ChampDeVecteur

11/8/2016 11:33:28 am

Hi, I was also thinking of a CFA.
However, I am a (validation) quant, and I think it is more important for me to have some (scientiffic) papers published, in order to be able to show the technical skills and the research uptitude. ( This is more and more often required for quant mamt positions )

so, in lieu of doing CFA I will devote myself to heat kernel expansions and the programming language CUDA.

BR
-Champ de vecteur.

11/8/2016 11:33:50 am

I agree with that. Quants need to show a higher aptitude for mathematical concepts so you would be better served with such qualifications.

I wish you luck,
GB

Johnny Bravo

11/8/2016 11:36:15 am

2008 was a watershed moment for the CFA, something they've only just woken up to and reflected in their syllabus. Pre-2008, the CFA was the ultimate bauble on one's CV and there were countless articles on why the CFA was better than an Ivy MBA(!) and both recruiters and clients treated those cherished 3 letters with the respect they deserved.
During and after 2008, the CFA was seriously tarnished. I remember having one mega client dismissing one of our top analysts recommendations soley on the basis that he was a CFA charterholder and therefore had "one dimensional thinking out of touch with current market conditions". The worst part was the client was right as the calls turned out completely wrong and would have cost him a fortune.
I'm not attacking the CFA, it is the best training tool that we have at our disposal. It's tough as old boots and anyone who passes it has earned it. All hiring managers know this too. However, those who passed before the crisis have a distinct advantage as it's value was worth much more.
Well done btw for passing the whole thing in 2 years - that must have taken some serious commitment!

11/8/2016 11:37:50 am

Hi Johnny,

Thanks for the comment. What you say about CFA is kind of what I think about MBAs: it customizes your thinking and reduces your ability to think out of the box. That said, I think the impact of an MBA re. customizing one's thinking falls the more work and life experience you have.

Personally, I think people who have had proper business experience get the most out of an MBA because they've done all their own tinkering and the MBA just adds the benefit of what "the theorists" say.

For me, I don't think the CFA changed the way I think about things because I approached it as someone who just wants to learn some new stuff rather than to learn how to do stuff. I wasn't asked by my work to do it and I wasn't a portfolio manager/analyst.

I paid the dues and had the "CFA" at the end of my name for a couple of years because after all the work it seemed like I should but now I don't even bother putting CFA at the end of my name or paying the dues because I don't see the point. I guess that way I can avoid the kind of experiences the analyst you mention above had. If I think it will be beneficial to mention that I did it, I do - on a case by case basis.

Best,
GB

Sandeep

11/8/2016 11:38:17 am

Hi Girl Banker,

From tomorrow onwards, I am preparing myself for the Level I exam in December. This leaves me 6 months to prepare (1 month for review and exam prep). Do you think this is a good strategy, leaving this much time to prepare?

How many hours did you spend studying per week? How do you keep yourself motivated to study after coming home from work (9pm)?
Thanks!

11/8/2016 11:38:48 am

Hi Sandeep,

Given you have so much time to prepare, I would set up a time table to ensure you have been through all the learning material at least twice before you start doing practice questions or at least just the challenging modules. I think 1 month of exam prep is good if you are not taking time off work but you might get bored if you are. You can never have too much exam prep just make sure you write a schedule and stick to it.

I spent about 10-14 hours reading the material on Saturday and Sunday i.e. 5-7 hours on each of those days. It was usually closer to 5 hours. I like to study in 1.5-2hr batches with about 30mins to 1 hour of rest between each batch.

During the week, I never studied in the evening. I was working very long hours and usually wouldn't get home until 10.30-11pm at the earliest. On my way to work, however, I listened to CFA mp3 audios for about 30 mins 3/4 times per week. That means at the most, I did two hours of learning between Monday & Friday. It may sound like not very much but because I used to memorize a lot in high school, I got so used to it that nowadays I can absorb a large amount of material without doing as much work as I used to in high school.

Good luck!
GB

suman

11/8/2016 11:39:20 am

Hi,i am aspiring for cfa 1dec,2012, can you help me with materials.

11/8/2016 11:39:38 am

Schweser produce the best materials in my opinion, purchase from their website: http://www.schweser.com/cfa/

Good luck!
GB

GB Follower

11/8/2016 11:40:07 am

GB - your comments and information have been so helpful, I am trying to work out whether I really am intelligent enough for CFA. Some others reading this will automatically jump to the conclusion that because I am questioning this then I am not.

I have a cuple of friends doing MBA - one full time and one distance learning.

Any further comments or guidance will be greatly appreciated.

Thank you very much.

Ever thought about mentoring?

11/8/2016 11:40:27 am

Many thanks for your comment!

I question myself all the time. Only people that really care about doing well question themselves. I am sure even Obama had doubts before he embarked on his campaign to become president!

As you ask, I do coach people...some pro-bono! Check out girlbanker.com/coaching. My book, To Become an Investment Banker also has plenty of advice for you.

I am currently writing another blog comparing MBAs to CFAs so as long as you sign up to the newsletter you won't miss out on anything!

You can do the CFA.

Good luck,
GB

CareerAdvice

11/8/2016 11:41:00 am

The following, although published 5 years ago, remains pertinent to this topic:
CFA or MBA: Which is right for you?
http://news.efinancialcareers.com/us-en/6302/cfa-or-mba-which-is-right-for-you/
(Warning: The reader comments on that thread - 200-plus and still growing - are heavy on snark, and some are tinged with racism.)

And this:
Assessing the Value of the CFA Charter
http://news.efinancialcareers.com/us-en/832/assessing-the-value-of-the-cfa-charter/

Finally, in response to "Johnny Bravo" above who asserts the CFA's prestige was dented by the recent financial crisis: That does not ring true in the slightest. Certainly the respect and prestige accorded financial professionals and financial institutions (among the general public, presumably including private wealth clients) took a beating in the crisis -- a beating from which it has not fully recovered.

However, not only was this reputational damage not specific to the CFA brand -- if anything, the CFA brand's standing may actually have risen... certainly in comparison with other corners of finance. For 2 reasons:

1. The program's strong emphasis on ethics. And not at a vague "do-gooder" level, but in terms of incorporating concrete, often highly technical and even legal principles, case studies and requirements into each of the 3 CFA exam levels. One cannot earn a CFA charter without a detailed, highly concrete understanding of concepts like fiduciary duty, prudent investing, conflict of interest, disclosure requirements, and the like.

2. The CFA Institute's primary constituency and membership comes not from investment banks or broker/dealers, from the buy side (i.e., institutional investors). For the most part, investors are rightly seen as victims of the crisis, not perpetrators. Investors have a vested interest in honest accounting, full disclosure, sound financial institutions, liquid and transparent markets... and all those other good things that fell by the wayside during the crisis and the bubble that preceded it. Which is to say: Institutional investors and their advocate, the CFA Institute, are correctly viewed as a key part of the solution -- not (or at least, less) as a part of the problem.

11/8/2016 11:41:25 am

Thanks for that very thorough explanation of why the CFA still stands as a great qualification to have. I agree with your analysis.

I also think that the standing of the CFA has stayed largely unaffected by the crisis. I'm off to read the other blog eFC!

SeeWhy

11/8/2016 11:41:51 am

I(from NYC) have been unemployed for 18months now after graduation and have no had any opportunities offered to me. I would love to work in investments as numbers and charts definitely fascinate me.

Do you have any suggestions of websites where I can shoot out my resume to more hiring firms? I am desperate but I know I can contribute!

I registered for the CFA L1 exam this December and right now, almost complete with the Schweser Econ book. I feel that I have been getting more incorrect compared to what I had when I did ethics/quant. Any advice on this?

Also, do you have an e-mail where I can reach you should I have any questions? I hope you don't mind me bothering you because I really enjoy your read/post.

All in all, I will definitely share with you the good news when I pass L1 in Dec.

Thanks in advance!

11/8/2016 11:42:10 am

Thanks for the post.

My email is here: http://www.girlbanker.com/contact.html

You can get help applying here:
http://www.girlbanker.com/headhunters.html
http://www.girlbanker.com/banks.html

By all means please write to me. I would be very happy to hear about your progress. Please explore this site for other info that might help you.

Good luck!
GB

11/8/2016 11:42:36 am

p.s. the more questions you do, the better you get. If you feel you are not improving, re-read that material/topic again to understand it better. This is what works for me.

Good luck,
GB

11/8/2016 11:43:37 am

Thanks GB,

I will shoot questions your away when they come to mind! Thanks!

Frenchagain

11/8/2016 11:44:01 am

I am currently a VP working in a DCM origination team for a Tier 3 bank in London. Do you think that a CFA could add value to my CV or is it too late?

11/8/2016 11:44:41 am

I assume you want to do it to move to a bigger and better bank? I would say a CFA adds less value to a CV as you move up. In your case, it might only add value if you were looking to move into a new product area. Even then, it would be more for your personal benefit i.e. so that you don't have to look stupid by asking the Associates questions.

Best way to move: make sure you work on deals that expose you to MDs at tier 1 banks and get a foot in that way. I have seen this done several times and often it's the good schmoozers that get the job not the smartest person - perception is reality!

Good luck!
GB

11/8/2016 11:45:09 am

Hi GB !

Thank you for sharing your experience. I intend to register for 06/2013 L1 exam.

11/8/2016 11:45:29 am

Good luck!

MESA

11/8/2016 11:45:49 am

Dear,

I like your article, but I am wondering if it's write fro me to get CFA. I hold MBA in banking and finance from UK and working in Saudi Arabia as RM in Corporate Banking (2 years), but at the same time I am interst into investment banking. Do you think its to late to change my path?

Regards

11/8/2016 11:46:08 am

With an MBA you should be able to apply for jobs in investment banking. Of course the CFA would look good on your CV but it's not going to get you the job of its own accord. Employers look at the total person, previous achievements etc. Importantly, how old are you?

Thanks
GB

11/8/2016 11:46:41 am

Dear,
Thank you for your response, I am 29 and my plan to stay 3 yeras more in corporte banking to get more experince (at the same time try to get CFA) and ater that apply for investment banking. So what you think?

Many Thanks,

11/8/2016 11:47:00 am

Dear,

Thank you for this blog, i found a lot of key information related to the CFA thanks to your experience. i am planning to start learning for the CFA in the coming months in order to take the exam on December 2013. Do you think that one year of study is too much for one level? Personally i was planning to do one hour each day for a total of 7 to 8 hours per week beside my work. Do you think it could be enough?

Relatively to the package that you take to learn was is the Essential Study Package or Essential Study Package? I don't really no which one of all those packages to buy.

I started working in a Bank few months ago as a financial analyst (full time) and i am really motivated to do this certification. Do you think it can add value to my professional profile as i am a starter?

Many thanks for your response :)

Regards,

Ibrahim

11/8/2016 11:47:26 am

I have recently graduated from an average university with a lower class degree in economics due to various reasons and have since been working for a small time brokerage firm for 6 months. I also recently turned 25 and therefore haven't done very well in my life thus far but what I do have is a lot of motivation and ambition to dare dream of making a success of myself either as an analyst or within Investment Banking.

I have been working on a range of skills from home and am considering registering for the june CFA and have some questions I would like you to kindly look at:

A) what branch of maths does it involve and How intensive is it?

B) with the right effort is the CFA something that can be done by someone like me?

C) am I making the right steps or would a different path be best for me to get an interview or work my way up...such as another course, degree or masters at an average university?

any advice would be of great help.

Thank you very much,

Ibrahim

11/8/2016 11:47:47 am

Thanks for asking.

1. I guess there is some algebra and you would be provided all the formulae you need to learn. A calculator is allowed during the exam too.

2. I believe anyone can do anything provided they have the passion. I never tell anyone they cannot because I don't have the right to tell a person what their limits are.

3. Even with a masters degree you might not get in. There isn't a guarantee. Importantly, masters degrees aren't something IBanks care much about. They want undergrad and MBAs. For very technical roles e.g. quants a pHD is appreciated. Overall, there isn't a sure fire way of getting into banking but the CFA will definitely help you especially for asset management. Asset management can lead you iBanking.

I recommend a copy of my book, To Become an Investment Banker to improve your knowledge.

Best
Heather

sheharyar niaz

11/8/2016 11:48:36 am

hi.....i have done with ACCA(associate chartered certified accountant) and an hounarary degree of bsc(hons) in accounting and finance from an averege uk university.....i am 24 right now and wanted to start with CFA is it an option to pursue or should i do something else ..... i am a pakistan based student abd can move abroad for studies and careers....i have no experience

Rosario

11/8/2016 11:49:00 am

Dear,
I read your article because I'm trying to get as more information as possible about CFA in order to prepare the level1 for june 2012.
I've always been interested in portfolio management and I know that this certificate could be really useful to finding opportunities in this sector. Actually, I want to show you my situation, so that maybe you can give me proper advice: I'm 26, I graduated in July in Italy and I decided to move to London in September in order to look for more opportunities but nowadays I'm still not working in financial sector. I'm a really motivated, hardworking person and I know that this is the job i want for my life (and I'll do everything to reach it). My worries are only about my age: I mean, having no previous experience , do you think it would be more useful to start working as soon as possible or trying to have more chances for interviews, by achieving CFA?

Thank you in advance,
Regards.
Rosario

Avinav

11/8/2016 11:49:23 am

guys i am done with grad'n in commerce and was keen to start off frm and cfa. but,after i heard some tragedies of some of my frnz who cud not make it at L-2 of cfa, i decided to do masters in mathematics and then proceed for cfa .plz suggest me if i have taken r8 decision!!

Nirupama Aiyer

11/8/2016 11:49:43 am

hello,
i will be registering for the Level! exam in december. i also want to pursue a masters degree from USA after i graduate in june. so, is a masters degree really helpful ?i am from India. can you suggest how to get into the risk assessement field. ?

fred

11/8/2016 11:50:07 am

Hi, I have good basics in economics but not enough to manage a portfolio. Do you think that the cfa qualification can be sufficient to invest assets seriuosly? If not, what would suggest?

Kunal

11/8/2016 11:50:24 am

I am B.TECH (Elect & Comm) and MBA(Core finance)....I am really good in finance..and confidend in clearing CFA levels atleast 1 very eaisily...I joined in Thomson Reuters as a Financial Planning and analysis profile..Now, just wanted to know Do the CFA will add value..As the profile seems to be not matching with the core finance jobs like M&A, Inv.Banking, equity/Fixed Income research...I am higly interested in those carrier..So help me...

Amit Kanabar

11/8/2016 11:50:51 am

Hi,

I have done my MBA (Finance) and have started my professional career. I was planning to do CFA. Do u think it will help me in future given the fact that i already have MBA degree ? I really wish to be an investment banker but given economical conditions and lacklusture Job market, the niche job i mentioned is not available. Is it possible that after passing CFA Level-2 i will have better chances at my dream profile ??
Do reply...!!!

nitin

11/8/2016 11:51:13 am

Hi, I wanna knw whether cfa is tougher than ca?

Gilberto

11/8/2016 11:51:34 am

Hi, I am currently doing a PhD in particle Physics at Durham University and I hold a master on Applied Mathematics by the University of Cambridge. However, I have realized recently That I would like to try something different after finishing the PhD, so somehow I have become interested in finance, at the moment I do not have any knowledge about but I think my mathematical foundations will make the things easier. The CFA test seems to be very attractive for different reasons. Roughly speaking what sort of mathematics do you require in level 1?.

All the best
Gilberto

Haris Mehmood

11/8/2016 11:51:58 am

Hi there, you are doing an excellent work. Your blog was really helpful. I am a graduate from Portsmouth Uni with 2:1 in telecoms and since worked in Sony for 2 years and have now been working for Barclays Retail as a personal banker. I have got admission in Bath Uni for MBA starting sep. im v confused about my job prospects after Mba and thus have already started consider CFA only because of my experience has been in sales and not a graduate level because of visa's family life etc. all the prospective employers ask abt what have you done rater can you learn ? Please help. This thought bring my confidence to ground.

Sean Chen

11/8/2016 11:52:22 am

Hello Girl Banker,

It was a very great read!
I majored in Political Science and Communication in undergrad but now really want to become a Financial Banker. I have previously applied to several jobs in the field but never got a response back and I am guessing it is because I do not have a business academic background. I am just wondering if studying for the CFA as an attempt to get into the industry is a good idea. Please advise. Thank you so very much!

sunny

11/8/2016 11:52:42 am

hey!
i am planning to give cfa level 1...so can i look for a cfa-related job once i'm done with the first level...??

11/8/2016 11:53:07 am

hey!
i've justfinished my 12th standard...can i start preparing for cfa level 1,2,and 3.....i knw i cant give the exam before my bachelors degree...but still ...will i be able to understand the content of the subject??

Edwin

11/8/2016 11:53:25 am

I found this article extremely useful. I have been thinking about taking CFA level 1 for some time now, and being at the back end of my degree course I believe I am ready. You have given me that much needed nudge to booking my exam.

Thanks alot!

Pooja

11/8/2016 11:53:45 am

Hi,
I am a Chartered Accountant from India and working in an Oil And Gas Company at a descent post for 5 years. I am planning to do CFA. Do you think it can add value and I could get better job opportunities in different areas/profiles with other reputed companies?

Ketan Jain`

11/8/2016 11:54:06 am

Hi
I m in b.com first year i want to be an investment banker.Please guide me i m really confuse. I had listen that CFA is very much difficult my colleagues told me that if i will do CA or CS first then it will be easier to qualify CFA. Please guide me i really want to be an INVESTMENT BANKER.
Waiting for your reply

Thanks

Jordan

11/8/2016 11:54:30 am

Great article thank you. I am an investment analyst for a private equity real estate fund in London. I am looking to further my career within real estate and progress into senior maybe even executive level positions within the real estate industry. Would the CFA be suitable for my career goals?

Sudarshana

11/8/2016 11:54:53 am

hello girlbanker
i have recently given my 12th standard exams and i am planning to do CFA . I want to know is it the right time to start preparing for the exam and will i be able to understand the topics and related content?

Mike

11/8/2016 11:55:10 am

I would like to add another question to your answer. I am already fully employed and will be reaching into my 40's soon. Would you recommend taking this test to a person of my age? Or do you consider my age to be too old. It is my understanding that Investment banking is a young man's game, with early retirement common practice.

11/8/2016 11:55:28 am

I don't like being negative but yes, you would not be considered for junior roles and the CFA would not change that. Sorry!

If you are coming with a portfolio of potential clients then you would be considered for more senior roles.

Heather

Shiney Fotedar

11/8/2016 11:55:57 am

This article was really helpful...m planning to buy the book.
Would a Phd in Accounting (Finance/Economics Stream) qualify as necessary work ex to obtain the charter?

Thanks!!

Carlos Esteban

11/8/2016 11:56:22 am

Dear GB,

Waht an amazing blog. First and foremost,
sorry to trouble you but I need advice. I am 28 years old, I have a Bachelor Degree in Political Science and Administration and a Diploma Degree in Management and Public Administration. I love studying and I have been thinking about developing further my skills and knowledge. KNOWLEDGE IS POWER...Well ,I have four years of experience in retail banking but I feel as though this is not what I want to do in life... I am very interested in Investment and Finance. I am aware of my studies does not correlate with my career goal. I would like you to advice me what to do. I would appreciate a lot your help.
Looking forward to hearing from you shortly. Thanks!!

Regards,

On Investment Banking