Is the CFA Worth It?
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- Äas pĆidĂĄn 11. 07. 2024
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The CFA is the most popular designation for financial professionals, but will it help further your career? The CFA is cheaper than an MBA, but still costs thousands of dollars and takes several hundred hours to complete. We'll also take a look at employment data to see what percentage of people at the top finance jobs have a CFA.
0:00 - Intro
1:51 - The Cost of the CFA
4:08 - The Value of the CFA
7:00 - Summary and Conclusion
Peak Frameworks is a business career prep service started by Matt Ting and Patrick Fong, who have each spent several years working in investment banking and private equity in New York and Silicon Valley. Matt and Patrick met at Evercore, a top tier investment bank, and over the years have tutored and coached dozens of candidates to land their dream business job.
Matt Ting: / matthewting
Patrick Fong (HBS 2021): / patrick-fong-0b773041
#InvestmentBanking #CFA #Careers
Matt, great video! I did want to kindly challenge you on the point you made about CFA covering topics in a broad but shallow manner though - I definitely felt that that the CFA curriculum is difficult not only for its breadth of material, but also for its depth. Having graduated from the same undergraduate business program as you, depth was certainly, in some respects, from our academic curriculum likely due to the fact that the program is only two years, but I have to respectfully disagree with you on that front regarding the CFA program. The level of detail/difficulty of the material is about as good as it can realistically be for a comprehensive finance designation like the CFA, otherwise, any more detail on each topic would certainly have diminishing returns in usefulness. In fact, I know many would argue that the CFA program needlessly expands on certain topics in more detail than is realistically necessary, and the Institute likely does this solely for the purpose of making the exam more difficult. Anyhow, I did feel my completion of the Charter allowed me to be more reasonably acquainted with nearly every topic in finance, from various derivatives strategies to portfolio management, which I think helps to make you a more well-rounded finance professional. Anyways, just my 0.02!
Great points and thank you for sharing your experience!
I think you both make good points. I'm starting my journey through the CFA since it's the more affordable route compared to an MBA. Erika if possible I'd like to connect and talk more about how obtaining the charter has helped you.
In the other hand, Matt thanks for another insightful video. I enjoy your content.
@@PeakFrameworks Hey Matt, great video as always. I also have heard that here in Canada majority of the finance ppl have CFA (mostly lvl1).
I'm a sophomore in a Canadian semi-target (possibly non-target). Do you think it will increase my chances of landing an IB internship in Toronto if I had CFA lvl1? Do you think it's worth it for a fellow Canadian seeking in Toronto? Would love to hear your thoughts on this :)
I kind of discuss this in the video, but no I don't think it'll help for IB internships that much. Prioritize joining student investment clubs / extra curriculars, getting good grades, and networking.
Agreed. Although, I appreciate the video, the point
about the curriculum lacking depth is not correct. You do get that criticism at level 1 but I donât think anyone who has completed it thinks level 2 or 3 lack depth. If anything, theyâre annoyingly specific and to Erikaâs point, it often feels needlessly so.
That said, the curriculum is really well done. All in all, great job with this channel - youâre creating access to information that is hard to come across unless youâre in the right finance circles.
Thanks for taking the time to make this video. It is helpful to illustrate the benefits and costs of a CFA. That said, I do have a very different view of the âknowledgeâ aspect. In fact, my experience was completely the opposite from what you describe. My top 10 MBA covered all functions in business (finance, ops, marketing, HR, etc) but it is impossible to expect that it would cover all of this at more than a very shallow level. Thus the objective of an MBA is not to become an expert at any single function, but rather to provide context on how all the business functions work in conjunction with each other. On the other hand, the CFA takes the finance function alone and drills down deep into each of its sub functions (accounting, investments, Quant/stats, corpfin, etc). And then it covers in great detail how all these work together.
The MBA and CFA thus serve very different purposes. They should not be considered interchangeable.
From my own experience, neither the MBA nor CFA âgot me jobsâ. But they made me a much more knowledgeable business and finance professional. And for that, they were both extremely valuable.
Was eagerly waiting for this video from you Matt. Thanks man. Appreciate your efforts.
Becoming a CFA charterholder is not a magic bullet to get a job or get promoted. Where it really helps is, especially if you're more junior, is giving a tremendous amount of self confidence when dealing with more senior colleagues and/or clients. If you have the three letters after your name, it really primes people to have a good first impression of you. One exception to the "not necessary" that's worth noting though is sell-side equity/credit research (which, in turn, is often a prerequesite for doing buy-side research) where major banks/brokers in the major markets will typically no longer promote junior associate research analysts to "full" analysts who can sign off a note until they have obtained the charter - again with some exceptions like people with highly specialised knowledge in life sciences.
Adding to the use cases: the CFA is seen as valuable within equity research and fundamental public equities investing roles (in the long only space). The content on this page is tailored to IB/PE/VC/Corp Dev/HF, and itâs understandable that for those career paths, the CFA isnât seen as valuable. However, if you take a cursory look at requirements for equity research or long-only, youâll notice that CFAs are listed as required at fairly high rates. Youâll notice a similar pattern if you look up equity research (buyside or sell side) professionals
Awesome and super informative video on the CFA designation!
People need to stop framing MBA/BA/CFA etc in the context of "increase probability of getting a job". The reality is that the knowledge you acquire in any program (or even studying yourself) can vary widely for different people, and is ultimately the only thing that matters. Certifications can potentially get you in the door, but I've found most employers quickly dismiss certifications or education as soon as they identify the depth of your knowledge and are able to clearly and concisely communicate what you know. A better investment is making your own website that is well-written and communicates that you are an expert in your field, through sharing your thoughts, not certifications. Speaking from a decade of experience in hedge funds/PE/IR/FinTech, but just my observation.
This is sound advice
i don't think that employers will give you a interview with only a couple ideas on a website
Doesnt hold for MBAs though. I feel like the primary value of an MBA is the network it provides (which in essence leads to better jobs).
@@abhaymalla77 Move to a big city and go to every business/tech related event on Eventbrite, many of which are also alumni events put on by top schools for hiring managers. I didn't go to a name brand school but I built a vast network within 2-3 years doing this. It just takes work, but it doesn't cost anything. That being said, I graduated at the top of my class in business school undergrad, so although not a name brand, I knew how to walk the walk and that is ultimately what matters when you meet successful people.
@@danielidz Pretty interesting, would you mind connecting over LinkedIn and discussing this further?
Thanks a million for your invaluable content.. it's just precious
At least in Colombia, the country where I live, CFA is equivalent to have a Master's degree, even better for certain jobs as portfolio management or equity research. Absolutely yes, here, CFA worth it, there is no more than 200 people with the designation.
Damn that's insane only 200 people in your country that has the title!
on level 3 and you are correct -have my CFP CMT CAIA..etc dont need it but want it......as type A. Nice job!
Very insightful, thank you!
Although I think you got the concept of CFA touching different topics correct, the perception is opposite from what you said based on my 7 years in finance. CFA is an inch wide and a mile deep while CPA is a mile wide and an inch deep. It can also depend on what youâre comparing it to, but thatâs the general consensus, at least in the corporate finance world. You learn a lot about finance and sounds more knowledgeable about derivatives and other aspects, but itâs mainly concentrated on portfolio management based on my experience working with other financial pros, some with CFAs. Iâm not familiar with your video contents, but I can guess a lot of it is geared towards IB which makes more sense to me for the video. Finance is an all encompassing field and everyone has their own idea of what a finance professional does so I think it comes down to what area of finance you want to be in. Iâve been in treasury, fp&a, structured finance, and accounting and Iâve seen all of them refer to themselves as finance
Great video! After watching your vid, it definitely seems more effective to spend those hours on a side hustle to improve my CV.
100% agree!
if you are NOT going to work in portfolio management, equity research and areas where CFA is needed, then it is not worth your time. But, if you are going to work in those areas, then absolutely, it is worth getting it. As simple as that.
Same argument goes for FRM, FSA, FCAS, CPA, etc. If you not going to work as an actuary, dont even bother taking the actuarial exams. They're too difficult to be taken on your "own" time. Most actuaries are given company study time at the firms they work at.
Now, going back to CFA, if you are sure you want to be a, say, portfolio manager, then it is no brainer, take the CFA, it is the gold standard in portfolio management. NOW, what if you dont have the CFA and you work in portfolio management? well, because CFA is becoming the de facto certification for portfolio managers, you will be under "peer pressure" and will be "asked" why do you NOT have the CFA? your peers will doubt your competency if you dont have it and the burden of proof is shifted to you. Bottom line, you better get the CFA if you want to work in portfolio management. get my point?
Great Video
I do not feel I have much to add over the other comments yet I shall do so all the same. From my work experience apart from education an MBA tends to count in a little in terms of actual soft and hard skills that the potential employee has. Yes a CFA Cantel a potential employer that you put in the time and embrace the suck that he or she may value depending on the industry but overall the value may be diminished. Sackett that many MBA schools teach ideas that were relevant at best in the 2000s. As the author of the video points out to a degree gaining experience, connections, soft and hard skills will see you far better. Should you find that you want more money why not simply use social media and the resources available two administer a side hustle or multiple hustles that you have far more control over.
I'm in like the sweet spot where a CFA might make sense as part of a long shot bid to get into a front office role. Right now I do manager selection at an investment consultant, and a fair number of peers and colleagues and counterparties have the CFA or CAIA. PE professionals rarely ever have it lol, its not worth, but if they do they usually were career switchers or are in Europe/Asia etc.
Agreed, can make sense if you're a career switcher and potentially if you work internationally.
excellent video
I work in legal consulting for EY and now I'm working in corporate actions for an banking operations and It firm. I'm based in Lugano and thinking about relocating to ZĂŒrich to try to break into IB or PE. Should I do the CFA or would I be better off saving a bit more and going for the MBA?
I am relatively young, 24, and considering to take a year off work to study CFA full time. would you recommend it or would you recommend keeping a job while studying. I reckon there will be enough time an I won't "waste" a year where I could have worked.
@1:15 is spot on. Im sitting L3 in february and I am currently helping other people through L1 and L2. I advise top students who are getting good internships against getting the CFA. I think the CFA program is a great educational program and CAN do a lot for your career, but it isnt right for everyone and I wouldnt recommend it for everyobe
If you land an internship, but the industry you land in doesnât align with your future goals, the CFA is a great way to gain exposure and recognition from employers for other sides of finance. I landed a Research Internship at an RIA, but I wanted to stay flexible and not pigeon hole myself to fund-of-funds type firms. Since passing CFA Level I, Iâve kept my net spread out and Iâve had interviews for asset management, venture, risk management, front and back office, etc. Maybe not the most streamlined path to success in a specific field or with a particular firm, but if you want to cast a wider net and keep your options open early in your career, the CFA is very helpful.
Hello, Matt, my view is mixed, I think cfa contribute more to my personal finance, although i only did cfa level 2. I happened to check finance stuff on CZcams and other sources and thats why I came across passive income. So to me, CFA is a bridge to many other things that are not directly connected. And about career, I am in a pe fund now, my boss did not have any big name certificate, plus my working experience, I would prefer to work with people with more experience if one with finance experience and one have cfa but no experience. Besides these, I spent too much time, which should be spent with my family and friends. Really a lot of time. Above is only my pespective, love your videos. Please keep make more good ones!
I love how people who have 0 knowledge of CFA have some opinion about CFA.
You mean people who have not taken test? I have 0 knowledge of Spanish language and almost 0 knowledge of medicine; 0 knowledge of film studies and 0 knowledge of Software Engineering. However, I can advise any average person of her or his potential employability prospects if she or he decides to study Spanish Language, Film Studies or chooses to go the Medicine School or take Computer Science instead. Moreover, I can advise this person on other things with 0 experience. For instance, Iâve lived 0 days in Afghanistan and 0 days in Switzerland, however I can tell you which country is safer and has higher standard of living. Iâve smoke 0 cigarettes and taken 0 drugs, yet I can advise you on which dependency is more dangerous to tobacco or to heroine. And I can go on and on with 0 experience down the list.
@@olegvoronov3685 Ironic is not it ? âŠ.. Your rant comes on a day the CFA Level II pass rate is at its historic low. Proud to be a CFA and an FRM Charterholder. Need I say more.
@@abhishekbal399 I am not ranting about anything. Whether it has the lowest or the highest passing rate is irrelevant to me as I work in another industry. First of Congratulations to you; it is really an achievement and I hope you utilize your knowledge. Second, I live in Alberta Canada, and I know three people who cleared 3 levels on the first try and are still unemployed several years after. I know people who work at the customer service centres after clearing two levels of the CFA and people who are underemployed with this designation.
Iâve just made an analogy that you can have 0 experience with many things, as I mentioned above and still advice people on them. You can not advice people on which country is safer Afghanistan or Switzerland without living in them? I can, just as I can advise you on which University is better Oxford or the University of East London without studying in them. So why can not people do it with the CFA? Whether you find it ironic or not, is really irrelevant. You did not provide any arguments to refute the statements mentioned above.
@UCqOC7L4AhBB0NHcktuNSepQ Canada is a beautiful country ⊠I would want to visit someday , god willing ! You are from Bret Hartâs state ⊠thatâs even better. Canada is my dream destination which may not happen to me. Love the country.
@@abhishekbal399 wow! Congrats! Has it helped you a lot ?
Hi Matt,
Do let us know how much FRM and CFA add to your profile. Do they help us stand out while going for a good global MBA program as well?
Thanks!
I would say not very much. I don't personally care about it, but it can be helpful if you don't have as much direct finance experience. It's more of a tiebreaker if you are compared to a very similar candidate, but it's not worth the work IMO.
Please make a video of CFA institute's ESG certification Course
Hi. Love your videos. Can you make a video about Fintech in US or Canada, and how big banks are adopting it?
Thanks Evan! And hm, probably not... maybe once they actually start adopting fin tech...
Few inaccuracies here. Students sit for the level 1, but can't sit for level 2 until they graduate, so it definitely isn't a cert for students. It is also very deep in many areas. Level 1 is more fundamentals, but it gets a lot deeper.
That's very helpful, thanks for the callout
I think the CFA is a great program if you are curious as a finance professional and want to deepened your knowledge, especially in area in which you don't work in.
I did CFA Foundations then swiftly cashed out
Big brain move
Kinda similar but also different. But have you heard of the CFA investment Foundations certification? If you have, would you recommend it?
I have never heard it, again maybe useful if you're a freshman or sophomore with no finance experience, but I don't think it'll move the needle too much.
Hey man, I would recommend it as something to do during a winter/summer break. The thing is, for me it didnât take long because I got it as a junior in college so a lot of the material I already knew through banking prep/class therefore all I had to do was take the exam. However if itâll take a long time to study for you I would suggest thinking about it more and considering the opportunity cost. Like he mentioned, as a freshman or sophomore I think it would be good if you donât have internships however internships and networking trump everything else
Hey! What do you think about the FMVA Certification?
It seems worse than the CFA to me. I don't know anyone with it in the industry.
You lost me at âI donât have CFA and I never tried studying for any of the examsâ
Homie talking about about a 1000 hours for 3 levels đđđđ
Currently doing ACCA also wanted to do CFA
Thank you for the concise info.
Something not covered: is there any value in the *information* learned during a CFA?
It's much harder to determine that answer, but I'm inclined to think that your time can be better used elsewhere. It seems to be a pretty academic curriculum.
@@PeakFrameworks thank you, can you give an example please?
(Sounds passive aggressive, but not, genuine question. Thanks!)
Joining a finance club, starting a finance blog, networking, building a Twitter following
@@PeakFrameworks Thanks for the advice (note: I'm writing here anonymously)
I am already a member of several finance clubs, and I supply research reports to 2x hedge-funds. I just wanna up my game a bit, make myself more employable. I feel that working within a fund would be valuable to my learning. Did you work in a fund yourself?
Most online "experts" are too busy giving info and not busy enough listening and learning. So I'm more eager to be behind the scenes in a fund.
Hi, I'm currently working at Comptroller and Auditor General of India as audit officer which audits all receipt and expenditure of the Govt. of India. What is carrier prospect for me if i done CFA. my age is 28, please guide me is it wise to go for CFA. If yes, what are future carrier prospect.
First time at the channel, so not sure your target audience. Some (hopefully) kind disagreementsâŠ
1. You said that you donât see the CFA as materially effecting your ability to get a job. I canât speak for other firms, but I can assure you that there are specific roles at my firm (in Canada) that will not hire you without a CFA. The number of roles in asset management that are specifying an advanced degree as a requirement is increasing, and the CFA is often a much more cost effective way than getting an MBA/MFin/MQuantFin. I couldnât disagree more with this point
2. Youâre right to say that the CFA first covers a wide range of topics and fundamentals at first. However, almost none of CFA L2 was covered in my finance undergrad. At my school (Laurier), the MFin program does not even cover all of the CFA curriculum. While it is not as in-depth as a MQuantFin, it is pretty deep by level 3.
3. Yes, the % of people at big firms with a CFA will be low. But if your goal is to be an analyst or PM, youâre not just looking to get hired by a firm for any role. Letâs take Wealth Management as an example. We have a lead PM who had a CFA, 3-5 Associates who deal with clients, 3-5 Administrative Associates, plus staff to run the branch, deal with technology, etc. So yes, small % of staff has CFAs but a disproportionate amount of revenue is paid to the lead PM.
I can't agree with this more (also a fellow Goldenhawk), my exam is tomorrow and I can't express how much fine detail the CFA is expecting of us.. wish me luck
Considering that the CFA chart holders earn on average 280454CAD per year in Canada, what are the chances of getting this type of salary once you have passed all three levels of the exam? Especially if you do not have any experience in financial industry?
I don't think it's necessarily fair because in Canada you're required to get your CFA for certain jobs (e.g. asset management). So it's people with already great jobs that get a CFA because of regulations, not because the CFA helps them get those jobs. I don't think you can get the CFA and expect to make $280k, that's definitely not going to happen just because of the designation.
Also that report is based on a survey conducted by the CFA, pretty much every other source I've found has a much lower number
can you please make a video about corporate banking there is a lot of people interested in this topic check WSO.
Hm maybe, I don't know much about the topic!
I live in Brazil, we don't have a good education or good jobs, the most of the people are very poor and just have money enough to live. i am poor, and a think, the CFA can open more doors than I ever dreamed.
What did you major in and how did you figure out your enjoyment to investing? I really enjoy the concepts behind investing and the behavior of the market. I am going to be picking a major soon and I am looking into finance. My desire obtain employment in private equity and learn more sufficient investing strategies.
I did business management / administration. I spent a lot of time on my school's investment club, which I'd highly encourage you to do. If there aren't established investment clubs at your school, then form one / join an intercollegiate one like Global Platinum Securities
@@PeakFrameworks Thank you for the advice I really appreciate your help as I determine a major.
Any thoughts on whether to stay 1 year or 2 years in IB before jumping to PE?
This is a good question, I'll make a video on this down the road. I like 2 years because you don't burn bridges and you get the training you need. 1 year if the opportunity is good though. 1 year direct to PE is rare though, more common in hedge funds. If you do 1 year to PE, it tends to be analyst position.
CFA vs. CAIA whatâs the better choice for an analyst working in private equity?
Neither are going to help you that much TBH, but I guess CFA is better.
Should i start studying for my cfa? I am a senior in hs about to graduate. I can study in the summer?
I think there are more valuable things you can do, like just focusing on learning valuation, angling for club positions, reading finance books and blogs, etc. CFA is a ton of work and if you start now, you'll probably spend a lot more time in college on it.
@@PeakFrameworks thank you for the reply. Where do you recommend learning valuation, modeling and etc?
You are just focusing toomuch on north america brother. You have to understand that no matter at what point in your finance career you are, you will not even get glanced at if you are from countries that are not NA , GB FRANCE BELGIUM ETC. This is the reality, which means that the cfa is the only universal key available to you if you are from other countries and have no history of contact with the ivy league boys. Salute
Yes, that's a fair point. My experience is entirely NA so I'm only talking about what I'm familiar with.
people from various countries like India, GB, China, and all over the world do apply and attend ivy league schools in the US tho⊠might as well say ignore NYC and London as references because people are from other countries despite those cities being the worldâs financial capitals. Itâs not the only option, but itâs still an option that exists no matter how unlikely
If you think that a CFA gives you less of an edge in investment management / finance than an MBA, I would like to understand the rationale behind that... I oftentimes see that CFA title is beneficial for position I look for, but I rarely see someone actively look for MBAs
Hello, and thanks for the video, i just need your advice on a situation i am in.. so I got into UWaterloo under BMATH/Financial Analysis and Risk Management program and plan to choose the CFA route, and upon graduation i would apparently have cleared CFA level 2. Is it worth it? Since i am an international student, my tuition is huge!
I don't know much about that program to be honest, so can't give you clear advice. Waterloo's math faculty is strong, but don't think Waterloo is that great for IB/PE overall. I know the Waterloo / Laurier math combined double degree is good. I don't think the CFA is that useful
Letâs put aside whether itâs worth to spend time on CFA. CFA includes almost all the topics in business, like accounting, finance, economic, math and so on..and these knowledge are so basic. thereâs no certificate like CFA covers that many topics in this world and the exam questions are easy if one understand the knowledge/theory. If one has to spend tons of time and energy to study it, that means this one doesnât even have the very basic knowledge thatâs required to be working professional in Finance. And knowledges go along with one in life long time. From knowledge perspective, itâs absolutely worth the investing. I feel like what learned are not all useful at the moment I learned it, but later on Iâm able to explain lots of phenomenon by linking it to the study material. Sometimes CFA is just to show oneâs working capability which cannot be more important during recruiting when oneâs profile is not comparatively competitive. In Finance, if CFA doesnât add value to career, what else other certificate adds value? If one consider whether to get a CFA that means he/she needs it. Someone who doesnât need it would never ask should I take it? Anyways, my comment may be bias too but hope to help someone in deciding.
I thought this was going be about the Cat Fanciers Association
Can I get fake CFA certification? If I could get one then is it possible for my employer/company to get to know that I am holding a fake one?
So where does the 180,000 people work??
It's also just a test score it doesn't even give you any authority. At least the CPA allows you to sign off on audits. The CFA really seems like a money-making operation
Certification businesses have great business models with very perverse incentives
I would say around $3000 to $4000if you don't fail exam
#cfasuicide is so real
CFA in Mexico?
Never worked in Mexico so I'm not sure.
Bro how the f can you talk about this without having tried or done the cfa?!
Well... you don't need to get herpes to know that it's not a good idea.
Pretty bad analogy for a smart guy
In my opinion, not worth it
dislikes are kids who took CFA level 1 lol
And likes may be skewed towards people who have tried and given up the CFA. This dose not mean the likes nor dislikes are less valid.
Convincing or justifying yourself not to get the CFA designation is just an indication of laziness and low calibre
Or opportunity cost!
It is also an indication that one is able to consider the value of there time and make decisions for themselves after careful thought.
Everything has an opportunity cost. Itâs balanced with a low financial cost. CFA is less expensive than a semester in most colleges and does not require one to be indebted
The energy better spent elsewhere
True. Lot of time wasted for investing
Depends on different peopleâs opportunity cost of time, and for most people the energy is NOT better spent elsewhere.
Good master's in finance better....CFA is outdated
Good masterâs in finance excluding the very top programs are not better on average.