Why Pursue The CFA Designation? Is it Really Worth it?

Given the time, money and effort, is the CFA designation really worth pursuing?

As with many important questions in life, the frustrating answer is: it depends…

For some people, undertaking the CFA path is a no-brainer; the career opportunities unlocked by the designation is worth the trouble. In some cases, it may even be a prerequisite in pursuing their career path. These include securities analysts, asset managers and most individuals involved in capital markets. If you are committed to an “obvious” CFA-related career and want to improve your odds at landing a desirable position, the CFA path is most likely a good idea (especially if your firm covers the costs).

What if you dont fit the typical “analyst/portfolio manager/capital market wannabe” profile? Individuals not fitting the standard CFA Candidate profile include:

1. Those who have a finance background but are not fully committed to a career in that field

2. Those who are not sure about their career path and have heard that CFA is pretty good

3. Those who do not necessarily need a CFA designation for their career but considering it as a “back-up”

4. Those who attempted Level 1, failed, and are not sure anymore

5. Those who attempted Level 1, succeeded…but are not sure anymore

6. Those who are just looking for a challenge

7. Those who have an entrepreneurial spirit and are interested in finance but have no desire to work for a firm

8. Those who are suicidal

9. Those who are hardcore nerds who just cant get enough of studying

10. Those who are hunting for designation to add to their name just for the sake of having a baller business car

If you do fall in one of those listed above and you are on the fence with regards to the benefits and drawbacks of engaging in CFA combat, we have compiled a list of pros and cons you may want to consider before reaching a decision. Before that, maybe I can address some of the situations listed above. Keep in mind that this is just my opinion as someone who has been in many of the above situations and have seen many candidates go through this questioning process. The best advice I can give you is follow your heart… just joking: your heart will not help you on this one.

  • If you happen to be in situation 2, 3, 6 and 10: CFA is probably not for you
  • If you are in situation 1, 4, 5 and 7: CFA may be for you, keep reading this post
  • If you are in situation 8 and 9: CFA is a great idea!

 

The CFA Institute provides a picture heavy promotional brochure outlining information and explaining the marvels of the CFA designation. As mentioned, the program is mostly about investments so if you are not interested by that particular area of business, it will be very difficult for you to get through the program. Students considering a career in management or even corporate finance should probably not embark on the CFA train.

Here is a brief listing of some of the main  reasons to pursue a CFA designation and some argument for saying no thanks:

PROS

CONS

Salary bump (potentially even before program completion) Significant time commitment (over 250 hours per level)
Access to a community of CFA Charterholder Relatively costly (around $1,000) per level plus expensive third party educational material (which is almost necessary)
International recognition Opportunity cost (social life, salary…)
Understanding of broad body of knowledge (economics, statistics…) Narrow scope. Useless outside of the investments field
What does not kill you makes you stronger (but it will actively try to kill you though…) 48 months experience requirement before earning the charter
Personal challenge to test your own willpower Few  networking opportunities  while completing the program (as opposed to an MBA)
Bragging rights Most people outside of finance have no idea what the CFA is (while most know the MBA)
Likely paid by your firm if you work in the investments field You are on your own while studying
Difficulty of the program increases the prestige of those who passed Unless you are a genius, some of the theory is pretty hardcore
Flexibility: you can study while keeping your job The curriculum focuses on value investing which may not be very useful for everyone

 

Hopefully, this will help you reach the optimal decision for your career but ultimately pursuing the CFA program or not is a purely capital budgeting decision. Obtaining the title could be a great achievement for your career but you have to be ready to clear numerous hurdles… unlike the  gentleman in the video below:

[youtube height=”HEIGHT” width=”WIDTH”]http://www.youtube.com/watch?v=SxhdTu0HuIg[/youtube]

 

We also invite you to check out our latest CFA® Level 1 Starter Kit.

We created this CFA® Level 1 Starter Kit to help you better prepare for the upcoming CFA® exam.

CFA Level 1 - Starter Kit

We want to help you maximize your study efficiency and avoid the most common mistakes candidates make on the CFA ® Level 1 exam.

CFA ®Level 1 Starter Kit includes:

  • Top 100 Pitfalls (mistakes) to avoid on the CFA ® Level 1 exam (+50 pages PDF eBook)
  • Exam Strategies (9 pages PDF article)
  • Concentration Tips (9 page PDF article)
  • 3 study schedules : 16 weeks, 14 weeks and 10 weeks study plans (customizable in Excel)

By using the resources found in this Study Kit, you will be able to better focus on your studies knowing that you will have enough time to cover everything before the exam. You will also the learn the most frequent errors CFA® Level 1 Candidates make and how to avoid them on the exam day.