Posted: 1/9/2008 4:51:31 PM EDT
| Does anyone here have a CFA certification? I would like to get this next year during my senior year of college and would just like some input about it from those who have complete the exam. Did you pass on the first attempt at the test? About how many hours of study would you say is recommended to be able to pass this exam? |
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If you work full time during study, it will likely take you 3 years assuming you pass every test the first time. Pass rates under 50%. |
| I think that if I could pass this in my senior year it would definitely boost my chances at landing the job I'm looking for. Is the test really that hard that only 40% of people pass it? Or do a lot of people who aren't ready or qualified to take it take the test? |
I would bet the latter is true. |
I was on the CFA website and checked out the sample questions and since lvl 1 is strictly multiple choice the questions didn't seem that hard. I would have almost 10 months to study for it if I started now and took it this december a few months before graduation. |
granted, few 21 year olds sit for it, but really, you just have to study the material. if you happen to be doing portfolio management for a living or had related experience, sure, application helps, but you still have to undestand and calculate by hand what software does for you already. |
go for it. Level I is worth something on a resume... |
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I graduated recently with a double maj. in acct & fin. When I was doing the research for the CFA, I read in numerous places that it takes about 200-250 hours of intensive study time to pass each of the 3 parts of the exam. The bare minimum it takes to become certified or licensed is 3 years; at least that is what I read last. I do not know very much about CFA other than it is hardcore. I am also very interested in getting this thing knocked out. To answer your question about whether it is really that hard or are the people taking it just unprepared, well... from what I've heard, it is a major undertaking. The pass rates I last read about are less than 40-50% for each exam. The people that have the CFA, from my research, are the ones that do some serious number crunching. One of my classes had someone who had his CFA come in and speak about his job. He helped run a local mutual fund for a private investment group in my area. I also took a bus. valuation class last year where the two guys who wrote the book both had their CFAs -- the book was about taking a business and doing different forms of market analysis to derive various valuations of said business. I would contrast a CFAs job with a CFPs, which, in my small amount of knowledge, work more one-on-one with clients selling financial services or planning estates or investments. Again, I do not know very much about either but have had experience taking classes from professors with one or the other at times. I had a prof. a few years ago that had passed 2 levels of the CFA but did not get the 3rd and was content with providing investing services to her clients. The money is supposedly very good for the CFAs... I guess it's just like any other profession... CFP, CPA, JD, MD, Psychology, Engineering, whatever else inserted here. On a related note, the CFA that wrote my aforementioned text book also has a JD, and I've met a few people who have both MD/JD or JD/CPA/PHD. My point is you can always branch out to something else later once you get the CFA if you so desire. |
Over the past couple of years I've worked as an investment banker (Wall Street), trader (Wall Street), and most recently a corporate mergers & acquisitions guy at a Fortune 500 company. In addition, I also interviewed for an equity research position at a major bank, but turned that down since I felt that research was too "reactionary" instead of proactive. Bottom line is this (from my experience): In investment banking, sales/trading, and industry m&a, no one gives two flips about the CFA. It's great if you're interested in it for the knowledge, and it may give you a slight "edge" all things equal, but 1) no one is going to hire a CFA candidate over someone who has practical experience, and 2) you're not going to get any extra compensation because you're a charter-holder. The only two places where the CFA MAY matter are in equity/fixed income research and investment management. In the research group I interviewed at (think top 5 wall street firm), less than HALF the group consisted of charter-holders or people in the process of completing the levels. While the group told me that they would like me to pursue the CFA certification if I got hired, they by no means were emphatic in terms of only wanting to hire individuals with the charter. As far as investment management goes, many of my old colleagues in investment banking and trading have gone to major private equity and hedge funds. I no longer keep in touch with a lot of them, but I can guarantee you that none of them had completed or even begun any level of the CFA exam when hired. The ones I do still keep in touch with haven't pursued the exam either. At any rate, I'm not trying to discourage anyone from taking the exam, as I believe that knowledge for its own sake is a good thing, but just please be aware that you might spend a lot of time studying for very little gain from a practical perspective. The only friends I had who ended up taking the exam all worked in research, at it took each of them close to 200 hours of study (doing a couple of hours every night and on the weekends) to pass. Even after passing, their job prospects weren't all that greatly enhanced, and they're still in research making less money (although it's still good money) than the guys who went to private equity or the hedge funds. Finally, I also think that there's a 4-5 year work requirement to be awarded the charter. While you can start taking all the levels and finish them before that time, you won't actually be awarded the charter and you can't indicate that you are a charter holder until the work experience mark is up. Like I said earlier, not trying to discourage you, as I do believe that it shows a lot of dedication and discipline to take the CFA, but just keep in mind that it doesn't really help as much as you think it will on Wall Street. Edited to add two last points: 1) I believe that someone has done some research into the differences in return rates for funds managed by CFA charter-holders and non charter-holders. The results showed that there was really no difference between CFA and non-CFA charter-holders in terms of performance. I'll see if I can dig that up. 2) Rich: If Wall Street (or the sell-side) is your goal (as opposed to working for a buy-side shop like PIMCO or something), dealmaven.com, wallstreetprep.com, trainingthestreet.com, or analystexchange.com will serve your interests FAR better than CFA Level I. If your school is big enough, they might already be having one of those outfits offering sessions for free. |
JH81, Thanks for the input. Wall St. is my goal, specifically M&A, or S&T. I'll have to look into the programs you mentioned above. I understand the competitiveness of getting an internship and hopefully a job so I'm just looking at doing whatever I can to separate myself from my competitors. I had the opportunity to meet with a number of bank recruiters in NYC this week and would just like to qualify myself for my desired position the best I can. |
Rich, There's really no way to prepare yourself for S&T, but I can absolutely guarantee you that in M&A, more people who are in a position to hire will be more impressed by any of the programs I listed above than by someone who's completed CFA Level I. The reason I say this is because 95% of the content in the CFA exam has little to do with mergers & acquisitions. In fact, most of the content is absolutely useless in the field. A managing director/director/vp/associate would be far more impressed with someone who knew about things such as dcf valuation, comparables, financial modeling, and deal (purchase) accounting and who could talk about them intelligently in an interview setting. This is precisely what programs like the ones I listed above teach you how to do. In fact, I can tell you from first-hand experience that roughly half of the top banks use Training the Street to teach financial modeling to their first-year analysts/associates. While the programs I listed aren't necessarily cheap, consider them to be an investment in your future. I even believe that some of them will allow you to defer payment until you get your first banking job. At any rate, what I can tell you for certain is that if you complete any one of those programs and apply yourself 100%, you'll know 99% more than any other applicant who's competing against you--you'll literally be able to walk into interviews and have discussions about how work gets done and what matters to bankers. Additionally, I'd also recommend this book if you want to do more reading: http://www.scoopbooks.com/ourbooks_2.php The above book is the best book I've seen in the field, and actually walks you through (step-by-step) important banking concepts such as accretion/dilution, purchase accounting, stock versus debt/cash consideration, tax consequences of deals, etc. No other book comes close in terms of showing you the practical side of banking. In closing, if you really want to separate yourself from the pack, scrap the CFA and spend your time completing any one of the programs I listed above and going through the book I linked above. If you apply yourself and gain proficiency with both, you'll literally find yourself at a beginning 2nd year analyst level in terms of knowledge, which would place you far ahead of even a CFA charter-holder as far as M&A bankers are concerned. |
Thanks for the advice, I'll definitely have to check out that book. Any other advice for landing a summer internship? |
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as you have read, a CFA designation is more useful in some areas than others, but all other things roughly equal, you will never be held as lesser candidate vs. someone w/out it. At age 21, you're looking for a strong work experience to start, maybe some associate IB, employers know you don't have jack "experience", and all things about equal, having passed CFA level I is a total edge. If you're age 35, then it's a different story. If you don't have something "better" to do, then prepare for it and give it a shot. |
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I've passed all 3 levels of the CFA exam... no charter yet as I haven't completed the work experience requirement (my employment up until now doesn't qualify). Its value all depends on what you want to go into... it's really for people in research or investment management, anything else and I wouldn't bother. It's not designed for people in I-Banking or Sales & Trading and I echo what others have said about it not giving you a leg up in those areas (I've worked in both). At 21 years old I wouldn't be concerned with it... most people get it much later (after grad school). Not saying you couldn't if you wanted to, just that my feeling is that the designation is so specific that you probably don't know enough about where you want to end up at 21 to make it worth it. You might be different, I don't want to make assumptions about where you want to head in your career, but I know when I was 21 I had lots of ideas about where I'd end up and pretty much none of that is true 10 years later. All that said if you want to try it go for it. It's not cheap and it takes a lot of effort. I passed all 3 on the first try. I estimate I did about 150 hours of studying per level. Level 1 is the weed out level, after that you'll find out if its right for you and lots of the unqualified or less serious people will not go any further. If you have an advanced finance education it shouldn't be difficult (I found L1 quite similar to a 1st year MBA finance course). L2 and L3 get a little more specialized and would be difficult to pass without following the official CFA study program or a high quality 3rd party study program. I guess the best advice I can give is that if you decide to do it you must must must put in the time and effort or you're just wasting your $$$. Don't do it half-assed or you will have a miserable time with it and would be unlikely to finish. |
Yeah. There are generally two major contingents of people who land offers. 1) Individuals from "target" schools such as the Ivies, top notch privates (i.e. MIT, Duke, Northwestern, etc.), and top state schools (UVA, UNC, Cal, Michigan, etc.) who benefit from direct on-campus recruiting/resume-drops. 2) Individuals from non-target schools who do a bang-up job of networking like hell and taking advantage of things such as alumni relationships. In general, HR relationships are pretty meaningless, as the individual groups filter through the resume pools for summer and full-time analysts. All HR typically does is the scheduling and travel details for the resumes hand-picked by the individual groups. Because it's the groups who choose resumes, it would greatly benefit you to reach out to your alumni base regardless of whether case 1 or case 2 better describes your situation. Use your school's database to find out who's working where and either give those guys a call or shoot them an e-mail. Some will get back to you and some won't, but obviously, the more people you contact, the better shot you have that someone will help you out. In addition, there's also a balance between being persistent and being annoying, so make sure you have that figured out before you contact anyone. You'll often find that analysts will be in a better position to help you out than the more senior individuals for several reasons. First of all, a junior person will be more likely to give you the time of day, which will allow you to actually develop a substantive relationship. Secondly, the preliminary screening of resumes is typically delegated to analysts. Senior guys really only get involved when people are brought in to interview. Thus, if you buddy up with an analyst, there's a good chance he can slip your resume into the "interview" pile and push for you. Although I benefited from case 1 and didn't really have to try too hard to land my job (I was quite fortunate), I do remember several individuals with situations like case 2 either e-mailing me or calling me for "informational interviews." I did my best to get back to those individuals and I definitely pushed their resumes in cases where I got along with them and thought that they'd be good fits for my group or bank. Finally, the best piece of advice I can give you is this: don't ever get into the situation where you kid yourself and end up believing that banking is all that technical or difficult and that only the cream of the cream, smartest of the smart deserve to or can do the work. Although I realize that this somewhat contradicts some of the things I've said before, let me clarify by saying that while knowing how to do the job is important, being pleasant to work with is 100% more important. While knowing all the stuff I listed before would definitely give you a leg up over virtually 99% of all candidates and make my job easier by not having to teach you as much, there's no way in fucking hell I'd hire you if you're some obnoxious prick who thinks he knows it all--especially not when I'm going to have to spend 100 hours a week with you (more than I'd be spending with my real friends and family). The bottom line is that given enough time and the willingness to learn, ANYONE can become a proficient banker. However, NOT anyone can work 100 hours a week doing mundane monkey shit and keep a positive attitude with a smile on his face. Thus, the real "rockstars" in banking aren't the smartest or most technical kids; rather, they're typically the less intelligent people in the group who aren't smart enough to be completely bored and don't complain, bitch, or push back when it comes to work or staffing. Thus, if you want to get hired, make sure you come across as a good to work with guy and most importantly, a guy who doesn't care that he'll be up at 2am on a Saturday changing font from Times New Roman to Veranda because his MD hates the way Times New Roman looks. |