The CFA Program

[whatstheofficerproblem]

So, I spent $1640 to register for the CFA L1 Feb 2025 exam. This is before my graduation date, so I reckon passing the L1 before graduation is a plus point and looks good on my resume? Either way that's not what I care about. Over the last 2 years and in my being around several CFA charter holders, I was instilled the 'value' of the CFA. I've looked into the L1 course material, pretty basic stuff, it's a mile wide but an inch deep. The only thing I needed to learn outside my knowledge in foundational finance is how to plug numbers into a fancy calculator (excel is better).

 

I liked the course material, a lot of things I knew but a lot of things I didn't know. I would say the curriculum has done a good job in contextualizing the knowledge I had and gained, which I think is pretty powerful as I am not a Finance major and most of my Finance knowledge is something I learned myself and of course, some of it to be attributed to my 'mentors' in this forum, your conversations have been gold dust to me.

 

I'm curious if anyone on the forum is a charterholder or is working towards one. What are your thoughts on the program? I've had conversations with a lot of industry professionals, some speak very highly of it while some say it's an outright scam. They seem to be raising prices every year which for a 'non-profit' is very suspect, and the exams seem to be made deliberately tough so that a lot of folks have to fail and then take it again which flows right into the CFA society's topline. Others have told me I'd much rather spend my time studying for the GMAT and get placed into a good MBA program, which I don't think is possible because as an Asian, I am apparently 'white-adjacent' so this along with the legacy applicants and the experienced ones diminish my chances of getting into a good program.

 

I plan on doing the MBA after I've gained at least 5 years of experience in the industry, so it's a long way from here. But in the meantime I would like to know the members thoughts and opinions on the program and any helpful tips and insights that will be of use when I sit for the L1. I know that the CFA doesn't make you a better investor, I thankfully have this forum for that, but it does seem to open a lot of doors.

[billybobjovialdechicoutimi]

I can only discourage you to proceed.

 

I passed all three exams each in the first shot, was a CFA charterholder for about 4 years, and then I stopped paying my dues, and I gradually understood that the designation is really a scam, happy to develop on why I hold this strong belief

[TwoCitiesCapital]

31 minutes ago, whatstheofficerproblem said:

 

I'm curious if anyone on the forum is a charterholder or is working towards one. What are your thoughts on the program?

 

 

I've had conversations with a lot of industry professionals, some speak very highly of it while some say it's an outright scam. They seem to be raising prices every year which for a 'non-profit' is very suspect, and the exams seem to be made deliberately tough so that a lot of folks have to fail and then take it again which flows right into the CFA society's topline. Others have told me I'd much rather spend my time studying for the GMAT and get placed into a good MBA program, which I don't think is possible because as an Asian, I am apparently 'white-adjacent' so this along with the legacy applicants and the experienced ones diminish my chances of getting into a good program.

 

I have had the CFA charter for nearly a decade at this point and nearly ~15 years involved with the program if you consider the studying and time up to the requisite work experience. 

 

Professionally, it was a no brainer. I went to school in Mississippi and then moved to NYC. I'm 100% certain the only reason anyone even looked at me was having passed the 1st level. As a matter of fact, I didn't get a single call back for interviews UNTIL a few days after adding it to my resume when I got the results. 

 

If you don't go to a target school, CFA is probably one of the few ways to get noticed and distinguish yourself. That being said, none of the roles I had in NYC required it and I was often the only one with it. Nobody really  cares about it beyond it getting my foot in the door. It was just something to give me pedigree that was lacking in my school choice. The MBA from a top school was the be-all end-all when I was in NYC ~7-10 years ago. 

 

Where I'm at now in the Midwest, nobody really cares about MBAs. The CFA is everything and several roles require it or progress towards it. 

 

Outside of introductions to more esoteric products like derivatives/futures/interest rates theories and etc, I don't think it's helped a ton in my personal money management. But professionally it was worthwhile and has given me opportunities and wages I wouldn't have otherwise been eligible for. 

 

I also enjoy the events put on my by my local society, it's been great for networking, and my employer pays my dues. So its really great from my perspective. 

Edited November 2 by TwoCitiesCapital

[billybobjovialdechicoutimi]

Why I believe the CFA is a scam

 

1- Ethics

 

The curriculum won't make anyone who is un-ethical, suddenly ethical, but that's what it naively proposes.

Many of the 'cures' for discovery of unethical behavior at your employers are blind to reality: it recommends resigning, well here is the thing, in most of the world's job markets, and I believe even in large liquid ones like NYC or London, etc. , you simply cannot find a job fast enough to 'resign' your current one, furthermore, your ex-employer will not care that you were CFA or not, they will make it their life mission to destroy your chances of getting any other employment in the field, since it's essentially your word of them being 'unethical' against theirs, and the CFA will not intervene at all to adjudicate, etc.

 

 

2- Employment, Salary, etc.

 

When I got the CFA charter, after passing the 3rd test, I got a handshake from my employer, and a few smiles, but that's it, no raise or anything like that, not even a change in title, just the three letters next to my name for them to brag to current/future clients.

 

What the CFA stats on salary will not show you, is the many ex-charterholders who decided to stop paying their dues, because they are insanely high and can only be defended if one remains in the industry. The stat is massaged therefore higher therefore simply by cutting the denominator to the lowest possible.

 

 

3- Curriculum itself

 

I was a Buffett devotee before 'learning' the material for the different tests. I cannot say exactly how much, but I wouldn't be surprised if at least half of the CFA material simply goes against all the teachings of the value school, of Buffett, Munger, et al. In my view, Benjamin Graham who pushed for the designation in the first place, himself would be shocked by what is taught as CFA gospel, and fyi, I 'un-learned' everything the curriculum advised, and thank god I did because if I hadn't, I'd be living under a bridge somewhere panhandling.

 

 

 

BOTTOM LINE: Its a waste of time and money, and worse, to those who feel somehow comforted by the fact that their financial advisor is a CFA charterholder, well, I guess if you are naive enough to believe that ethics and honesty can be taught via a test, then you probably deserve whatever Hell you may eventually endure, at least in terms of underperformance. 

[SharperDingaan]

It's a union card, the same as an MBA. Different markets will value the letters differently, but if you don't have them .... don't bother applying.

 

When the employer pays the dues, you don't much care. To the employer it's a marketing and insurance cost, get caught doing something unethical; it minimizes the severance cost.

 

Value is different for everyone. If you know little about investment it's worth considering. If you're doing an MBA later, you will just be swapping your finance course for an elective. 

 

The CFA Way is just the starting point; you're expected to evolve your approach as you build your experience.

 

It's also an ego thing. In the early years, gross pay divided by work plus study time is often less than minimum wage. That freshly minted CFA also has the identical skill set, and is now available at cents on the dollar when the holders live in different countries. The supposedly smartest guy in the room ... that is dumb as a brick in a globalized world.

 

Been there, done that, long since moved on. Just a different POV.

 

SD

 

 

Edited November 3 by SharperDingaan

[Gamecock-YT]

Can't speak on the CFA but for the GMAT it's good to do it while you're still in 'college study form', those skills start to atrophy pretty quickly once you are in the working world and not using them on a daily basis.

 

Also depending on what you have your undergrad degree in, you could find the MBA programs pretty worthless beyond growing your network and being associated with a 'brand'. I dropped out of mine after 15 hours because one of the prereqs to continue the program was being forced to take a 'business writing' class that was teaching me to write memos. Not to mention a lot of the business classes were pretty remedial to a business undergrad.

[Vish_ram]

I did both CFA and MBA. I was an industry outsider (Engineering background) without any knowledge of economics, finance, accounting etc. 
 

I’ve been an investment advisor of my own firm I had cofounded. on the plus side it adds a ton of credibility. It adds to your confidence, if I put in effort I can easily understand anything. 
 

without the formal approach I may have lacked the discipline to learn them all. 
 

All knowledge is cumulative. It sure has helped me with the returns.

 

As most know knowledge, intellect, education may account for 10% of returns. 

[SharperDingaan]

Ethics thing. The ethics of the identical situation are different everywhere in the world. You don't rip your client off 'cause it's bad for business, the ethics restriction is just byproduct.

 

Curriculum. There are many ways to doing investment, value is just one. It behooves one to be aware of the other approaches and how they work, agreement is not a requirement.

 

Employer. It's up or out, and no different to accounting, cpg, legal, academia, etc. Cheap bunnies drinking cool aid goes a long way to keeping costs down, and when you're king ... you're the  beneficiary. Play the game or walk away, your choice.

 

Everyone makes poor choices, but life moves on, and you either reinvent yourself or live miserably for the rest of your life. Most CFA's and MBA's work in the corporate or public sector, not IB. As it's just not worth the drama.

 

SD

Edited November 3 by SharperDingaan

[LC]

Three words:

Brett Horn, CFA

 

 

In all seriousness, it may help break thru into the industry at the early stage of your career. That’s about all its useful for.

[TwoCitiesCapital]

4 hours ago, LC said:

Three words:

Brett Horn, CFA

 

 

In all seriousness, it may help break thru into the industry at the early stage of your career. That’s about all its useful for.

[Saluki]

A very bright guy I know had it and I asked him about doing one years ago, when I wanted to work as something other than a lawyer.  He was an economist, not a portfolio manager, and he said they gave him a hard time about the required hours because of his job title, even though it involved a lot more number crunching (risk analysis and trying to detect market manipulation), and he had to have his boss submit stuff documenting the type of work he did and show it was comparable. 

 

He echoed to me what a lot of people are people are saying here, that it is a good credential to get your foot in the door, but after that it's purely decorative.  I'll mention it because it's relevant, that he was Asian.  And our organization had a terrible record of promoting Asians into management roles, so he thought it would help his chances.  He said it didn't, and he eventually left for a management gig someplace else.  While he worked with me, he also taught a classes in finance and economics at a college (to bolster his resume for management) and he said the credential helped him stand out from other teaching applicants.  The academics didn't know much about it, but if he had it and others didn't, that helped him stand out since he had no prior teaching experience (again, a foot in the door). 

 

I have the same opinion of an LL.M., which is something you get after law school to specialize in something like Tax.  People of my ethnicity are also not common at my employer and the ones that are here tend to be overqualified, so although I don't use my LL.M., other than an office decoration, I may not have gotten in the door without it. 

[Eldad]

On 11/2/2024 at 7:11 PM, billybobjovialdechicoutimi said:

Why I believe the CFA is a scam

 

1- Ethics

 

The curriculum won't make anyone who is un-ethical, suddenly ethical, but that's what it naively proposes.

Many of the 'cures' for discovery of unethical behavior at your employers are blind to reality: it recommends resigning, well here is the thing, in most of the world's job markets, and I believe even in large liquid ones like NYC or London, etc. , you simply cannot find a job fast enough to 'resign' your current one, furthermore, your ex-employer will not care that you were CFA or not, they will make it their life mission to destroy your chances of getting any other employment in the field, since it's essentially your word of them being 'unethical' against theirs, and the CFA will not intervene at all to adjudicate, etc.

 

 

2- Employment, Salary, etc.

 

When I got the CFA charter, after passing the 3rd test, I got a handshake from my employer, and a few smiles, but that's it, no raise or anything like that, not even a change in title, just the three letters next to my name for them to brag to current/future clients.

 

What the CFA stats on salary will not show you, is the many ex-charterholders who decided to stop paying their dues, because they are insanely high and can only be defended if one remains in the industry. The stat is massaged therefore higher therefore simply by cutting the denominator to the lowest possible.

 

 

3- Curriculum itself

 

I was a Buffett devotee before 'learning' the material for the different tests. I cannot say exactly how much, but I wouldn't be surprised if at least half of the CFA material simply goes against all the teachings of the value school, of Buffett, Munger, et al. In my view, Benjamin Graham who pushed for the designation in the first place, himself would be shocked by what is taught as CFA gospel, and fyi, I 'un-learned' everything the curriculum advised, and thank god I did because if I hadn't, I'd be living under a bridge somewhere panhandling.

 

 

 

BOTTOM LINE: Its a waste of time and money, and worse, to those who feel somehow comforted by the fact that their financial advisor is a CFA charterholder, well, I guess if you are naive enough to believe that ethics and honesty can be taught via a test, then you probably deserve whatever Hell you may eventually endure, at least in terms of underperformance. 

I agree. I am a CPA and I kind of liked the challenge of taking those tests so I bought a CFA I study guide just for fun. I started going through it and somewhere around Sharpe’s Ratio I realized that the material was counterproductive. 

[james22]

Do you have anything better to do with your time?

Only if you do can the CFA hurt.

 

Otherwise, can only help.

[james22]

 

 

[K2SO]

If you want to work in asset management, a CFA is a must. It's an entry card. It shows you're serious. In some jurisdictions it is necessary for regulation with securities regulators (or at least it gives you a pass on some basic requirements). 

If you have no interest in seeking employment in this field, don't expect much. Pursue it out of interest but otherwise you'll find it a waste of time.