By Praveen Chunduru
You are fairly certain that you want a career in Finance and have heard that having a Chartered Financial Analyst (CFA) next to your name will provide you a good head start, but are not sure how to go about preparing for it.
Here are the answers to 5 questions that students often ask from me about CFA. I didn’t cover the questions that have already been answered on the CFA Institute’s website.
1. Does it really provide you a head start/advantage in Finance?
Yes. Finance jobs (particularly in investment banking and private equity) are fiercely sought after, for their relative high pay, the reputation surrounding them, and the advantage these jobs provide in B-School applications. Job creation rate in these fields is far slower than the rate at which the demand is increasing, meaning that there is ever-increasing competition for these jobs. Companies view CFA charterholders/Level 2 or 3 cleared candidates as having a firm understanding of a wide-range of topics in finance, in general. The increasing number of CFAs is making CFA almost a pre-requisite for a job than an advantage.
2. CFA or a reputed MBA?
The combination is terrific, but if you had to absolutely choose one then choose the reputed MBA. Finance as an industry values relationships and networks highly. If I were recruiting today for a role in private equity, I’d choose somebody who has a decent understanding of finance (without CFA) along with a great network of investment professionals (that a reputed MBA can provide) and then train him/her on financial concepts, over someone who has the knowledge but not the network.
3. I’m not sure about Finance – should I pursue CFA?
No. It’s too big an investment of time, and requires a lot of passion for finance to actually complete it and become a charterholder.
4. Is it tough? Can I do it alongside a full-time job? How long do I need to prepare for each of the 3 levels?
I completed my 3 levels while being employed full-time. On average, I spent 1 hour each weekday and 6 hours each on Saturday and Sunday, for 5 months, for each level. I’d highly recommend taking at least 2 (but preferably 4) weeks off before the actual exam to revise, give practice tests, and improve weak points. Please note that if you have a lot of experience in the investment field, your timeline may be shorter than mine.
5. Is there any value to clearing 1 or 2 levels vs. clearing 3 levels vs. being a charterholder?
I’d say that if a Charter’s value is 100%, then Level 3 Clear is 90%, Level 2 Clear is 60%, and Level 1 Clear is 20%.
Hope this helps. Good luck with your preparation. If there are any further questions you have, just leave a comment to this post or write to me on LinkedIn.
Praveen Chunduru is a CFA Charterholder, 2017 MBA Candidate at Wharton Business School, has worked with S&P and IFC – World Bank and is a Co-Founder of VideosForKnowledge, an NGO in the Indian affordable education space.