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CFA Level 1 - What is it worth?

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CFA Level 1 - What is it worth? [#permalink] New post 21 Jan 2008, 11:14
I have been thinking about going for a CFA Level I this June before I join Columbia this fall. My background is in business/tech consulting and I am going for either Investment management (IM) or IBanking. Do the esteemed people of the forum have any opinions or thoughts? I realize that CFA probably makes more sense for IM but I have no real fin background and figured that I would atleast use the next few months for something constructive instead of lying around sleeping, going to the gym etc. My friend who works as an analyst for Fidelity says that CFA Level I would be too much pain too little gain. I have heard varied opinions.

Does have any experience with this matter in recruiting at top schools? Please bear in mind that I am talking about just CFA Level I and not being a charter holder or passed all the levels. Thoughts? Plus it may doubtful if I have the time to study for Level II next summer when i an interning.
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Re: CFA Level 1 - What is it worth? [#permalink] New post 21 Jan 2008, 12:23
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summer2010 wrote:
I have been thinking about going for a CFA Level I this June before I join Columbia this fall. My background is in business/tech consulting and I am going for either Investment management (IM) or IBanking. Do the esteemed people of the forum have any opinions or thoughts? I realize that CFA probably makes more sense for IM but I have no real fin background and figured that I would atleast use the next few months for something constructive instead of lying around sleeping, going to the gym etc. My friend who works as an analyst for Fidelity says that CFA Level I would be too much pain too little gain. I have heard varied opinions.

Does have any experience with this matter in recruiting at top schools? Please bear in mind that I am talking about just CFA Level I and not being a charter holder or passed all the levels. Thoughts? Plus it may doubtful if I have the time to study for Level II next summer when i an interning.



Here's my $.02. This is coming from a CFA Charterholder and somebody that is the director of a mentor program for Level I candidates in Cali and has worked with a lot of Level I Candidates over the past three years.


1) The test will be MUCH easier after MBA school

2) If you want to be in I-Banking, CFA is essentially worthless (from a $$$ perspective)

2a) Once you get into school, you will have no time to study for Level II or Level III. If you go into I-Banking after graduation, you will also have zero time to study for the second two exams.

2b) Level II builds off of Level I. If you take Level I now (and pass) and take Level II in 2011 (you'll be in b-school from 08-10), you're going to have to put significant time into relearning some of the elements from Level I.

3) The CFA is no joke. Pass rates for Level 1 are ~35%. And that's for the people that show up! Approximately 25-35% of those that register, don't even make it to test day (for a number of reasons, although I would assume the #1 excuse is because of lack of studying). I would also suspect that the pass rates for those that do not have finance backgrounds are likely to have pass rates closer to 20%.

4) If you go into IM, your firm will likely pay for the materials, tests, etc. All in, this could run you about $5k depending on your study materials how many times you need to take the exams.


Bottom Line: No point in taking it now.

CFA is huge for IM. As far as your amigo at Fidelity, I'm not sure what type of role he has, but I have to disagree. CFA definitely involves serious pain, but has been one of the most rewarding aspects of my personal/professional career.

That being said, if you end up taking the exam this June, you probably needed to start studying about a month ago. However, if you can seriously commit ~15 hours/week for 3 months (Feb-April) and ~25 hours/week in May, you have a shot.


Cheers,
RG

PS If you are interested in more opinions, check out analystforum.com
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Re: CFA Level 1 - What is it worth? [#permalink] New post 21 Jan 2008, 14:26
Hey RG

Thanks a lot for the info above. Still thinking about the Level I but I will decide in the next month or so.
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Re: CFA Level 1 - What is it worth? [#permalink] New post 21 Jan 2008, 14:55
ryguy904 wrote:
summer2010 wrote:
I have been thinking about going for a CFA Level I this June before I join Columbia this fall. My background is in business/tech consulting and I am going for either Investment management (IM) or IBanking. Do the esteemed people of the forum have any opinions or thoughts? I realize that CFA probably makes more sense for IM but I have no real fin background and figured that I would atleast use the next few months for something constructive instead of lying around sleeping, going to the gym etc. My friend who works as an analyst for Fidelity says that CFA Level I would be too much pain too little gain. I have heard varied opinions.

Does have any experience with this matter in recruiting at top schools? Please bear in mind that I am talking about just CFA Level I and not being a charter holder or passed all the levels. Thoughts? Plus it may doubtful if I have the time to study for Level II next summer when i an interning.



Here's my $.02. This is coming from a CFA Charterholder and somebody that is the director of a mentor program for Level I candidates in Cali and has worked with a lot of Level I Candidates over the past three years.


1) The test will be MUCH easier after MBA school

2) If you want to be in I-Banking, CFA is essentially worthless (from a $$$ perspective)

2a) Once you get into school, you will have no time to study for Level II or Level III. If you go into I-Banking after graduation, you will also have zero time to study for the second two exams.

2b) Level II builds off of Level I. If you take Level I now (and pass) and take Level II in 2011 (you'll be in b-school from 08-10), you're going to have to put significant time into relearning some of the elements from Level I.

3) The CFA is no joke. Pass rates for Level 1 are ~35%. And that's for the people that show up! Approximately 25-35% of those that register, don't even make it to test day (for a number of reasons, although I would assume the #1 excuse is because of lack of studying). I would also suspect that the pass rates for those that do not have finance backgrounds are likely to have pass rates closer to 20%.

4) If you go into IM, your firm will likely pay for the materials, tests, etc. All in, this could run you about $5k depending on your study materials how many times you need to take the exams.


Bottom Line: No point in taking it now.

CFA is huge for IM. As far as your amigo at Fidelity, I'm not sure what type of role he has, but I have to disagree. CFA definitely involves serious pain, but has been one of the most rewarding aspects of my personal/professional career.

That being said, if you end up taking the exam this June, you probably needed to start studying about a month ago. However, if you can seriously commit ~15 hours/week for 3 months (Feb-April) and ~25 hours/week in May, you have a shot.


Cheers,
RG

PS If you are interested in more opinions, check out analystforum.com


A couple of remarks / questions... (my 0.02 euro :) )

First of all, I am a CFA level II candidate.

I totally agree with you concerning the dedication you need to pass the CFA. The CFA L1 is most probably the toughest exam I have ever passed I my life - and I have a financial background (studies and work). And it's only going to get tougher.

I'm not sure I agree with you concerning exam being easier after MBA. Yes it will be easier, but MUCH easier? I don't know. If you have a strong financial background, I don't think an MBA will make a massive difference. It might be the case if you don't a financial background however. Obviously I haven't done an MBA (yet!! :-D ) but I don't really see how an MBA could drastically improve CFA study with a financial background. Might be completely wrong though.

I also wonder when you say that a CFA is useless in IB. Not sure I agree. I have the impression that Ibanks ask for either an MBA or a CFA in order to become an associate, am I right? Would have to check it.

Would be interesting to have other people's opinion on the subject.

PS: if you plan only DECIDING in a month on whether you're going to take the CFA, might as well forget it IMO.
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Re: CFA Level 1 - What is it worth? [#permalink] New post 21 Jan 2008, 21:11
We've had some good conversations on CFA stuff, so I would recommend searching the past discussions, if you haven't already. RG has some good points, here's some more to think about.

Here are some reasons to wait and take L1 after your first year:
- the 1st year curriculum (finance, accnt, stats, plus probably a few finance/investment electives) would be relatively similar to L1, which means you might be able to study less for the CFA (although your overall studying for both MBA and CFA could be brutal).
- by that time you would know whether IM was really for you. L1 wouldn't do much for getting job in i-banking.

Here are some reasons to take it now:
- Having passed L1 with Fidelity may help them convince you of your desire to be in IM, (but probably not a lot else).
- going through the material now will give you a leg up on the 1st year curriculum, and may even help you waive out of some core classes.


If you do decide to take a crack at L1, I would recommend starting as soon as possible. Remember, these are tests of sheer quantity and perseverance, not tests of intelligence. It will take a lot of time to get all the material into your brain, even if you're really smart.

Good luck,
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Re: CFA Level 1 - What is it worth? [#permalink] New post 22 Jan 2008, 06:52
Take the CFA after school.

Enjoy your time now and goof around.


I can't see a company hiring you because of your CFA Level 1 or 2... They'll hire you for other skills. If you don't know a programming language.. I would take a C++ class and get some of those programming skills down cold. Not for technology positions... but for the quant firms and other uses.
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Re: CFA Level 1 - What is it worth? [#permalink] New post 22 Jan 2008, 07:15
My two cents as well. IMs care that you have a CFA, but only to the degree that it shows you are serious about the profession. Many people at the GSB beak into IM with no CFA (though most list some bullet about intending to take it). From what I've heard, the CFA is hard as heck. MBA programs are plenty difficult on their own accord, and I've heard Columbia's IB recruiting is particularly ridiculously demanding. My vote: Its not worth it.

You might find this helpful too:

http://student.chicagogsb.edu/group/img ... r_2006.pdf
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Re: CFA Level 1 - What is it worth? [#permalink] New post 22 Jan 2008, 08:28
rhyme wrote:
My two cents as well. IMs care that you have a CFA, but only to the degree that it shows you are serious about the profession. Many people at the GSB beak into IM with no CFA (though most list some bullet about intending to take it). From what I've heard, the CFA is hard as heck. MBA programs are plenty difficult on their own accord, and I've heard Columbia's IB recruiting is particularly ridiculously demanding. My vote: Its not worth it.

You might find this helpful too:

http://student.chicagogsb.edu/group/img ... r_2006.pdf


Thanks a lot for the opinions guys. Rhyme - that short guide is really useful. However, giving Level I now instead of next June when I am interning does seem to make more sense.
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Re: CFA Level 1 - What is it worth? [#permalink] New post 22 Jan 2008, 09:02
Audio wrote:
ryguy904 wrote:
summer2010 wrote:
I have been thinking about going for a CFA Level I this June before I join Columbia this fall. My background is in business/tech consulting and I am going for either Investment management (IM) or IBanking. Do the esteemed people of the forum have any opinions or thoughts? I realize that CFA probably makes more sense for IM but I have no real fin background and figured that I would atleast use the next few months for something constructive instead of lying around sleeping, going to the gym etc. My friend who works as an analyst for Fidelity says that CFA Level I would be too much pain too little gain. I have heard varied opinions.

Does have any experience with this matter in recruiting at top schools? Please bear in mind that I am talking about just CFA Level I and not being a charter holder or passed all the levels. Thoughts? Plus it may doubtful if I have the time to study for Level II next summer when i an interning.



Here's my $.02. This is coming from a CFA Charterholder and somebody that is the director of a mentor program for Level I candidates in Cali and has worked with a lot of Level I Candidates over the past three years.


1) The test will be MUCH easier after MBA school

2) If you want to be in I-Banking, CFA is essentially worthless (from a $$$ perspective)

2a) Once you get into school, you will have no time to study for Level II or Level III. If you go into I-Banking after graduation, you will also have zero time to study for the second two exams.

2b) Level II builds off of Level I. If you take Level I now (and pass) and take Level II in 2011 (you'll be in b-school from 08-10), you're going to have to put significant time into relearning some of the elements from Level I.

3) The CFA is no joke. Pass rates for Level 1 are ~35%. And that's for the people that show up! Approximately 25-35% of those that register, don't even make it to test day (for a number of reasons, although I would assume the #1 excuse is because of lack of studying). I would also suspect that the pass rates for those that do not have finance backgrounds are likely to have pass rates closer to 20%.

4) If you go into IM, your firm will likely pay for the materials, tests, etc. All in, this could run you about $5k depending on your study materials how many times you need to take the exams.


Bottom Line: No point in taking it now.

CFA is huge for IM. As far as your amigo at Fidelity, I'm not sure what type of role he has, but I have to disagree. CFA definitely involves serious pain, but has been one of the most rewarding aspects of my personal/professional career.

That being said, if you end up taking the exam this June, you probably needed to start studying about a month ago. However, if you can seriously commit ~15 hours/week for 3 months (Feb-April) and ~25 hours/week in May, you have a shot.


Cheers,
RG

PS If you are interested in more opinions, check out analystforum.com


A couple of remarks / questions... (my 0.02 euro :) )

First of all, I am a CFA level II candidate.

I totally agree with you concerning the dedication you need to pass the CFA. The CFA L1 is most probably the toughest exam I have ever passed I my life - and I have a financial background (studies and work). And it's only going to get tougher.

I'm not sure I agree with you concerning exam being easier after MBA. Yes it will be easier, but MUCH easier? I don't know. If you have a strong financial background, I don't think an MBA will make a massive difference. It might be the case if you don't a financial background however. Obviously I haven't done an MBA (yet!! :-D ) but I don't really see how an MBA could drastically improve CFA study with a financial background. Might be completely wrong though.

I also wonder when you say that a CFA is useless in IB. Not sure I agree. I have the impression that Ibanks ask for either an MBA or a CFA in order to become an associate, am I right? Would have to check it.

Would be interesting to have other people's opinion on the subject.

PS: if you plan only DECIDING in a month on whether you're going to take the CFA, might as well forget it IMO.



Just to clarify, I did not say CFA is useless at an I-Bank. I said that from a monetary perspective, it has no impact. There are noticeable differences (and easier entry) into the IM field with a CFA, however.

As far as I-Banks requiring CFA or MBA - They will only take you with MBA. Yes there are exceptions, but in general 95% of people getting into I-Bank (for the first-time) are coming straight from top MBA programs. Talk to any associate at an I-Bank and they will confirm this.
Re: CFA Level 1 - What is it worth?   [#permalink] 22 Jan 2008, 09:02
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