GMATClub's Unofficial Chartered Financial Analyst thread

Thats not as much of a concern if there is no social life to begin with!!!

I'm a CFA Charterholder and co-director of a mentor program for CFA Level I Candidates in SoCal. I'd be happy to talk offline. If you pm me, we can set up a time to chat.


Nevertheless, here are some general comments:


1) Ethics - read the book (not Schweser, although the problems are good). Read it once at the beginning of your study and once a week before the exam.

2) Practice Questions - do as many as time will allow. At the very least, after finishing a reading, do the questions in Schweser. While I find these aren't always as tough as the CFA Reading questions, you have to assure yourself some level of material comprehension before you move to the next section. If you aren't getting any questions right without referencing the book, don't move on.

3) Practice Tests - there are 3 full length tests in the Schweser book. Take at least one of these during a timed simulation. That means six full hours, with a 1-2 hour break in between morning and afternoon sessions. Ideally you would take the test on a Saturday (two to three weeks prior to the real exam) and go over the answers on Sunday. Also, at the very least, answer all of the questions in the other 2 sample exams. Doesn't necessarily have to be timed, but do the questions. You'll also have to take the Boston Society Mock Exam. This is VERY VERY VERY important. Take it under simulated test circumstances. It will show you your weak areas and is the BEST gauge of your progress to date.

4) Schweser Pro - very useful. Provides high level outlines of the study sessions. You can also do as many questions at a time as you like. You can also choose which sections you would like to get questions from, as well as the difficulty level. I spent a good amount of time on this a couple of weeks prior to the exam. Also good If you are having trouble in an area, this is a good way to get a bunch of questions thrown at you to make sure you fully understand the material.

5) Review - when you take the exam, you'll be thinking, "I wish I had just a little more time to study." That's always the case, whether you are studying for 3 months or 6 months. You have to give up the last 2 weeks minimum for review. 3 is ideal. This doesn't mean all you do is test questions for 2-3 weeks. But it means that you are not "learning" the material or seeing it for the first time.

6) Ethics - don't underestimate this. The material is easy to understand, but not a slam dunk on the test. It was killer at all three levels, and I have probably read the book 6-7 times in total by now

7) Study Schedule - It varies from person to person, primarily because of education background and work experience. I can talk more to your spefically to your case offline if you like. In general, I'd say CFA Institutes provides a rule of thumb of ~250 hours. For people without finance/accounting backgrounds or without MBA's, I'd say add another 50+ hours to that. Overall, I'd recommend ~4.5 months of studying and three weeks of review. That means if you are taking the test in December, you should begin studying in July and review for ~3 weeks in Novemeber. You need to be disciplined and keep up with the study schedule. You should be studying about 10-15 hours a week. In my opinion, it's kind of like working out. If you miss a couple days it makes it harder to get back in the routine. Once you get going, though, it's pretty easy to keep up with a constant schedule.

Bottom Line: Stick to a regimented study schedule. Practice, practice, and then practice some more. Although ethics is 15% of the exam it's not a gimmee. That being said, make the most of it. There are 240 questions. You'll need as many as you can get.

Cheers-
RG

ryguy904,

You are my new friend.

Awesome. Kudos to RG!

Unfortunately, I am not allowed to post the 2007 survey (you need to be a member of the CFA Institute to have access), but here is a publicly available press release using 2005 data.

https://www.cfainstitute.org/aboutus/pre ... rveyUS.pdf

Take a look in particular at the info on the top of page 10. Seems pretty substantial, in my opinion. Any by the way, the cost of the CFA will be between $3,000 and $6,000 depending on if you take prep courses, buy additional materials, take practice exams, etc. The ROI is immediate and HUGE. As a side-note, it does depend on the industry that you want to go into. CFA is irrelevant (from a $$$ perspective) at i-banks, for instance.

RG, I *almost* signed up in March to take it in June, but I didn't think I had enough time to learn/re-learn all the required material. I'm leaning pretty heavily toward a career in IM, and the CFA seems to be a necessity.

Given my background (BA in Acct, MS in Acct, CPA, public accounting/financial consulting), the course load at the GSB, and the relevant timeframes for internship/full time offers, when would you suggest I go ahead with Level 1? Is December a reasonable goal, or would you recommend pushing it back until next June? Also, how much more beneficial is passing Level 1 in terms of getting an internship/full time offer, as opposed to just being a "candidate?" In other words, of course passing the exam, as opposed to being in line to take the exam is preferable, but is it a deal-breaker?

Obviously, I'm not very familiar with any of the timing or hiring nuances associated with the CFA...any comments or advice would be greatly appreciated!

ryguy,

What schools did you apply to? Are you currently working in (or looking to get into) equity research? I'm taking CFA Level II in a month and looking to get into equity research post MBA (applying fall 09). I'm hoping that if I can get the CFA before I start school that will give me a boost in recruiting for asset management jobs. I work in business valuation so I'm pretty sure my work experience will count for the charter.

Your situation is very interesting. The main challenge that I see for your Level I prep is the logistical issues.

1) If I recall correctly, you're heading to GSB. If that's the case, the CFA exam in December will be taking place near final exams and during recruiting/schmoozing process. I really don't know if you want to tack the CFA on to your schedule.

2) Thinking ahead (as this is a challenge that I discuss with me mentees that sit for the December exam), Level II is offered only 1X per year, in June. I believe the CFA Institute has streamlined the results process a little bit since I took Level I, but the results are released in mid to late January. That means, if you pick up your study materials on February 1 (just to be conservative), you will only have ~3.5 months + 2 of weeks for review to prepare. While this may be enough given your background (see more below), again, with your school situation, I wouldn't recommend this. Level II separates the men and women from the boys and the girls. The pass rates are trending downwards and reaching historic lows. Once you pass Level II, it's just a matter of time until you become a Charterholder. But until you do pass Level II, it's still up in the air.

Speaking from personal experience, I took Level I in December 2004. I got the results around the Super Bowl, in late January. I intended to sit for the exam in June 2005, but once I saw the materials, I nearly **** a brick. I knew it wasn't going to happen for me. With the exams offered only once per year, I didn't want to put in 200+ hours and not have it work out for me. That would have been too painful. Just to finish my story real quickly, I started studying for Level II in December 2005, passed in June 2006, and passed Level III in June 2007.

3) At the end of the day, it is really important to be sure that you want to go the investment management route. That is really where the value and appreciation is (from a $$$ and hiring perspective). At GSB, I think that you will definitely have the opportunities to move directly into IM during your internships and full-time recruiting process. Once you get in the door, I think you can then start on the CFA. OK, I just checked your profile. You are 26. Let's say you are 28 when you finish GSB and then take Level I in June 2011 (we'll add a year just for some leeway). Assuming all goes well, you'll be finished with CFA, an MBA from GSB and three years of IM work experience at the ripe old age of 31. W-O-W


-ryguy

PS Not to put the cart before the horse, but you will do very well with the Level II exam. It is ~40%-50% financial statement analysis (CFA Institute lingo for accounting). That includes things such as foreign currency translation, purchases through equity/pool method, pension accounting, deferred tax liabilities, etc. As I understand, these are intermediate topics discussed in accounting courses. As someone averse to all things accounting, I had never heard of these things, so Level II was a major challenge for me (I put in ~300-350 hours, if I had to guess).

ryguy -

What are your thoughts on the following:

1. Utility of CFA as a way to demonstrate interest in Finance for those with no direct work exp?
2. Whether it actually opens doors for those from other fields (immediate career impact)

thanks for indulging me.

post414035.html#p414035

I have more of a corporate finance role and am looking to switch to research/portfolio management. I can make the switch without an MBA (in fact I was offered a sweet sell-side distressed debt research position in March, but turned it down), but I know that I need/want the MBA for the long haul. I'd like to think that the CFA helped my case (my GMAT isn't exactly off the charts at 680), but my interviewers (both of which were with adcom) at Kellogg and Marshall didn't *really* know what the CFA was. This saddens me like you wouldn't believe. That being said, that could be why I kept myself in the running at some schools without simply being summarily dismissed.

I hope you take care of business and smoke LII in June. Once that is done, I'd focus solely on your GMAT (and essays) as opposed to Level III. Also, apply in Round 1! I don't think there is any real discernable difference between a LIII Candidate and a Charterholder for application purposes. Furthermore, for recruiting, if you want to go straight to IM, companies will "get" that you are working your way there. Again, I don't think they would show any discernable preference for a LIII Candidate v. a Charterholder.


ryguy

Wow. Thanks so much for the advice. Have some more kudos!

Anyhoo, that's a very good point on the timing. December would definitely be a stretch. However, I think I'd still like to try to wrap up Level 1 next Summer. Specifically, are there any review materials that you'd recommend? Also, generally speaking, which courses would you recommend for Level 1 prepwork? Thanks again!

1. I would say passing Level I demonstrates a VERY strong interest in investment management, which is slightly more specific than "finance." However, the reason that I differentiate is because it matters! If you are interested in corporate finance, budgeting/forecasting, treasury types of roles, CFA won't help too much.

2. It depends on your current job and how big of a transition that you are trying to make. If you are trying to make a career switch from marketing to IM, that's going to be extremely tough, even if you pass all three levels. That's where the MBA becomes important. For example, one of the Columbia students that I became buddies with is transitioning from marketing to sell-side at Morgan Stanley when he graduates in a couple of weeks.

2a. Here's a story about a guy that I mentored and am now friends with. He passed Level I in December 2007. He was only a year out of college and was having zero luck landing ANY kind of job in IM, whether it was operations, research, or whatever. At the time of him passing Level I in December (keep in mind that results aren't out until January), he had been somewhat actively looking for a job in IM for ~5-6 months. As soon as he received the Level I test results, he became very active in his search. His hit rate for interviews went up exponentially and he ended up being able to pick amongst three jobs within about 2.5 months of receiving the results.

Hope that helps.

RG

Just to add a little bit to this discussion. (I'm a level III candidate.)

Irishfan - I don't think you should do the CFA program while you're at GSB. For one, you'll have to pay for it yourself. You should have great access to firms through school career center so you don't need CFA candidacy to get interviews. You should just concentrate on what to do once you get those interviews, e.g. read investment news/books, create stock pitches, join investment club, invest in your personal account, etc. and if the CFA program comes up in an interview, you can express your desire to obtain the charter in the future. I don't think any MBA hiring firm will expect you to have progress in the program if it wasn't applicable to your prior work experience. And I don't think only having passed level I will change your prospects immediately coming out of GSB. All that being said, level 1 isn't terribly hard and with your background level 2, after a december level 1 pass, can be done the following June if you want it.

The source "reading materials" are now included in the cost of taking the exam, so you will have the actual CFA curriculum . Many people tend to find this a bit dense. To supplement (NOT replace) your studying, I'd recommend the general studying materials, in order of importance:

Boston Society Practice Exam - this is the best 6 hours of studying you can possibly do. You should not take the real thing without having completed this.

https://www.bsas.org/pe/

Schweser Study Notes - Included with this is something people usually refer to as "Book 6." There are five "Cliffs Notes" types of books that summarize the CFA curriculum and the sixth book has three practice exams. It's very important to answer all of the questions in Book 6. Ideally you take 1-2 of these in a simulated environment, and at least go through the rest of the questions (not necessarily timed). Even if you don't use the Schweser Notes, Book 6 is extremely important to get a lot of questions under your belt. The Schweser Notes also have questions at the end of every section, so it's another way to get more practice and test your comprehension.

https://www.schweser.com/products/produc ... egory=NOTE

CFA Institute Practice Exams - I believe two of these are now included when you sign up for the test. They are great to take because they are straight from the source. CFA questions are always slightly different than any other practice test you will see. Depending on your comfort level, you can pony up another $50 for each extra test (up to 5 total, I think). 1-2 extra should do you well.

https://cfainstitute.org/cfaprog/resourc ... ample_exam

Schweser Pro - If you have some extra time or need additional help. This is a CD question bank with ~2000 questions. It's great to work on some of your weaker areas as well as create mini tests.

https://www.schweser.com/products/produc ... CHWESERPRO

These items can start to add up (but hey, it's all relative), so you need to pick and choose, and it depends on what your comfort level is 6 months out, 4 months out, 1 month out, etc. Schweser usually does package deals that can save you a little $$$ if you buy items together.

If/when you get serious, let me know 5-6 months in advance, and perhaps we can work out a study schedule based on your time commitment/availability so we can best prepare you.

rguy - terrific info. +1.

CFA level 1 is one of my options if I get dinged across the board this year.

rg, I wont be pursuing CFA but can see how your posts on this thread are benefitting others already. +5 kudos!

All this good karma should help you with the UCLA decision. I hope you get my seat and kry's $$$.

Seriously.
Who knew we had a CFA mentor on board here?