How much weight does the CFA charter carry

Agreed. I don't believe that many Adcom members realize the dedication and amount of work it takes to get a CFA. They almost seem to equate it to be similar to getting a CPA.

That's exactly right. With all do respect to folks pursuing the CPA, it's not even comparable. The CFA exams are more difficult by a mile. In fact, they are significantly more difficult than:

1) Any test you will ever take as an undergrad
2) GMAT
3) Anything you are likely to do in business school
4) I've heard several lawyers say it's harder than the bar

I don't want to exaggerate here, because the exams are definitely passable, but it is a huge commitment to get through the three levels. Imagine studying for 300-400 (if not more) hours, walking into a six hour beast of a test, and then, statistically speaking, probably failing. CFA Institute just released the level one pass results -- 35% made the cut. Most of the people taking the exam have BBAs and MBAs already, so that gives you a sense of the difficulty.

Anyway, I do not think it matters much to b-school. I think the people who were going to get in, get in whether they have it or not, and the people who were not going to get in, don't get in whether they have it or not. In fact, I think CFA is almost a replacement for an MBA -- a lot of jobs say MBA or CFA required. From that standpoint, business schools are unlikely to give it the full weight it deserves (just my opinion), since that really legitamizes it from a competitive standpoint (no to mention that it doesn't teach you leadership, team work or how to suck up to your boss prior to asking for a good recommendation). Anyway, CFA > MBA in terms of finance, but obviously you will not get the well rounded business perspective you get in an MBA program.

Do a search -- there is a thread about this around somewhere.

One thing about the pass rate of the CFA...remember that includes everyone who takes it not just folks applying to top business schools. I would be willing to bet that the vast majority of people who have CFA's and applying to top schools passed the first time. Remember the average GMAT is in the mid 500s yet at the top schools its 700+...the people applying to top 10-15 b-schools are the cream of the crop. I think adcoms do realize how tough it is but its not a very unique thing for b-school applicants, and the people holding them often are competing against other people who also have CFAs...you aren't competing against some engineers who passed the PE.

CFA exams are difficult and passing them are a nice accomplishment; however this really has no bearing on the weight they should be afforded in the MBA application process. Schools are interested in things that are relevant to succeeding in business school and getting a job. CFA is nice (very nice for some fields), but it's probably not give "full value" based on how difficult it is to obtain because it doesn't relate all that directly to many aspects of MBA study.

I wouldn't get a CFA to improve the odds of getting into business school (way to much effort for marginal benefit), but if you have a CFA, then play it up in your essays and talk about how you will combine it with your MBA to achieve your future goals. Do that, and you'll help yourself a lot.

I think you're underestimating the difficulty of the CFA. I can name 3 people off the top of my head that have Top 20 MBAs and weren't able to make it through the CFA program. Just because you can get into a top 10-15 MBA program that does not mean you can pass the first time. Also, you know that its three seperate exams taken over 3 years right? So, passing the first time doesn't mean passing one exam with a 35% pass rate it means passing three exams (with roughly 35%, 40% and 60% pass rates, respectively). It's impossible for somebody that has not gone through the CFA program to understand how difficult it is.

I think Sudden hit the nail on the head:

Not arguing the difficulty of the CFA process. Just stating that they are like Harvard alums applying to top schools...more common than you would think. Seems that most people I talked to who have completed the CFA process, passed all three first time around. Now I know people who failed once or twice wont go bragging about that...but lots of people say they passed the first time around.

Pelihu is right though, the best benefit it provides is how combining it with your MBA will help you. Also once you are in chances are you can waive out of lots of core requirements...that is probably the best thing about the CFA for a lot of folks.

Thanks for all the feedback. The part that I hope most adcoms acknowledge is that a charterholder with good work progression has progressed under a significant amout of stress - not to mention the 400+ hours of studying each year.

Also, if everyone you know passed the CFA on their first try....you know some really smart people. I can say, with absolute certainty, that the CFA charter is much harder than Harvard undergrad. Comparing the CFA to a 700+ on the GMAT is apples to oranges.

Thanks for all the feedback.

Agreed. I'll admit it right off the bat. I purchased all of the books for CFA Level 1, spent 2 weeks studying, and said forget it and sold them. I have a tremendous amount of respect for anyone who passes through and gets a CFA charter. Regardless of your pedigree or your intelligence, the CFA shows anyone that you were passionate, hard working, and committed to a course of study that is far more rigorous than anything 90% of your MBA classmates have went through.

There are many subjective ways to look at a kid who graduated from Harvard. He could have done it 100 different ways. The CFA however is a level playing field. If you have a CFA charter, I could also care less what your GMAT Quant Percentile was. I'm extremely confident that you would succeed academically in any MBA program in the world.

If only more Adcoms would see it that way.

I agree with part of what river said. A lot of people do have the CFA charter or some progress prior to applying to b-school. I think the contribution the charter makes to your candidancy breaks down along two lines:

- What else have you done? If you have "just" passed the CFA and worked during the last four years (or however much work ex you have), join the crowd. The charter will not be a differentiating factor for you. If you did the above and simultaneously ran a non-profit (or something else interesting), then you stand out. I tend to think the relationship here is not linear -- there is a multiplicative effect in terms of how impressive you look if you were able to add extras on to your already demanding work ex (theorhetically anyway since finance is pretty demanding in general) and CFA candidacy.

- It depends on what you did prior to your CFA candidacy. If you have a BBA in finance, completed the CFA charter and then apply to Wharton / Chicago to study finance, the adcom will probably ask, "Why? You already know finance." This type of candidate is not very compelling since they are pretty narrowly focused on one type of skill, likely to the exclusion of other skills. If, however, you come from a non-finance / econ background and pass the exams in quick succession without a prior relevant background, I think you prove to the adcom that you can throw down with business school types and succeed in a variety of disciplines (provided your GPA is strong).

For example, who is more impressive? The guy who majored in finance and then passed 3/3 the exams, or the guy who majored in liberal arts and then passed the exams 3/3? It's pretty clear in my mind that the liberal arts guy probably had a much tougher time getting through the exams since he had no background -- to me, this is a lot more impressive (full disclosure: I was a liberal arts major). The adcoms definitely recognize this (not to mention that the CFA serves as a kind of alternate transcript of quant based study for the more qualitative folks out there like myself).

I also disagree with part of what river said. Statistically speaking, the program takes four years to complete and most people fail at least one level. I don't think most top b-school applicants go 3/3, though I would admit that competitive folks are more likely to have done so. L3 results are not out for me yet, but I expect the pass rate to be around 50%. That means the probability of going 3/3 is 7.8% (.39 * .4 * .5). The number isn't adjusted for retakers that skew the data (limited data availability), but I would bet good money that if you go 3/3, you are in the top 10-15%, and if you do it in the minimum possible time (18 months instead of the average of four years), you are better still. Not a lot of people pull it off. I expect that if I go 3/3 in 18 months, I will be in the top 1-5% (roughly) of state school liberal arts majors taking the exam -- that could be huge for my candidacy.

One last thought: I think the effect of the CFA on your candidacy depends heavily on the schools you apply to. Schools like Stanford specifically state that they like people who travel outside the lines to accomplish something they believe in. So if you are the typical BBA -> CFA, that probably is not a positive for you. I was waitlisted at Stanford this year, and I think a big part of that was the progress I made on the CFA exams (L3 candidate at the time of applicantion), since it showed that I was willing to "suspend disbelief to pursue a career goal" (or whatever the Stanford phrasing is). (The CFA is highly relevant to what I want to do in my career, and my story makes sense). In contrast, I didn't even get a look at Harvard. So, at the end of the day, the answer is "it depends."

I think those in the CFA program tend to argue that it should be more important than it currently seems to be in the admissions process. I also think that those who have gone through it also tend to glorify how difficult the exams are, how many hours they had to study, etc. It's a badge of honor, kind of like how i-bankers talk about how they work 120 hour weeks. I really don't think admissions read a whole lot into the program other than it shows commitment to the industry. No offense to sudden, but I don't think they care all that much if someone went 3/3 in 18 months or passed the exams from a liberal arts degree vs. a business degree. It's just a way of showing that you have a desired goal and are willing to take some reasonably difficult exams to accomplish them. There are equally difficult exams in other fields that I'm sure admissions view in the same way.

Do you have the charter? No offense, but if you don't, then you are not qualified to talk about the difficulty. Try working 60-70 hours a week and coming up with hundreds of extra hours of studying on your own time (probably at least 1,000 hours).

In terms of what b-schools think, they do read into it. This is not hypothetical -- I received feedback of this nature from a number of M7 schools before and after my applications.

In terms of glorifying it, I don't agree. I am interviewing for jobs right now, and have been told straight away that I have made it further in the process than a number of MBA candidates because of the progress I have made on the CFA. People in the industry know it is hard and they respect it.

Anyway, to each their own.

I apologize if my post came across as abrasive or degrading, sudden. I'm just calling it like I see it, after hearing these arguments for the 1000th time. (btw, I'm equally as qualified as you are to talk to the difficulty of the exams.)

Obviously your feedback is a good data point(s). But I've also heard other Charterholders' feedback from M7 schools which was essentially what I represented in my post, so I take that data and combine it with yours. I understand that you will want to overweight your own experience, but I'm just trying to draw a generalization here.

Just so we're clear, I never said the Charter wasn't respected in industry. Indeed, I recognized that it shows both a level of commitment to the IM industry and a propensity for setting and achieving a desired goal. When I talk about "glorifying" it, I'm talking about all those statements you hear like, "probably at least 1,000 hours of study." Now, I know they recently revised the 250 hours to 350 hours, but can you say with a straight face that you actually studied 350 hours or more for each exam?

There are many professional exams, both more and less difficult than the CFA exams, yet we never hear about how difficult they are or how they are better than an MBA. My main point is to provide a tempered viewpoint, as an insider, on the matter and that maybe, just maybe, CFA Candidates and Charterholders, myself included, are a little guilty of self-aggrandizement.

I agree with sudden.

As a charterholder, there is nothing more frustrating than hearing someone who has not gone through it attempt to understand the commitment. I think the CFA is the purest form of testing some of the smartest people (in finance, economics, time management, etc.) in the world. There is no subjectivity or bias in the CFA curriculum.

Cougar – I can’t speak for others but I can definitely say that I spent over 400 hours (solid hours) studying for Levels II and III.

That said, the adcoms will most likely view the charter from an outside perspective and you have to approach it accordingly.

Fair enough. You are a charterholder, so I respect your opinion on the difficulty. I can honestly say that I spent over 300 hours for the first exam, and over 400 for each of the 2nd and 3rd exams. It took me quite a bit more than 250 because I did not have a prior background, though this is more or less consistent with the effort level from others I have spoken to, including those with BBAs and MBAs in finance. Level 3 especially is well beyond what you learn as a finance student in a traditional university program at any level (at least that is my understanding from having researched the program and various BBA and MS Finance programs).

I would agree with you that the M7 is not especially enamored with the CFA for a traditional finance candidate: BBA -> CFA. For those people, the CFA is somewhat redundant. I mean, how hard should it be to pass level one if you already have a BBA? You shouldn't even need to study (or not much, anyway). So that probably doesn't count for much. However, I do think that non-traditionals who get through the exam stand out in a positive way and that for them, the CFA probably carries a lot of weight. The admissio process is highly subjective and generally not fair -- a lot of it is based on perception, for better or for worse.

As for other credentials, I can't really comment on that. What professional exam is similar to an MBA? CPA? Sort of, but not really. I can't think of another example. Do you know of any? And I am not saying that a CFA is the same as an MBA, but it's pretty close in the eyes of many employers.

I think we probably agree more than we disagree, but at first I thought you were just another CFA-hater (and there are a lot of them out there). As with most things, the truth probably lies somewhere in the middle between people who sacrificed to get through the program and those who didn't, but feel the need to knock it. So in that sense, I agree with you that some people do inflate the meaning and difficulty of the exams, although I think a lot of these people are just trying to protect the investment they have made from people who would erode it.

Congrats on passing. Are you applying this year? Which schools?

I think it's already been said but in my opinion here is the impact of the CFA in a nutshell:

As many have said (including myslef) it's not going to help you much as far as getting in to business school and adcoms probably don't give it quite as much weight as it deserves but as Pelihu pointed out the ability to do well on a finance test is not really what they are looking for. They want leadership, teamwork, interpersonal skills, etc. I'm waiting for my Level 2 results right now but I don't expect it to help much with my apps. In fact, the CFA got a grand total of 2 lines in my entire app - 1 line in my career goals essay and one line under activities in the application form.

However, the CFA designation itself is very valuable if you are looking for a career in investment management. It may not help you get into bschool, but if you have both the CFA charter and a Top MBA you will be highly marketable at buy side firms. The CFA will help with investment management recruiting and increase your odds of landing a top buyside job. It's highly respected in the investment management industy, and many firms prefer it to the MBA. I think there is no better combination than a top ranked MBA and the CFA charter for somebody that's interested in an investment management career.

So, basically the CFA is very valuable for your career goals if your interested in investment mangement (as is an MBA) but the CFA is not going to make it more likely for you to get into a top ranked program.

AZCFA, I feel like I'm betraying a sacred brotherhood or something by talking anything but the most unabashed praise of the CFA program (ok, that was an overstatement.) At any rate, I think you get the jist of what I meant. You are far more likely to find those who need education about the difficulty of the program than not but I just wanted to add a little balance on the topic since almost all Candidates/Charterholders become ultra-defensive.

sudden, I agree with many of your points as well. For a simple example of a comparable exam: the CPA exams. Your first reaction is probably, "no way, that test is easy." But remember it is all relative. If you were a liberal arts major and tried to pass the CPA exams, it would be just as difficult as the CFA exams (not to mention impossible since you have to have a required amount of specific education credits just to sit.) The same could be said of the bar exam. You have three years of education backing up what is needed to pass. So, in my opinion, for someone with a BBA in finance, the CFA exam difficulty is a pretty fair comparison to the CPA exam difficulty for someone with a BBA in accounting or the Bar exam difficulty for someone with a JD. You'll get comparisons from CPAs that say that the CFA is much harder (having passed all of those exams myself I can attest that for me each one was less study time than for a CFA level, but then again I had taken many accounting courses in college and not many finance courses.) Anyway, I'd prefer not to hijack this thread to discuss my application plans, but would be happy to PM you about that.

I’m a little late to the game in this thread, but I definitely feel like I need to chime in.

First, let me say major congrats to AZCFA on earning the charter. I also received mine in 2007

In my opinion, the short answer is that it has virtually ZERO impact on your application

Here’s a couple of examples, all else being equal, how a CFA Charterholder stacks up, from adcom’s perspective (in my opinion):

Top 30 University > Non-top 30 + CFA
740 GMAT > 700 GMAT + CFA
Habitat for Humanity Volunteer > CFA
Attorney > CFA
International Experience > CFA
Legitimate Leadership Experience > CFA
Military experience > CFA
Government work experience (SEC, DHS, Working on Capital Hill, etc.) > CFA
Team captain in college sport > CFA
3.7 GPA > 3.2 GPA + CFA
Olympic athlete (with or without a medal) > CFA
First generation to go to college > CFA
Liberal arts major taking stats + calc prior to MBA and receiving A’s > CFA
CPA = CFA
CFA Level I Candidate < CFA Level II Candidate = CFA Level III Candidate = CFA Charterholder

Obviously, these things don’t work in a vacuum and no two candidates will have similar backgrounds. However, if you match two candidates side by side that generally have the same background with the exception of top 30 school or GMAT, etc, etc, the folks on the left side of the equation will be taken again and again over the CFA Charterholder. The last example (CFA Level I < CFA Level II, etc.) in particular pains me to say, but there is no way that adcom can tell me what the difference is between a Level II or Level III candidate or "successfully passed Level I, successfully passed Level II, etc, etc.) Not going to happen..

So why is there no value placed on the CFA? Because adcom DOES NOT know what the CFA is or what it is about. They may say they do, but I bet is you asked them what it stands for, 9/10 would say “Certified Financial Analyst.” (I think Sudden and AZCFA just cringed ) At best, they may know that it involves some tests. They do not know that it requires 300+ hours of study PER exam, all while working full-time. They do not know that pass rates are sub ~40%, which happen to be at historic lows. They don’t know that each level has ~2500 pages of curriculum . They don’t know that you can put in 300+hours of studying and still walk away from the exam and FAIL because the exam is just that brutal.

I have first-hand experience with talking about this with adcom officers at Kellogg, USC Marshall, and Duke. I have second-hand knowledge of experiences with adcom officers at Cornell (the dean of admissions, in fact) and Georgetown. The bottom line is that they really DO NOT KNOW what it is. And honestly, I’m not exaggerating or trying to overplay this.

Charterholder do not regularly go 3/3. It is just not that easy. Just as quickly as somebody can point out that they know X number of people that did, I can easily point out 10X number of people that failed one or more of the levels. Also, just to elaborate on the pass rates...June 2008 pass rates were 35%. This does not include people that do not even show up for the exam (for a variety of reasons, but I would say that the overwhelming reason is because they could not handle the curriculum). Historically 25% don’t even make it to the testing center. If you factor that in, pass rates for Level I are closer to 26%. Add to that, pass rates for Level II and Level III last year were at all-time historical lows, 40% and 50% respectively.

A couple of examples.

I have two friends that went successfully through Levels I and II with me. Yet they both failed Level III last year after putting in 350+ hours each. One works at PIMCO as a product specialist in fixed income, while the other works at the SEC performing due diligence on hedge funds and broker dealers.

Another example is a friend of mine that works in PE and went to UCLA undergrad. He also has about 4-5 years of IB experience in the gaming/casino industry. Let me pause here for a quick second. Just based on the VERY brief credentials that I just mentioned, you would probably think to yourself, “must be a smart dude, PE is a tough nut to crack.” Yes, you are right!!! Yet it took him two attempts to pass level II and three tries to pass Level III. He spent six years going after the Charter!!!

I have another friend that I work with. She’s absolutely brilliant. She does portfolio risk management and has worked in the industry for ~12 years. I can’t recall where she went to undergrad, but she has an MS Finance degree. She failed Level I two times. She just took it again this June, but I haven’t heard back from her on the results, which were just released yesterday.


Should there be more value attached to it by adcom. YESSSSSSSS!!!! There are only ~90,000 charterholders WORLDWIDE. That’s not very many, especially considering the CFA designation is not a new thing. It has been around for 45 years. It’s a major accomplishment and not many people can say that they have done so.

Some people play sports, some people volunteer, some people work long hours, some people travel. The value of the CFA for admission to top MBA programs should not be seen as any lower than these other activities. So what if it doesn’t show teamwork? So what if it doesn’t show leadership skills. So what if it doesn’t show that you are saving the world? Are the MBA committees so brainwashed that only those items are the main criteria by which they judge people?

Should they not judge people based on commitment, desire, or passion? Should they not judge people based on their ability to emotionally navigate an independent excavation, not understood by even their friends and family? Should they not be interested in people that set out to reach a VERY challenging goal that is (really at a minimum) three years down the road and these people actually achieve this goal. Should they not be interested in people that are the best of the best in their field? The CFA Charter is THE measure by which you can judge someone that works in the finance + investment management positions.

Any CFA Charterholder by default must possess these qualities. It is not possible to get through such a rigorous program without such traits. It also would seem to me that these are highly desirable qualities to have and the types of people that would add significant value to MBA Programs. I would think that they want people in their program that are passionate and dedicated. People that are willing to put in the necessary time and effort and are successful, will certainly be successful in Top MBA Programs. They are the type of people that will put in the extra time to prepare for interviews, research companies, and go the extra mile in preparing for a group presentation.

I'm not saying that adcom should necessarily take a CFA Charterholder over someone that has great leadership experience. Obviously you would like to Charterholder to have some nice experience of his/her own. What I'm saying is that there should be more to it than the superficial glance that it currently gets.

I also think there is a little bit of blame on the part of the CFA Institute. The fact of the matter is that they do not market the Charter towards top business schools. It is marketed towards the industry. I get that, it makes sense, since a big part of the CFA is employability. Also, the industry has noticed and the CFA designation has become a huge asset in the workplace. At the same time, I think that the Institute needs to do a bit of marketing at the top b-schools, since it will benefit the designation, those that have attained it, and the schools that admit Charterholders.

Good luck to sudden and IHTG. I’m pulling for you and hoping that you guys get the good news next month when the results come out.


And by the way, I definitely hit >1,000 hours of study time.

ryguy