Are the CFA Exams Worth It? (A Charterholder Responds)

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Is the CFA Program worth the effort?

The CFA Exams, Level 1, Level 2, and Level 3, can require over 1000 hours of study time.

Many people end up passing these exams and still struggle to find jobs in the investment management industry.

The CFA Program does not have many job search tools built into it. You still have to network, learn financial modeling, learn about current events and investing, and be able to interview well for the job. The CFA is not the golden ticket some people make it out to be, and people should go into the program knowing this.

The number of charterholders is increasing faster than the number of jobs in asset management. Passive investing, fee compression, and consolidation in the industry are further eliminating jobs. So the bottom line is you have more Charterholders competing for fewer jobs.

Does this actually mean the CFA Charter is losing value? Not necessarily

I think It’s a similar trend to college degrees. 50 years ago, very few people went to college, so if you did, it guaranteed you a good job. Now, not so much, the number of people going to college has increase much faster than the supply of jobs that require a degree. So many people who went to college are in jobs that don’t require a degree.

So if you want a traditional job in the investing industry, the CFA is becoming more of a bare minimum requirement. You could argue this is making the Charter more valuable for certain careers like portfolio manager, because you basically have to have it.

This also means even if you pass all 3 exams, you might end up in a role that doesn’t necessarily require the charter. Roles like Investment banking, commercial banking, some consulting roles, risk management, wealth management, Corporate finance, sales. These fields usually don’t require the Charter.

But even if you do pursue these other paths, the CFA can still help you a lot, because it’s less likely your competition will have taken the CFA, you’ll stand out out more in that group. Is the 1000 hours worth it for everyone in these other fields? Maybe not. It depends on how much you intrinsically value the knowledge gained in the CFA. If you’re only in it for the job and the money, probably not. If you’re genuinely curious about investing, it very well might be.

Here are the 3 biggest benefits of the CFA Program

1) It’s a structured program to broadly learn about investing. Is the most comprehensive program out there on this topic, you will learn a lot.

2) It’s a Signaling device - you are signaling to employers that you are passionate about investing, and that you have the discipline required to pass these tests. It still is the strongest credential in the investments industry, it does make your resume stronger

3) You join the network of Charterholders, charter holders may be more willing to talk to you help you out if you also have the charter.

But the absolute best reason to do the program is you want to genuinely want to learn the nuts and bolts of investing. You want the tools to figure out how much Stocks, bonds are worth, and how to manage money. While mixing in some economics, and data analysis.

So Ask yourself, Are you genuinely interested in the financial markets? Do you read the Wall Street Journal for fun? Do you talk about investing with your friends for fun? This exam is brutal, and if you hate every minute of studying, ask yourself, if learning this stuff is so painful, are you actually going to enjoy a job that requires this knowledge?

If you really do enjoy investing, I think generally it usually is worth it. For me I think the material was worth learning no matter what. I’m more comfortable managing my own money because of what I learned, I understand current events much better, I like to talk about stocks, so I’m glad I did it. Any career benefit is just the cherry on top. But that’s just me

#cfa

TIMESTAMPS -
0:00 Intro
0:26 Concern #1
1:57 Concern #2
4:33 CFA Program Benefits