How to decide if a CFA is the right choice for you

Tom Welsh
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FOR anyone with four years’ experience in the investment industry, there’s a qualification out there that proposes to provide you with the broad-based knowledge and skills you need to succeed in any job in the sector.

The chartered financial analyst (CFA) programme certainly has its supporters. Abraham Harris, analyst in global talent management at BlackRock, calls it “the gold standard” for investment professionals. “It offers a coherent understanding of the industry.”

But “it’s a massive undertaking,” Harris says. “It involves 300 hours of study per level.” And there are three levels over three years. He explains that, although BlackRock encourages its employees to undertake the CFA, it only does so following wide-ranging deliberation. “The employee must consider closely the outcome they want to get from the programme.”

So what do they consider? How should an investment professional decide whether the CFA programme is an investment worth taking?

Firstly, look at the alternatives. The CFA charter is just one of many educational standards on offer for financial professionals. Would an MBA, with its wide treatment of what it takes to thrive in business prove more useful? What about a simple MSc in finance?

Ed Bace head of education for Europe, Middle East and Africa at the CFA Institute, suggests looking at the curriculum. The CFA is “based on what current professionals consider important in a newly-qualified professional.” It’s different to an MBA, for example, because the course is written with a specific profession in mind, not just business management generally.

Secondly, consider why the curriculum might prove appropriate to your role. But think broadly.

The CFA programme is divided into three key levels. And each level considers four particular areas – ethics and professional standards, investment tools (quantitative methods, or financial analysis for example), knowledge of different asset classes, and portfolio management and wealth planning.

The key point is to provide a cross-section of how investment works, and Bace argues that this is to the CFA programme’s advantage. “It gives practitioners the broadest possible view of the profession.” Harris agrees. Even non-investment managers at BlackRock undertake the CFA. “It helps them understand how their roles fit into the wider picture. You’re often exposed to the sort of things the CFA covers, even if it isn’t specifically part of your role.”

You may be ambitious, and you may be angling for a transition from a back office role to something more client-facing. But, consider, thirdly, what limitations in your knowledge the CFA will not cover.

Will Goodhart is chief executive of the CFA Society of the UK. It runs its own qualification, the investment management certificate (IMC), which is licensed by the FSA and covers areas that the CFA programme doesn’t – like the UK’s regulatory environment, and how the UK investment market works.

Goodhart calls the IMC “an entry-level qualification, and a good grounding.” It’s certainly complementary to further development through the CFA programme, so consider first whether you are running before you can walk.

If you’ve weighed your options carefully, the CFA programme can certainly offer career advantages to the right candidates. But there’s a reason why employers or clients may view it positively. It’s difficult. As Harris says, “candidates must understand the impact it will have on their lives.”