Does CFA add value if you are doing MBA Finance?
Yes, and No. Let me explain.
If you pay attention in all your finance classes, and get all your concepts cleared in the major courses (accounting, financial management, security analysis, derivatives, portfolio management, fixed income, risk), then there is very little that a CFA can add to you content wise, from the aspect of what the recruiters need you to know. I know many friends who sailed through B-School with good finance roles/knowledge without ever touching CFA books. Also, remember that most finance jobs need only a sound knowledge of the basics and a good thought process.
What it does add is more knowledge of things such as Private Equity, VC, Pension accounting and so on. Are these areas really useful for placement interviews – not really. It does add to your knowledge though, and if leveraged the right way, might help you get an edge in your interviews. But most interviews never go to these depths, and so the utility from this aspect is limited to zero.
So how is it useful? It is useful from a shortlist perspective as most of us come into B-Schools with zero to very few finance 'CV Points'. Here, it helps differentiate your CV as it is a far more powerful point compared to NCFM/winning a stock trading game/etc. Particularly in a country where 90% of the students are engineers with no prior grounding/experience of finance.
Level 1/2 cleared candidates do get an advantage in summers and the same holds true for Levels 2/3 in final placements. It is just a way of showing the seriousness of your 'fin' interest to the recruiter. It shows you were interested to read 6 additional books and also splurge some serious cash! On the flip side, it also ensures that you have more to revise before your interviews, since when you claim to have cleared a certain level of the CFA program, you better know at least the major portions of that level pretty well. But increasingly, it is becoming a hygiene factor in many schools, and since the exam calls for more of diligence than brilliance, I expect this ratio to shoot up in the coming days - especially in schools which are not renowned for great finance placements.
As far as the impact/usefulness of the CFA is concerned w.r.t. the various finance-domain roles, it is a mixed bag. For roles such as Corporate Finance, Consumer Banking, Corporate Banking and Project Finance, the CFA may not be really relevant.
Compared to these, in the fields of Equity Research and Asset Management, a CFA will be a definite plus (both from a profile and a knowledge perspective).
Relevance to PE is really a subjective call, since often specific domain knowledge might also be sought after.
Investment Banking is again more a client-interaction role, and while the CFA might be a good add from a CV perspective, it may not really matter for day to day work.
Can you manage the CFA workload along with the course load?
I would think so. If you make the decision in time, and plan out your study, it should not be too difficult. Since the first opportunity for Level 1 is six months after you join school, your accounting and finance basics are already in place by then. For Levels 2/3, you can study in your summers. Yes, it might stretch you at times, but (a) it is far easier to get done with these exams when you are studying than while you are working, (b) if you clear them, you do stand to gain some of the benefits highlighted earlier.
How easy or difficult it is to manage is down to the individual. If you are someone who relies more on hard work than sheer brilliance, then you might want to start a little early (around Oct for the Dec Level 1, and around March/April for the June Levels 2/3), and stick to a plan. I say this because revising 6 books for a 3 hour exam (the second exam is essentially a repeat of the first one with different questions) can be quite painful and revision itself can consume a couple of weeks sometimes. If you are more of brilliant child, then you really don’t need much advice!
-Meet Kachhy
The author is an alumnus of XLRI School of Business & Human Resources (Batch of 2011). Currently working as a financial Analyst at Goldman Sachs Asset Management (Investment Management Division), he has interned with Axis Bank. Prior to his MBA, Meet worked for almost three years with J. Ray McDermott ME Dubai (an offshore EPC contractor in the O&G business), after completing his BE (Hons.) from BITS Pilani (Dubai) in 2006. He has cleared all the three levels of the CFA program.
If you are preparing for Summer Placements or Final Placements, please have a look at our Career Guide - The InsideIIM Career Guide
Summer Placements Prep – Finance Roles
Comments
Ankit
Great article. But I think CFA helps a lot even in Investment banking. I was in the US for training and a lot of people in senior positions were asked if CFA helps and the overall gist was that it does. Most people join as analysts at the start even in front end investment banking roles and its not client facing for quite sometime. People who have done a CFA/CA definitely have a great head start when analyzing balance sheets of companies for valuation purposes. But I do agree that corporate banking has not too much to do with a CFA coz thats what I do and no one in my team has even appeared for level 1.
11 Nov 2011, 10.35 AM
Pankil
Hi If you do your cfa, do you need an MBA then?
11 Nov 2011, 11.50 AM
+Read Replies (2)
Ankit
@Pankil - Front end jobs are hard to come even if you are a CFA in India/cleared level II CFA unless you have a top tier management degree. Over the years, due to lack of enough number of quality finance jobs competition is fierce. Also, there is an exclusivity mindset which makes people from top tier institutes to only let people from their own institutes get those jobs. Things should change as more and more jobs become available in India.
11 Nov 2011, 12.59 PM |
Karan
I know people who get absorbed in good banks in certain posts after clearing an L2. But for good progress along the way, an MBA is probably important.
14 Nov 2011, 09.06 PM |
Abhinav Tripathi
I`ve cleared CFA level-2 and have worked in a boutique investment bank for 1.5 years. As mentioned in the earlier posts, if you count on CFA alone, you might as well kiss goodbye to your chances of getting into a good i-bank. At best, you can get into another boutique investment bank or a back-end role at a big i-bank. Moreover, in India, if you want to get into a front-end bulge bracket role, only aim for IIM A/B/C. For the other B-schools, you can only get front-end roles in boutique i-banks/Indian I-banks (Yes, this also includes big names like other IIMs) I`ve worked in the industry so am giving the general idea of how the industry works.
29 Apr 2012, 07.58 AM
MKiing
Haha. Funny how you folks just think of how everything can be positioned to an employer. Employer employer employer. Come to the west, and you'll realize the number of fantastic money managers who don't even hold a degree in Business or Finance. You folks will just keep chasing qualifications to end up in a front office role at a BB I bank. Is your life restricted to just that? Think beyond that. And the CFA is great for Investment Management.
19 Jul 2012, 04.31 PM
Karthick V S
I would like to kknow if this CFA can be done before hand. i mean even before getting into a b-school?? and how long is this certification valid??
26 Aug 2012, 09.37 PM
+Read Replies (1)
@ykay
You can do it after your graduation/degree. It is valid for life.
27 Aug 2012, 02.59 AM |
vaibhav
Does clearing CFA L1 helps in IIMs PI?
5 Oct 2012, 01.27 AM
MBA Guy
CFA may not help at the B school level but does affect once you start toiling in the field.
12 Nov 2012, 04.34 PM
Vamsi
i would like to know if by clearing certain level of CFA would add any value in the IIM admission process?
12 Dec 2012, 11.29 PM
srikar
Very useful article :) Can you please enlighten us about FRM certification too. The opportunities for a person who completed CFA level 1 and 2 vs the one who finished FRM part 1 and 2. I know that CFA and FRM focuses on different parts. But I am uncertain about the job opportunities 'in reality' with the help of these certifications. I work as an IT support in Operations Risk field.
3 Jan 2013, 03.41 PM
shradha
can we do CFA along with our B-school? or is it necessary to first complete the graduation?
29 Apr 2013, 12.53 PM
tozca leather
http://www.tozcaleather.com
I extremely like to browse this submit, and I agree making use of the troubles in that creating. I suppose appropriate in this article is one of the superb impression. I'm intending there is to do some thing you would like to once watching. <a href="http://goo.gl/5mVstL" rel="nofollow">tozca leather</a>
15 Jun 2014, 04.05 PM
Riya Dingria
Anyone Please Help Me I Want To Study MBA+Cfa Together And I Want To Settle In Abroad. Whether I Get Any Kind Of Job Opportunities In Abroad After Doing Cfa +mba
5 May 2016, 09.29 AM
+Read Replies (1)
Team InsideIIM
We are the team behind your favourite platform.
If you want to settle abroad - there is a higher probability of you being able to do that by doing your MBA/Masters abroad than in India.
10 May 2016, 12.10 PM |