5 things you must know before attempting CFA

So, you got admission in MBA and are now looking for certifications to add value to your CV and enhance job prospects. You notice a lot of your peers attempting CFA. Since you don’t see a lot of CFA alternatives, you decide to go ahead with it.

But hold on!

What do you expect to achieve from a CFA certification? Are you:

  • Looking to add value to your CV and get shortlisted for interviews
  • Hoping that a CFA certification would open up new job prospects
  • Looking to get recruited at a higher pay scale?
  • Trying to upskill yourself to crack interviews?

Before you climb the bandwagon, it is important to understand, whether getting a CFA certification would actually be beneficial for you or not. For more clarity, here are five things you MUST know about CFA before attempting it.

1. You don’t become a Charterholder even after clearing all three levels of the exams

To become a CFA Charterholder, you need to fulfill the work experience criteria too.

This requires you to have at least four years of experience in the investment decision-making process or in roles that directly affect this process.

Your work experience is counted regardless if it was before, during or after clearing the three levels. However, internships don’t count as relevant work experience.

2. CFA has a lower ROI than most other certifications

In 2018, nearly 70,000 students cleared the CFA level I exam. Since the pool of CFA level I certified candidates is pretty large, they are not given any special preference or higher pay.

Level I costs Rs. 45,500 – 96,000 depending on how close to the exam you register. This is excluding the one-time program enrolment fee that is Rs. 31,000.

Level II certified candidates might get some preference over others. As per reports, in some cases, they may get an average of 10%-20% higher pay than other non-CFA candidates.

Level II can cost you around Rs. 49,000 – 1,01,500 depending on how close to the exam you register.

It’s only after clearing CFA level III do you actually see a significant impact on both pay scale and job prospects.

Level III certified candidates are given preference while being shortlisted for investment management roles and even get a higher pay scale on an average.

Level III costs you Rs. 49,000 – 1,01,500 depending on how close to the exam you register.

*All the above costs are one-time exam fees. In case you don’t clear the exam in the first attempt, you will have to pay the fee to register for the exam again.

3. CFA requires a significant time commitment

As mentioned earlier, it’s only after clearing all three levels of CFA that you see a significant impact in your career.

However, this doesn’t come easy. As per the CFA institute, candidates should dedicate at least six months and a minimum of 250 hours of preparation for each level.

Students, however, report on studying at least 320 hours on average for each level. The passing rate for each exam is approximately 40-45%. In case you don’t clear the exam in the first attempt, then you will have to go through the preparation phase all over again.

MBA students attempting CFA exam

4. Getting a CFA doesn’t guarantee a job

Clearing at least two levels of CFA does add value to your CV. However, similar to any other certification, a CFA does not guarantee you a job.

A CFA is a great qualification for anyone interested in building a career in investment management. However, this job market is quite small and can get highly competitive. 

This is primarily because, for these jobs, you are most likely competing with other CFA qualified candidates. Hence, it is essential to come up with additional ways to showcase your skills and drive the interview in your favor.

5. CFA is a theory course that doesn’t teach practical applications

A CFA will help you secure an aspirational finance role ONLY if you learn to practically implement the theory taught in it.

CFA is an extensively theoretical course that has practical applications. But these applications aren’t taught to you in the course.

To learn how to practically apply these concepts, you will either have to take up side projects or another course to learn it and showcase your job readiness.

If you’re taking up CFA purely from a job perspective, then it’s important to put in more work than just clearing the exam.

5 things you must know before attempting CFA

Best Alternatives for CFA

CFA qualified candidates and Charterholders typically get into the following finance roles:

  1. Research Analyst
  2. Investment Consultant
  3. Corporate Financial Analyst
  4. Financial Advisor
  5. Portfolio Manager
  6. Risk Manager

If you’re planning to take up CFA from a job perspective, the following certifications will be great CFA alternatives to add value to your CV and also drive interviews in your favor.

I. FLIP Investment Banking

The FLIP Investment Banking is a combination of two industry-recognized certifications: FLIP-NCFM Issue management certification and the FLIP Private Equity and Mergers & Acquisition certification.

One of the best CFA alternatives, this course covers all major aspects of Investment Banking and equips you with the practical knowledge to secure a job in an Investment Bank.

FLIP Investment Banking certification details

View more details here: FLIP Investment Banking Certification

II. Chartered Market Technician (CMT)

The Chartered Market Technician (CMT), provided by the CMT Association, is a professional certification in Technical Analysis. 

There are three levels of exams that have to be cleared to become a CMT charterholder.

CMT certified professionals are priority applicants for trading roles in hedge funds, portfolio managers, and risk managers in investment banks.

Chartered Market Technician certification details

View more details here: Chartered Market Technician Certification

III. FLIP Research Analyst with Financial Modelling

The FLIP Research Analyst with Financial Modelling program trains you in both technical and fundamental analysis along with financial modelling and valuations.

This is another one of the best CFA alternatives for those looking to build a career in Research Analysis at Investment Banks or Research Advisory firms. The course is a combination of the FLIP-NCFM Equity Research certification and the FLIP Technical Analysis certification.

FLIP Research Analyst with financial modelling certification details

View more details here: FLIP Research Analyst with Financial Modelling Certification

IV. NISM Investment Adviser

The Investment Adviser certification is given by the National Investment Securities Markets (NISM). This certification program consists of two levels.

The objective of the exam is to ensure that the candidate has the basic benchmark knowledge of asset allocation, portfolio construction, product selection, compliance, etc.

NISM Investment Adviser certified candidates are suitable for portfolio management roles or investment consultant roles.

NISM Investment Adviser certification details

View more details: NISM Investment Adviser Level I; NISM Investment Adviser Level II

Hopefully, this gives you a little more clarity about the path that benefits you the most. In MBA, it is crucial to work smart to ensure a better future in finance.

All the best!

5 things you MUST know before attempting CFA (and top CFA alternatives)

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