The CFA charter is a widely respected designation for most any position in the financial services industry. Level 1 and Level 2 are birds eye view approaches to the different aspects of finance, covering everything from derivatives to alternative investments to small busines valuation. The curriculum rounds out financial knowledge, and is applicable to any financial services professional.
The Level 3 curriculum is misguided. It forces candidates to cover portfolio management in detail, which is not applicable to many candidates. I work in corporate development where the CFA charter is still respected, but nothing in this level’s curriculum has anything remote to do with my position.
The CFA institute should make the Level 3 curriculum a “concentration,” where the candidate chooses which path he wishes to pursue. There could be plenty of different concetrations: Portfolio Management/Wealth Planning, Trading, Investment Banking/Corporate Development, Real Estate, Equity Analysis. This would give the CFA program wider respect among the different sectors in financial services. Thoughts?
would you like ohai to call the wah-mbulance ?
Hope. It is the quintessential human delusion, simultaneously the source of your greatest strength, and greatest weakness.
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I think you misunderstood the intention of the post which was to generate discussion.
That’s cool until you remember that CFA means Chartered Financial Analyst, and your entire argument is that you think the CFA curriculum shouldn’t focus on financial analysis…
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So portfolio management is the only profession that does financial analysis?
Short answer: yes.
If you don’t like the curriculum, or you think it’s not relevant to your field, you probably shouldn’t do it. How could you possibly feel justified demanding that an entire organization dedicated to investment management change their focus to something you like better?
Well, a lot of the L3 syllabus does seem like “filler” content. Take the “PnL attribution” chapter for instance. Wtf is that crap?
However, from a bird’s eye view, I think the entire CFA syllabus is pretty well balanced. Lots of CFA people are FA/RIA/AM types, so it makes sense to have a significant section devoted to investment management. Sure, they could have spread it out across three levels instead of having it dominate L3. But maybe they thought that they should cover the more fundamental stuff (FSA, economics, etc.) in earlier levels.
Having multiple mini-CFA concentrations is an interesting concept, but it’s not appropriate for such a shallow program. Most people would agree that the CFA program’s purpose is to give you a cursory understanding of a wide range of finance topics. If the program were to focus more on specific sections, it would have to become less holistic, thus changing its purpose. Furthermore, many people would focus on the topic that they are already familiar with. So, the program would be less beneficial, as people would be exposed to less new knowledge.
“I’m a CPA! I got money b***h!”
I hate Level 3. I agree with everything he said. This is so worthless and boring, and every moment I spend with it is wasted. I could be you know getting better at investing, but here I’m learning random shit.
Gahh I’m pissed.
Cities teem with evil and decay, let’s give it a good shake and see what falls out!!
Actually, if you work at a fund-of-funds, it’s used quite frequently on a regular basis..
But to many other professions.. I agree. it’s useless dung
Hope. It is the quintessential human delusion, simultaneously the source of your greatest strength, and greatest weakness.
Speaking of which, how well if CFA respected/recognized say in corporate finance?
^Often times, the level or degree of respect the charter garners from employers is directly linked to those persons in decision making or hiring roles also being charterholders. Or even better, if someone who is a superior has tried and failed to complete the program. I think a safe rule of thumb is if your manager is a charterholder, if can only benefit you to become one as well.
PnL attribution is filler content? It’s what I do at work…
CFA is for investment management. I like that, it’s not an MBA, it’s a strictly investment management curriculum. LIII is not bull, PM and portfolio analysis are pretty central to investment management. Don’t sign up for an investment management progam then get pissed when it covers PM extensively and doesn’t act like an MBA. I’m glad they don’t have variations, it’s standardized, that’s nice, and it’s consistent. People don’t have to ask “what was your concentration”. Also, the logistics would be a nightmare. Frankly, I think it’s a pretty dumb complaint.
I used to smoke pot and go to class.
Sneak in ten minutes late with a bullsh*t excuse.
Slink down low at my desk.
Pray to god nobody asked me any questions.
I was the best teacher ever.
A lot of the CFA curriculum doesn’t apply to my job (business valuation), but a lot of it does. That doesn’t mean the parts that don’t apply are BS.
You can fondle the cube, but it will not respond.
I don’t think the attitude, if you don’t like it, you shouldn’t do it is the proper response. Obviously, if the guy is studying for level 3, he’s made a substantial commitment already.
I thought the Level 3 curriculum was tough, like the kitchen sink was thrown in. However, I don’t think it should be replaced. It made me think about things I hadn’t thought of before.
Alternately, it would make more sense to offer supplemental exams (rather than replacement exams) that would allow people to specialize. I would doubt people already with CFAs would pursue these specialization, but I don’t think it’s a terrible idea.
The L3 stuff has come up with me a lot. Attribution got thrown at me at one point in my work. GIPS gets thrown at me (yuck). Trading issues get thrown at me to answer. Optimization work is pretty common, although I don’t usually do a full optimization at my shop, it’s still important to understand and field questions about when to use it and what some of the limitations are.
I like jmh’s idea that, once one has completed the CFA, one can then do specialization work. To some extent, they are doing that with CAIA and CIPM, though by making them alternate examination routes entirely.
If only L1 and L2 is relevant to your work, and you don’t think you’d ever do more than analyze a stock or a company, then it’s not necessary for you to do L3, and you are perfectly justified in not taking that exam. The extra letters won’t help you much anyway if that is all you are going to do for the rest of your career, probably.
You want a quote? Haven’t I written enough already???
I say this is the perfect opportunity for the CFAI to establish L4, yeah baby!
Oh god no.. don’t even joke about that..
Hope. It is the quintessential human delusion, simultaneously the source of your greatest strength, and greatest weakness.
Hey IEV, go f#$& yourself.
Seriously though, I think the CFAI should allow people to take L3 only if they have their experience approved, or at least say 24 months. Nobody benefits from the random tech dude finishing all three levels if he’s as far of actually having a relevant role managing money as I am of being drafted by the Steelers this year.
Sour grapes brah!
No quote needed
Well, they don’t give you the charter until you have 4 years of work experience. So, I guess they are keeping the unwashed hordes out of official membership. Restricting people from taking the test would just be separating them from the knowledge in the curriculum.
I agree that “random tech dude” often has no business taking CFA exams. But then again, there isn’t really any downside except to that person. So, I’d just let them do what they want.
“I’m a CPA! I got money b***h!”
I’m in corp finance, too (strategy & bus dev, for what it’s worth). I don’t use a ton of L3 material on a day to day basis, but, when you take a step back and understand why we’re buying or selling these companies / business units / whatever, it really is just portfolio theory.
There’s no way they would require a experience approval before allowing someone to take L3. Why?
$$$$$$$$$$$$$$$$$$$$$$$$
Why would you deny yourself the bountiful harvest of candidates very willing to pour a lot of money into your lap? there’s no worries of dilution anyway if it’s some random guy working in technical support.
Hope. It is the quintessential human delusion, simultaneously the source of your greatest strength, and greatest weakness.
Why not? I cleared level three prior to that point too. I am now at 43 months approved so I am almost there. But taking the exams early actually proved to be very fortunate for me, as my mother has become seriously ill the past year and I can’t imagine studying now…
Maybe for someone else it will mean having more time later on to spend with a baby (for example).
Everyone is on a different track, if random tech guy can master the material enough to pass, good for him, let him do it. The institute makes money, and if RTD manages to get the right job, he can earn a charter too, once all requirements are filled. The only guy with downside risk is RTD. Or, are we afraid that he might prove to be better than us!?!?
As for the main theme of this thread, I am direct investment, but I think a lot of the L3 curriculum was worthwhile.
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I couldn’t disagree more with this thread.
You knew what you were getting into when you chose to start working towards the CFA charter. If you don’t like it you should have done a different professional qualification.
The CFA designation is specifically for investment management. That is why it is the “gold standard” in the investment industry.
I agree with you conceptually, but one of the near certain unintended consequences would be disparities in the perceived difficulties of the various tracks.
A number of candidates would invariably try to game their way into the ‘easy’ track. Even if your specialty happened to fall into the easy track and no gaming was required, then the people that naturally fell into the hard track and failed would be (rightly) bitter that the two exams achieve the same end.
For the sake of the exam’s integrity I disagree with you, but in my personal career I see no downside to replacing all of the GIPS with fixed income or swaps.
The CFA Program provides a introductory foundation for a variety of topics in the investment industry. I like that and I don’t think it should change.
It’s meant to be an overview of key topics and knowledge in the investment industry, and gives you a baseline set of skills. It is not designed to provide in-depth, detailed knowledge of very specific topics. If that’s what you want, there are other programs (CAIA, CIPM, FRM, etc.) that are much more focused than the CFA program.
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i registered just to reply to this comment..
what do you mean?? are you saying the tech guy doesnt have the right (background/profile/pedigree/sophistication/intellect) to work in the front office/investment management? as far as im concerned.. if you can pass lvl3 even lvl2 regardless of work experience.. you are so far ahead of 50% of “financial analysts” in this world.. its ridiculous.
how can you argue that someone who has passed lvl 3/2 is NOT QUALIFIED to work AT LEAST in equity research?
in developing countries right now (Brazil for sure) there are 22 year olds that barely have a bachelors degree and are practically working as portfolio managers with $100m accounts. ive seen it countless times and frankly alot of these operations are amatuer. now that same kid in a few years will have figured out how to follow beta with absolutely no alpha but is very happy with his 2%.. he has no incentive to get the CFA.. he already made it. but is still an idiot.
now the tech guy on wall st. just went from being the operations monkey to more useful than the fresh out of a top 10 college finance undergrad just by passing 3 exams.. its that easy.
First off, passing L2 is definitely not “so far ahead” in the world. You don’t know what you’re talking about. A great many highly experienced people don’t even go for the CFA, and it’s a joke to think you can match any unexperienced L2 kid against them.
And 2nd, I call BS on the “coutless 22 yr olds managing $100M”
Hope. It is the quintessential human delusion, simultaneously the source of your greatest strength, and greatest weakness.
Yeah the Brazil comment… no.
“I lost my wife to a margin call. Wives get mad when you come home and say, ‘Sweetheart, I lost the house today.’” - Dennis Gartman on trading mistakes
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