damn! cfa a prereq http://www.advisor.ca/news/article.jsp?content=20070913_145835_6004 Demand for the Chartered Financial Analyst designation is booming and, as a result, industry observers say the CFA is fast becoming a prerequisite for investment management rather than the gold standard. Earning a CFA is no longer an express ticket to an executive office and six-figure paycheque. These were the findings of a panel of industry experts assembled by Concordia University’s Goodman Institute of Investment Management’s MBA/CFA program, to discuss the CFA’s place in the industry. According to Peter Simon, a finance officer with executive search firm Spencer Stuart, the CFA doesn’t distinguish candidates to the degree it once did and has, in fact, become the baseline credential for anybody looking to become an investment analyst or to manage any substantial amount of money. “We actually don’t care about the content of the CFA,” says Simon. “It’s increasingly just a ticket to the game.” -------------------------------------------------------------------------------- Advertisement -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- That ticket is becoming more common. Global demand for CFAs is unprecedented, particularly in China and India. But a CFA in those regions earns substantially less than those in markets like Toronto, where the median CFA compensation is $150,000 a year. “A fully loaded India-based CFA likely costs about $15,000 US a year. That’s their annual compensation,” says Simon. “At current rates of growth, within seven years, there should be more CFAs in China and India than there are in North America.” With a much larger pool of CFAs willing to work for less than their western counterparts, Simon says, future CFAs will need to strengthen their communication and leadership skills if they want to obtain the same level of achievement that most of today’s CFAs currently enjoy. One area where many CFAs are now looking to expand and carve out a lucrative niche is in private wealth management. “The majority of CFAs will likely remain investment analysts and portfolio managers, but increasingly on the client service side, there is an expectation for CFA skills,” says Simon. According to the Toronto CFA Society, currently about 9% of the CFAs in Toronto work in private wealth management, but in many high-net-worth firms, the bulk of the asset management is conducted by CFAs. Bob Gorman, himself a CFA, is the chief portfolio strategist for TD Waterhouse. In the early 1990s, he established TD Private Investment Counsel, which manages upward of $13 billion in assets for HNW clients. Gorman estimates that more than 90% of the advisors who manage Private Investment Counsel’s customized portfolios have the designation. “Having your CFA or being enrolled in their program is pretty much a prerequisite at this point for us,” Gorman says. “In combination with good interpersonal skills, which are extremely important when dealing with private clients, the technical skills you pick up from the CFA and experience help to combine to create a really good [private wealth] portfolio manager.” As for CFAs taking on the role of the retail advisor, at this point it seems unlikely, given the typical compensation CFAs can demand. Citing an upcoming study from the Institute on global CFA salaries, Charles Tschampion, director of industry relations for the CFA Institute, says compensation in Canada lags behind that of most industrialized nations, but a middle-of-the-road CFA in Canada can still expect to earn $150,000. Average salaries vary even within Canada, Tschampion says. A CFA in Toronto can reasonably expect to earn $165,000, while a CFA in Calgary is looking at about $180,000. Compensation jumps dramatically if the CFA is managing assets. “For portfolio managers, Toronto is the highest paying in Canada at $251,000; Montreal is second at $223,000; and Calgary is third at $187,000,” Tschampion says. This all pales in comparison to global financial hubs such as London and New York, where the median salary for a CFA is more than $250,000 US. “Canada globally ranks eighth out of 10 countries we tracked, although it had the second highest percentage increase at 31%. About a third of that is due to the increase in the Canadian dollar,” Tschampion says. “Except Calgary, all the Canadian cities are below the equivalent of $150,000 US, and are grouped in the bottom-earning category with Shanghai, Beijing and Munich.”
Probably have to agree, somewhat. The CFA Letters after your name are a prerequisite to having sound knowledge of finance. But what sets people apart can’t be taught or studied. It’s the intangibles, like drive, motivation, people skills, sales, team work, desire to learn, confidence and humility, and more.
shawnyv Wrote: ------------------------------------------------------- > “A fully loaded India-based CFA likely costs about > $15,000 US a year. That’s their annual > compensation,” says Simon. “At current rates of > growth, within seven years, there should be more > CFAs in China and India than there are in North > America.” A little out of context. 15,000 US is ALOT of money in India.
I’d love to know how many of the people taking the CFA in India and China are currently in positions of acceptable work experience. Probably a much larger percentage than people in North America.
That’s true, but just getting in the game is all I need frankly. I will rely on my intelligence, work ethic, sense of humour, liver and above all else good looks (jk) to take me the rest of the way!
hehe way to go halifax! liver, lol im not totally surprised by the article, even one day it might be like having a CSC in canada. almost a scary thought though.
the article mentions the value of the CFA for HNW PM jobs, but that it is unlikely it will flow to the advisor position. ( I assume this is more a CFP role). how is the role of a HNW PM different from a financial planner? Seems to me like it would be very similar.
CFAdetroit Wrote: ------------------------------------------------------- > the article mentions the value of the CFA for HNW > PM jobs, but that it is unlikely it will flow to > the advisor position. ( I assume this is more a > CFP role). how is the role of a HNW PM different > from a financial planner? Seems to me like it > would be very similar. its different. financial planner is more personal. HNW clients would expect you put in some kind of effort to building a more suitable/customize portfolio to suit their needs and retail clients are fine with mutual funds. you cant build a portfolio for someone wanting to deposit 1000, nor would you be willing to do it.
>how is the role of a HNW PM different from a financial planner? Those with $50k in assets have very different needs than those with $50m in assets. The former need to examine insurance sufficiency, cash flow planning, retirement planning. The latter focuses more on preservation of capital and estate issues. Latter also has access to many more asset classes & investment vehicles.
Financial Planners are way different from HNW investment advisors. Financial Planners deal with products. They sell annuities, they often tout 529 plans and many sell insurance. They serve a different audience. Their claim to fame is a “one stop shop” - they do anything and everything. my 3 cents.
shawnyv Wrote: ------------------------------------------------------- > > im not totally surprised by the article, even one > day it might be like having a CSC in canada. > almost a scary thought though. I wouldn’t go that far. alot of bank tellers have the csc!
Being a CFP, and having worked as a financial planner both on commission base and fee base, and for an IA managing HNW Private Investments; I can tell you the two have the same basis but very different. I have to say your HNW client usually has their Fee based financial planner who puts the big picture together for all matters (estate planning, retirement planning, tax planning, insurance planning, etc…). Once the Plan is done they are usually refereed to an expert for each area, such as an Accountant, Insurance Agent, Lawyer, etc… The best practices I have seen is firms where IA or Private Money Manager has close ties or even in some cases experts on staff. A financial Planners job differs based on the company he/she works for. On the retail level they usually take on clients with assets of 100k-300k, anything below 100K and they do not touch it and anything over 300k it has to be referred to an IA. They are also very limited when it comes to portfolio customization; they can not sell anything but MF. Some retail FPs even do you everyday banking needs such as mortgages and lines of credit. I personally am in search of getting the CFA to get into wealth management / portfolio management. I wanted to have the edge but its evident now its just a requirement. I would be happy to pass the next two levels and finish it though so I can move on to the next milestone (Ivy League MBA).
That’s why you do CFA and MBA. In about 20 years a Phd will be the equivalent of a MBA. Sounds like it’s almost time for a new designation to be created!
Well now days just any MBA will not do it anyway. MBA programs are dime a dozen, so you really have to do a MBA from top school. But the damn things are very pricy, that’s after you get in, if you get in.
I think what this article underscores is that you need your CFA but you also need to DO something with it. Willy
thats cool, i always wanted to be a client facing cfa, managing UHNW clients, if not a consultant.
i’m not at all surprised about this finding. Like i was saying before, CFA WILL become something like the CSC. everybody who works in the industry will have it more then not. I’m saying this because even at my low level job, everybody is taking it and i expect anybody who is above should and will have the designation. there is only 1 way to distinguish yourself now, performance, not in tests, but in real life. Tpain, the PHD is already a watered down version of what was once an indication of intellectual superiority. its not at all difficult to get a PHD from a lower ranking school. however, real doctors of philosophy will still be valuable and inaccessible to the masses. N Van, you seem to have the experience. I’m wondering why you feel you need an MBA to get a job (that seems like the only reason for you to get it). at your level, shouldn’t you be able to speak to the right people and show them that you have the talent to perform rather then getting another piece of paper?
WillyR Wrote: ------------------------------------------------------- > I think what this article underscores is that you > need your CFA but you also need to DO something > with it. > > Willy when i get mine, i think i’ll have a picnic with it. and in the winter, i’ll take it snowboarding with me (dont worry. i will make it wear a helmet).
well what did u guys expect after CFAI allowed non college graduates to take level 1?
bmw, i don’t think letting non college graduates is a bad thing. it actually makes things more fair for those that didn’t have the opp. to go to university or college. if a non-college grad can pass it, all power to them because they problably deserve it a lot more then someone who went to college. from the people i met in college, they don’t stand a chance at the CFA so i don’t think letting them take the test is a bad thing. keeping people out for reasons outside of merit is just unfair. CFAI should just make their exams harder point blank. that’s the only way to fairly reduce the number of charter holders while keeping the “gold seal” reputation. raise the min. to 75% and watch how many people take L1 and never come back.