charterholders make twice as much loot in similar position as the non-charterholders? I remember that was one of their claims way back when… I am not well caught up on their marketing ploys these days, though I know they are blasting twitter updates faster than an HFT program… anyway, i hope they are not making the claim anymore cause that would be clear misrepresentation. which brings me to the next point… and if this has been discussed recently, please point me to the thread… has anyone done an NPV analysis of the charter in the current market setting? for all the brain of the people taking these exams, I can’t help but wonder sometimes if folks are missing the forest for the trees… myself included… Does the bubble like supply of new candidates in a shrinking demand for them not bother anyone? If I showed an annual enrollment chart without telling you what that chart was of, would you want to be long, short, or flat? Would a concept of representativeness come to anyone’s mind while looking at that chart? or mean reversion? look at the meaning of the charter when it was launched… ask yourself what the meaning of it is today and why people go for it… then think of the structural changes the markets has been undergoing the last several years and what capital markets may look like in the next 5 - 10 years… I hope it’s all worth it to everyone… I’ve had some fun participating despite set-backs… no regrets for sure… there’s certain value in this game I suppose… a little thrill if you will… but it seems the charter has become too important for some folks (not me)… I am not writing this as a knock… but reality check now and then not a bad thing… again, not saying it’s not worth it… just don’t think it’s worth what it used to… it’s presently trading above fair value imo, if I can make that comparison… as a value buyer, there are better deals out there I think… if you gonna skate where the puck gonna be, not where it is, there are definitely less crowded places to look out there…
For what it’s worth: I ve been doing simple searches on efinancialcareers.com in some cities with one key word each time: “CFA”, CAIA", “FRM”, “MBA” The number of hits (i know it is an information of limited quality, but still) has gone up for all of them over the last 6 months (too few data points, I know) Particularly true for LDN then NYC, then SGP Particularly pronounced for CFA It is still recognized and the idea that it is harder than before is clear for many people. Additionally, in my company (blue chip, bank) the number of people giving up somewhere in the way is significant.
I believe they last did the salary survey in 2007. Probably caught too much flack to do it again becaue I don’t think I’ve seen one since. Seeing as it is a survey it probably suffers from self reporting bias as well as outright lies as to what people are making. I don’t get the second half of your post. I think the CFA holds more value than ever. By way of example, during the most recent downturn it was exceedingly tough to get your resume in front of people without it. You were pretty much placed at the bottom of a pile of resumes.
Good point. I remember too that CFAI used to say that charterholders have a higher average income than non-charterholders. I think the point about the NPV of the charter has been thoroughly discussed in the many CFA vs. MBA threads. The NPV of the charter is definitely positive in most cases, since it costs only a few thousand bucks (for most candidates) and significantly increases your expected future income. Of course the program is getting more and more popular, leading to inflation of the value of the charter, but I think it’s still pretty exclusive.
if my assumption is correct, lots of new enrollment are from people wish to get into the business…so just by passing the exam, they can’t receive the charter, right? so you can have many many people passed the exam and hoping to get into the door and earn the experiences but people with actual CFA charter will still be relatively limited…it’s not like university of phoniex which just churn out graduates regardless… so the key is for CFAI to hold/check/verification of actual experiences; that is really the last line of defense of not diluting the charter. Not to discredit any people with mulitple credentials…as I earned my CPA many years back. but when i see some people’s business card with 4-5 titles, like MBA, $#A, **A, blah, blah…you may impress regular Joes on the street but for people in the business, the flip side is that you really have no clue what your want to do and just want to splash mudd against the wall and hope some will stick…
gregoirepost Wrote: ------------------------------------------------------- > Additionally, in my company (blue chip, bank) the > number of people giving up somewhere in the way is > significant. Yeah, I once read that only 10%-20% of people who start the program will eventually obtain the charter. And only 10% of those pass all exams on the first try…
Ok, so how do you go about shorting a designation? Spend your time elsewhere… no that would be long on the “something else”. You can only “calculate” the value of the designation to your personal situation - your attempting to determine the intrinsic value of the CFA program to me is a fool’s game. There is no “right” price as the “price” is full of ambiguity. I have no issue with your attempts to challenge the norm or seek validation of claims made, but I think that is for each individual to decide for themselves. Personally, my back of the envelope calculation of the NPV of the designation is positive in my situation.
all good points, guys… thanks… maybe NPV is not the right way of looking it… since the financial cost of obtaining it very low in absolute and especially in relative terms, it’ll likely always be “a good deal” from that standpoint… what I meant was in terms of long term total comp perspective, does it offer the same bump as it once did… I struggle to say yes to that one… Again, not saying there isn’t any worth there at all… just not saying I dig the trend…
blue chip bank = nice oxymoron!
against better judgement, I’ll chime in… First, why do people constantly feel like CFA is becoming a “bubble”? Enrollment is only up 5% year over year. Even growth from the dreaded Asia-Pacific region (pronounced Oh my god, I’m afraid to compete) is only up 7%. This doesn’t scream bubble to me, it says CFA is finally becoming a worldwide designation. With only about 100k charterholders, we NEED this kind of global adoption. Ask someone with lesser known designations (CAIA, FRM) if they wish their designation was better known. Name any other educational program that has about a 12-15% pass rate. Everyone wants to question the NPV of the program. How highly are you valuing your present time. Granted, I genuinely feel for those candidates with families. But seriously, how much tv time did you watch in the last year? How much time did you spend btching and moaning on internet forums or surfing porn? Most candidates are 20 somethings whining that they are actually having to study something for a change instead of coasting through. Welcome to real life, life-long learning or life-long unemployment. Here’s a thought, don’t wait 'til March to start studying. Maybe a little harsh. I’ve had the same doubts. This is your mind playing tricks on you because it would be easier to quit and just take what comes to you. This may be fine if your last name is Hilton or if you don’t mind mediocrity. Otherwise, suck it up!
joehogue Wrote: ------------------------------------------------------- > against better judgement, I’ll chime in… > > First, why do people constantly feel like CFA is > becoming a “bubble”? Enrollment is only up 5% year > over year. Even growth from the dreaded > Asia-Pacific region (pronounced Oh my god, I’m > afraid to compete) is only up 7%. This doesn’t > scream bubble to me, it says CFA is finally > becoming a worldwide designation. With only about > 100k charterholders, we NEED this kind of global > adoption. Ask someone with lesser known > designations (CAIA, FRM) if they wish their > designation was better known. Name any other > educational program that has about a 12-15% pass > rate. > > Everyone wants to question the NPV of the program. > How highly are you valuing your present time. > Granted, I genuinely feel for those candidates > with families. But seriously, how much tv time did > you watch in the last year? How much time did you > spend btching and moaning on internet forums or > surfing porn? Most candidates are 20 somethings > whining that they are actually having to study > something for a change instead of coasting > through. Welcome to real life, life-long learning > or life-long unemployment. Here’s a thought, don’t > wait 'til March to start studying. > > Maybe a little harsh. I’ve had the same doubts. > This is your mind playing tricks on you because it > would be easier to quit and just take what comes > to you. This may be fine if your last name is > Hilton or if you don’t mind mediocrity. Otherwise, > suck it up! personally, between watching stupid reality tv show and studying for cfa, I think everyone should be ordered to study 
the society would be better off for it as a whole … as far as the bubble, it’s not just enrollment… you are right, enrollment is not growing that much in %% terms. but look at the absolute increase in the number of people passing Level 3 each year… it’s massive. This year I am guessing between 25-30K sat for L3, no? Say 40% will pass. Compare the absolute # to that of 10 years ago… How does this stack up?
nailit Wrote: ------------------------------------------------------- > joehogue Wrote: > -------------------------------------------------- > ----- > > against better judgement, I’ll chime in… > > > > First, why do people constantly feel like CFA > is > > becoming a “bubble”? Enrollment is only up 5% > year > > over year. Even growth from the dreaded > > Asia-Pacific region (pronounced Oh my god, I’m > > afraid to compete) is only up 7%. This doesn’t > > scream bubble to me, it says CFA is finally > > becoming a worldwide designation. With only > about > > 100k charterholders, we NEED this kind of > global > > adoption. Ask someone with lesser known > > designations (CAIA, FRM) if they wish their > > designation was better known. Name any other > > educational program that has about a 12-15% > pass > > rate. > > > > Everyone wants to question the NPV of the > program. > > How highly are you valuing your present time. > > Granted, I genuinely feel for those candidates > > with families. But seriously, how much tv time > did > > you watch in the last year? How much time did > you > > spend btching and moaning on internet forums or > > surfing porn? Most candidates are 20 somethings > > whining that they are actually having to study > > something for a change instead of coasting > > through. Welcome to real life, life-long > learning > > or life-long unemployment. Here’s a thought, > don’t > > wait 'til March to start studying. > > > > Maybe a little harsh. I’ve had the same doubts. > > This is your mind playing tricks on you because > it > > would be easier to quit and just take what > comes > > to you. This may be fine if your last name is > > Hilton or if you don’t mind mediocrity. > Otherwise, > > suck it up! > > personally, between watching stupid reality tv > show and studying for cfa, I think everyone should > be ordered to study the society would be better > off for it as a whole … > > as far as the bubble, it’s not just enrollment… > you are right, enrollment is not growing that much > in %% terms. but look at the absolute increase in > the number of people passing Level 3 each year… > it’s massive. This year I am guessing between > 25-30K sat for L3, no? Say 40% will pass. Compare > the absolute # to that of 10 years ago… How > does this stack up? its an influx of Chinese and indians kid. Theyre taking over the world!!
Ok, say 10k pass worldwide. Is that really a measurable increase that is bound to drive absolute supply up (and hence, price down)? How many wrote level 3 in new york? In my city, there were 18 (who showed up). Say 10 pass. Do all 10 have the work experience nessary? Likely not. Say 75% do and immediately qualify… 8 extra CFA in my city. The local charter has (guessing) no more than 200. I’m not overly concerned.
pass rates for the lIII are trending down. Last 5 yr avg 55% 01-05 65% 96-00 61% 91-95 75% Before '95 all years were above 70% pass rate, usually in the 80s Yes, more are receiving their charter than 10 years ago, but this is a function of more taking the exams. 45% of about 27,000 is still more than 75% of 10,000 If your argument is that there are too many on an absolute basis, fine. Make the exam harder than it is now. I put my time in and am confident I’ll pass, but make the pass rates lower than they are now and see how many people drop out/become disinterested. Make it impossible and kill the designation. It’s tough getting a job, CFA or no. The proof that it is still a respected designation rather than a diluted one ala MBA is the number finance postings requiring some level of coursework study and the number of candidates/charterholders receiving preference in interviews.
Look at how many charters they actually award each year, the number is very small on a global basis http://www.newcfa.org/#/map. Last year, 3,000 people in the US received their CFA charter, while 3,300 people received a graduate degree from a top 5 US MBA program.
CFA is still the best game in Finance town. I’d enter into a Swap where I’ll receive CFA charter and pay any other financial designation (CPA, CFP, FRM, CAIA, ChFC etc.).
The monetary cost of the CFA is trivial for the vast majority of candidates employed in finance, particularly those in developed markets. The opportunity cost is something to be seriously considered, however. I sometimes wonder how much more I’d be making if I had devoted all those hundreds of hours to business development. OTOH, that is a definite advantage of pursuing the designation in a down market; the opportunity costs are likely to be far lower.
I believe the value of the program will rise as more candidates come on the program. This is evident from qualifications like the ACA which did not lose value simply because there are more candidates seeking the qualification.
I live in Toronto, which has a high per-capita population of charter holders. The charter, or at least significant progress towards it, is increasingly becoming a basic requirement to just be considered for a first interview. So, the charter may no longer be as much about giving yourself a good chance of getting a top job, but rather becoming a hurdle just to be considered for the OK jobs…
Guys, get back to Quant Methods 1st Level: Correlation is not about causation If you have the guts and brains to pass CFA, this means you are pretty much a bit tougher (on average) than your usual co-worker. Meaning: you are a committed guy and those achieve a bit more on the job, too. Regarding titles, I remember the youngest equity partner in a law firm I worked fore, earning EUR 2 million and only did the bar exam, while other PhDs and LL.M.s where proud to do his sh***work for 90k So, gaining any title only is one part of why you earn a bit more, but it’s not the cause IMHO