My wife, family, and most of my friends have no idea what the CFA is or the work it requires. I’ve been studying for only about three weeks for the first level and the topic has already come up several times. Typically, the response I get when I say I’m studying for the CFA is, “Oh, that’s nice. What’s the CFA?” I never quite know what to say to this in order to express just how much work it takes. I especially want my friends to understand so it won’t be a big surprise when I bail on things like golf, drinks, etc. in order to study.
Does anyone else care or have a good response to this?
It’s hard. I sometimes say that “It’s a bit like the CPA exams, except that it is designed for financial analysis, investment, and portfolio management.”
That generally gets them in the ball park, because most people know someone who is a CPA (or whetever the local equivalent is). After they’ve gotten there, one can talk about how it’s not a regulatory thing like the CPA, but requires roughly similar levels of effort to pass. How accounting tends to be about preparing accurate (or at least defensible) statments of what happened, whereas financial analysis is taking that data and trying to make defensible asessments about the company’s future, etc… It’s a successive-approximation kind of approach.
Ultimately what’s important to communicate is 1) what kinds of things the exam is for, 2) the level of effort required to pass, and 3) what one hopes to achieve after putting in all that work. There are far fewer CFA Charterholders than CPAs (and their equivalent foreign designations) in the world, so that’s one reason why people haven’t heard of it.
Last week I got an e-mail from the local chamber of commerce about the CFA cat show over the weekend. Thank goodness I was able to forward it to the local CFA society in time; the charterholders certainly wouldn’t have wanted to miss that.
A CPA buddy who convinced me to sign up said, “it’s 3 test, you don’t need any prior knowledge like CPA, you sign up, they send you a couple books that have everything that’s on the test, you read them and go take it. Takes 2 years, like an associate degree.”
I was less knowledgable than him (I was non-industry and I don’t think I had ever met a charterholder in my life before) so I said, sounds easy. When I got the books in…
My personal favorite is "Oh, my “guy’ is a CFP. Is that the same?” Question can’t be answered without a) sounding like a complete tool or b) doing the charter a complete disservice.
Last month I was at a Christmas party talking to a couple of MS product pushers, sons of the BSD in the room. They hadn’t heard of the CFA designation. Hard enough trying to describe it to them. They did bring up how hard the Series 7 was. Feel free to share how you would have responded. I changed the subject even though the BSD thought I should talk “finance” with his sons.
I think you can answer it without sounding like a tool. Whenever someone asks me about the relative difficulty of CFP or Series 7, I say that while those can be challenging and worthwhile pursuits, the CFA is just on a different level in terms of difficulty. Since I took the Series 7, I can say that from personal experience and I also have met people who have earned both the CFP and CFA charter, and they say that there is no comparison.
I’d have said, “You’ve passed the Series 7? Maybe you can help me with something. I’ve never quite understood the formula for valuing a currency forward contract; will you please explain it to me?” Or, “Can you run me through the arbitrage transactions that underlie the pricing of an FRA?” That sort of thing.
Yeah, a big part of my problem is that I work for a broker/dealer where pretty much everyone has the 7 and other “series” licenses. It’s just my ego talking, but I don’t want everyone to think of it as just another series exam.
I like the “gold standard of finance designations.”
“Imagine all the studying you did for the Series 7 exam. Now imagine that the exam is 6 hours long and that you’ll need to study like that for two or three months before you have a decent chance of passing it. Then do it two more times in increasing detail before you’re done. That’s the CFA exam.”
It’s the stock broker licensing exam here in the US. A lot of people here will compare the CFA exam to the series 7, by saying “yeah, I can relate, I had to study intensely for my Series 7”. Series 7 has more requirements for knowledge of regulatory rules, which would make sense, given that you need it to operate in a certain capacity in a regulated industry.
Obviously if it’s someone who wouldn’t know or care about the Series 7, then you don’t use that comparison.
Yes. Just like I’ve heard quantum physics. But I have no idea what that really means or how much effort goes into it.
I studied for my Series 7. And it’s certainly pumped up by the retail advisors as the “cream of the crop” of exams. I think this is partly because most retail advisors have never really taken another exam. (This was the case in my situation.)
And if someone asks you what CFA is, just tell them that you’re studying the management entrance exam for Chick-Fil-A.
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