December 17, 2009, 5:35 am

Answer a reader’s question: Need advice on CFA

by: The Financial Blogger    Category: Career
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We recently received an email from Jim (fake name) who has some questions about the CFA program. Since my best friend and partner is a CFA (Intelligent Speculator), he was kind enough to answer him. Here’s the email:

Hi,

If you can help in any way, i’ve got the following problem

I’m currently working as a back office developer for a commodities brokerage firm, in all with 6+ years of software dev experience.I’ve been looking to move out of the development role but have really not figured out which way to go, but to make it easier for you 🙂 have decided to stay in the finance domain.

MBA seems to be an obvious choice you would think! Being married and planning a kid soon, not to mention the tough financial condition at the moment, dont think its a viable option for me at the moment!

Is it beneficial in “any” way whatsoever for an IT guy to do CFA. Now, i’m not talking about becoming a fund manager, but may be a business analyst? Will i benefit in anyway in short or long term?

I know that probably MBA would open more doors for me, and CFA would probably put me in a tight spot with limited options, but i just cannot go for an MBA … is it even worth considering CFA, or would you suggest spending that time in coming up with option 3 (if there is one!)

The reasons why i still want to stick with this option is .. well … ’cause its the only one around … and for the following reasons too:

1) Better than leaving job and doing MBA ( VERY BIG ADVANTAGE )

2) Want to stay in Finance line throughout

3) Not that costly (at least in comparison to MBA)

5) Might be able to change domains or functions after completing Level 1 (1 year) unlike MBA where you are out of workforce for 2 years

6) Reputed and recognized all over

Any comments/advice highly appreciated!

Many Thanks

And here’s what we have to say:

Hi Jim,

Mike forwarded me this question and I preferred answer publicly as this is a question that we get very often. I’m often surprised when I hear someone hesitate between an MBA and CFA because they are so incredibly different. Now you seem to understand many of the differences and I’d be more than happy to give my opinion on the matter. I completed my CFA exams and while I do not hold an MBA, I did study administration and have many friends and colleagues who have completed their MBAs so I do consider my opinion to be worth reading… hopefully:)

#1-MBA and CFA have completely different objectives: While the CFA aims at giving you a highly respected / recognized title in finance that will you assist your progress in the field, an MBA is generally geared towards entrepreneurs and managers or workers who aspire to management positions. The CFA is very precise while the MBA can lead you to a million different avenues.

#2-You do have to consider the passing rates: Unlike the MBA, where the vast majority of students end up passing, the CFA is very different. About 90% of those who enrol never end up finishing the program, that should be taken into consideration. If you do want to pass your CFA exams, be prepared to work hard, especially in that crucial month prior to each exam. The MBA is intense for 12-24 months but you can survive while slacking here and there. Also important to note, many MBA programs can be completed part time for 2 years while you continue to work.  For the CFA, you can actually slack most of the year. But in those weeks preceding the exams, you will need be dedicated to the exam.

#3-While the costs are probably lower for the CFA (depending on the program), I would not use that criteria as much as you would think. In both cases, getting the title will generally allow you to earn a lot more than what was spent on the program. In financial terms, both are winning propositions.

#4-You should only do a CFA if you intend on working in the financial industry for a long time. No doubt, the CFA title has terrific reputation in the finance sector. You can get an interview in many places that would probably not even look at your resume if you didn’t hold the title. That being said, once you exit the field, the CFA becomes virtually useless. Very few people outside of finance actually even know what the title is.

#5-Yes, you are correct when you say that partially terminating the program will give you more recognition in the CFA than a partial MBA. Often passing the first exam of the CFA program will already be seen as a very positive sign. So that could be considered a factor.

So yes, there is obviously a lot to consider and I think it’s difficult for anyone to take the decision but hopefully these points/comments will help you.

Any thoughts you would like to add?

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Comments

Hi,

Thank you so much for answering my query! I guess it was more directed towards an IT guy doing a CFA. I do understand the benefits of an MBA and is definetly something any guy in my position would do but considering my line of work and the chances of MBA almost null, would CFA still help me? Is it worth in any ways?

Many thanks

Unless I have misunderstood, you are thinking that an IT guy with an MBA would be good for a future career but are not sure if an IT guy with a CFA would have the same potential. I think you might want to take some time to think about this one. It is important to decide where you want to go from here and not necessarily where you have been (ie: IT). When I did my CFA I had never even been to University and had worked administration for over a decade. I knew I wanted a career in Investment and/or Portfolio Management and so I chose the program/designation that I felt would bring me closer to where I wanted to be (as opposed to where I had already been).

Regardless of whether you choose MBA or CFA, you will need to be passionate and committed to the course material otherwise it will be difficult to pass and continue with the either program. Especially with family and financial considerations. My best advice to you would be to study the course material for each program carefully – whichever gets you more excited and chomping at the bit to study would be the one to go for. Only this passion will sustain you (I agree with Intelligent Speculator; those last weeks before the exam are brutal) And don’t forget that after you pass, you have to work the same material for years. So choose wisely!

I wish you much luck. And whichever you choose, a background in IT can only support your decision. (IT rocks!)

If you just want to be a business analyst you do not need an MBA or CFA. My company focuses on hiring people with a tech background even thought our business is Commercial Real Estate Appraisal. Take a look at government positions as they are becoming competitive with the private sector.

hey guys, I just want to tell u that there is a gr8 website which is www[dot]crazyfa[dot]com which can help you alot in your CFA preparation. go have a look

by: Bhuvaneshwer Prasad | March 28th, 2011 (4:41 am)

hi,

i am an PGDM in finance graduates and having 3 yr exp in sales of financial services industry. but now want to change my domain to research. therefore i thought of CFA. someone can help me to analyse the options. my questions are.
1. Does MBA graduates have advantage in pursuing CFA.
2. In opportunities wise MBA + CFA will have more advantage
3. how long it can take to complete CFA (US).
4. and any exemptions in CFA for MBA graduates