Dear Student,
So you are just starting your third year of college and do not yet have a clear idea of what you want to do after graduation. You are fairly certain that you want a career in Finance and have heard that having a CFA next to your name will provide you a good headstart, but are not sure how to go about preparing for the CFA exams.
Here are the 5 questions that students most often ask me about CFA, with my responses. I didn't cover questions whose answers are available on CFA Institute's website.
- Does it really provide you a headstart/advantage in Finance?
- Yes. Finance jobs (particularly in investment banking and private equity) are fiercely sought after, for their relative high pay, the reputation surrounding them, and the advantage those jobs provide in B-School applications. Job creation rate in these fields is far slower than the rate at which the demand is increasing, meaning that there is ever-increasing competition for those jobs. Companies view CFA charterholders/Level 2 or 3 cleared candidates as having a firm understanding of a wide-range of topics in finance, in general. There are increasing number of CFAs, increasingly making CFA a pre-requisite for a job than an advantage.
- CFA or a reputed MBA?
- The combination is terrific, but if you had to absolutely choose one, then choose the reputed MBA. Finance as an industry values relationships and networks highly. If I were recruiting today for a role in private equity, I'd choose somebody who has a decent understanding of finance (without CFA) but has a great network of investment professionals (that a reputed MBA can provide) and choose to train him/her on financial concepts, over someone who has the knowledge but not the network.
- I'm not sure about Finance - should I pursue CFA?
- No. It's too big an investment of time, and requires a lot of passion for finance to actually complete it and become a charterholder.
- Is it tough? Can I do it alongside a full-time job? How long do I need to prepare for each of the 3 levels?
- I completed my 3 levels while being employed full-time. On average, I spent 1 hour each weekday and 6 hours each on Saturday and Sunday, for 5 months, for each level. I'd highly recommend taking at least 2 (but preferably 4) weeks off before the actual exam, just to revise, give practice tests, and improve weak points. Please note that if you have a lot of experience in the investment field, your timeline may be shorter than mine was.
- Is there any value to clearing 1 or 2 levels vs. clearing 3 levels vs. being a charterholder?
- I'd say that if a Charter's value is 100%, then Level 3 Clear is 90%, Level 2 Clear is 60%, and Level 1 Clear is 20%.
Hope this helps. Good luck with your preparation. If there are any further questions you have, just leave a comment to this post or write to me on LinkedIn.
Best regards,
Praveen Chunduru, CFA
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