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Is The CFA Worth The Effort?

Marc L. Ross

Eight hundred hours of graduate level study, successful completion of three rigorous examinations, four years of relevant work experience, adherence to a well-honed code of ethics and standards of professional conduct. The respondent, familiar with these requirements and having satisfied all of them, is a CFA charterholder who has devoted, sacrificed even, years of his or her life in the pursuit of professional investing excellence. Approximately one in five entrants into the program sees it through to completion. But in a crowded job market, in a profession held in rather low esteem by the public of late, is all of the effort devoted to obtaining the CFA worth it?

What the CFA Means
A CFA charterholder is intellectually curious, professionally passionate and constantly striving to learn more to round out his or her professional competence in the field. Financial service employers recognize the value that a charterholder brings to the workplace, as evidenced by many finance job advertisements that either request or require that the applicant be a CFA charterholder or candidate.

Unlike a Masters in Business Administration, which can vary significantly in content, rigor and reputation, the CFA is a professional certification conferred by one organization only - the CFA Institute, which is a non-profit, professional association and voice of the asset management and research field. The CFA institute creates, administers and tests a curriculum that strives for perpetual relevance in a dizzyingly complex world. More important, still, is the international remit of the Institute and its exam.

The language of finance may be English, but the practice of finance is decidedly global and competitive. Practitioners need a gilt-edged label that weds knowledge to practice across the globe. The CFA charter fits the bill, in more ways than one. For the three years inclusive of the one-time matriculation fee, it costs less than US$3,000, not unreasonable when compared to a graduate business degree that can foot to in excess of $50,000.

What a CFA Does
What does a typical charterholder do? There are numerous occupations available to a CFA, and new uses for the tools developed in the rigorous exams that are constantly being updated by experts and generalists to reflect the current financial environment. A long development period guards against quality degradation. The candidate body of knowledge derives from the global financial body of investment knowledge and is grounded in a professional practice that is ever changing. Examples of charterholder careers include, but are not limited to: portfolio manager, investment analyst, risk analyst, chief investment officer, performance measurement analyst, risk manager and private wealth counselor.

Candidates learn along a continuum, beginning with knowledge and comprehension of key areas and concepts, such as asset classes, economics and financial accounting (Level I and II), to application and analysis of what was learned (Level I to III), culminating in synthesis and evaluation of key areas of practice (Level II and III), such as wealth planning and portfolio management on an institutional and individual level. The learning is not so much sequential as evolving, assuming greater depth as the examinations progress.

Charterholders are subject to voluntary continuing education, or professional development credits that may be earned through attendance of lectures or presentations, reading of articles or books, or listening to podcasts. Content for any one of these must be of sufficient academic rigor to earn credit. The CFA Institute's website is a veritable treasure trove of knowledge for the candidate and charterholder.

The Bottom Line
Finance teems with professional certifications. Celebrating its 50th anniversary, the brainchild of legendary value investor, Benjamin Graham, stands out as the gold standard, exemplifying investment management as not only a business, but also, and more importantly, as a profession with ascertainable standards. Those aspiring to a career in finance should view the charter as indispensable. Indeed, for many, it is.

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