Is the CFA Worth It? The Surprise Answer with 5 Reasons

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You may be surprised to find such a post on a CFA exam preparation site.

After seeing many people who have regretted starting the CFA journey for various reason, we want to ask each of our readers to stand back and ask this basic question:

is the cfa worth itWhy are you getting the CFA?

Here are the common answers…

  • Better career prospect
  • Promotion; get paid more
  • Interest in the materials
  • Personal challenge

… and here are our comments.

1. CFA Exam Preparation is a Huge Commitment

A typical candidate spends 300 hours to prepare for each level of the CFA exam. With 3 levels (and assuming no retakes) we are taking about 900 hours. This is a huge amount of time that you could have spent with your family and friends; for working hard and get the recognition at work; for a hobby; for volunteer work, or simply for a more relaxed lifestyle.

It’s pretty hard to put in 900+ hours unless you find at least some topics interesting. If the passion isn’t there, you may set yourself up in wasting 2-3 years of valuable time.

(In our case, John went for the CFA charter and Stephanie didn’t.)

2. The CFA Program Could be Costly

There are registration and exam costs involved. Given the low pass rate (39%-53% for Level 1-3), it is common to have a few retakes. You will most likely need the CFA review materials as well… all in all you can easily spend at least 3,000+ (and possibly much more) on this project.

Once you become a chartered member, the membership fee and CPE requirement, while not too costly, is an annual expense.

3. The CFA Title Alone Cannot Land You an Investment Job These Days

In the good days, getting the CFA can prove that you are committed and that you have sufficient knowledge to perform the tasks. With an interesting resume and good interview skills, you may be able to break into a front-office investment job.

While the economy is recovering, the financial market remains volatile and this poses uncertainty and challenge for professionals to land (and keep) their jobs. Unless you have something outstanding to convince the interviewer, it is going to be an uphill battle to rely only on the CFA title to get into the industry.

Having said that, for those who like to make long-term plans, getting the CFA designation now adds value down the road when the financial market picks up again.

4. Is The Title Really Useful?

Getting back to the goals of getting the CFA title — most people are aiming for better career prospect and better pay. In this regard, I would say, in most cases, that only those who are working in the investment industry will find it useful. The CFA designation is almost like a requirement nowadays for promotion, or even for survival within the firm.

In other words, whether the CFA title means something to your employer depends on how your employer values the CFA designation. Put it simply, if your existing or future boss is a CFA, the designation and your effort will be recognized; if not, give it a second thought.

5. Don’t Do It Simply for Personal Challenge

Some candidates go for the CFA purely for interest and for personal challenge. You will be much better off by reading a few good books or taking a course without the need to go through the stress and cost to get chartered.

Please note also that you need to accumulate 4 years of relevant work experience to get the designation. The definition is very broad and covers anything from accounting to finance, but if you are, say a IT person, it’s pretty tough to get the CFA title unless you change your career path and work in finance.

Is the CFA Worth It? The Designation isn’t for Everyone

At the end of the day, the CFA Charter is not the answer to anything. If you understand this and still think getting the CFA is a good idea, then make the jump! We will help you out as much as possible here.

Okay, but Should I Take the CFA Exam?

The bottom line is: Does the value of CFA designation more than offset the cost in both monetary and non-monetary terms? Something for you to ponder today 🙂

For Your Further Reading

 

  • CMA PROSPECT says:

    Hi Stephanie,
    Would you say that review courses are a must,inorder to pass, for all 3 levels? Since level 1 is considered most difficult and the others much less is it possible to learn AND PASS level 2 and 3 using the CFAI book alone? What would you suggest for a self-study candidate?

    The fee for regular level 1 exam registeration december 2017 is $930, would it be same for level 2 and 3 or would it be more?

    Your help highly appreciated!

  • Chris says:

    Is CFA useful for M&A and private equity roles?

    • John / Stephanie says:

      Hi Chris, not really for M&A in my opinion (I was once in the M&A group in a global investment bank). For private equity, possibly but not a must. It is a lot more helpful in asset management, hedge funds, as well as for research analysts. Regards, Stephanie

  • Tom says:

    Hi Stephanie

    First of all thanks for your great website.

    I’m a german public accountant. I first considered doing the CPA exam. Since I do not fullfill the requirements (only 3-year-bachelor degree) I now think about the CFA exam. I have lots of clients in the investment field so I think it would fit well. I would like to hear your opinion on that.

    Greetings
    Tom

  • boe brown says:

    I work in finance, and it’s who you know. CFA may be worth it, but I personally find the time commitment worthless, as what they teach you is outdated and everything is now computerized

  • Saurabh says:

    If one wants to get into some investment bank or say analytical job pref. Research analyst,what pathways can a person take apart from doing CFA?

    • John / Stephanie says:

      Hi Sauabh,
      If specifically for research analyst position, CFA is very, very important. Besides that, I would say good grades and excellent communication skills are important.

      If you are a lateral hire, e.g. doesn’t want / need to start as the first years, then they may ask you for a sample of analytic work or a piece of writing that resembles a research analyst’s report.

      Networking helps a lot if landing a job in investment. Good luck! Stephanie

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