GUEST COMMENT: Real bankers don't have a CFA
On the face of it, the CFA is a pretty worthless qualification. And it is becoming more so every day.
Like most members-only clubs, it thrives on exclusivity. You're part of an elite group who've worked hard, passed all three parts of the exam and done all the other requisite box-ticking. And with strong demand still for City jobs despite the credit crunch, it's becoming harder to differentiate between job applicants - even after eliminating chronic halitosis sufferers, people with 2.2's and the ones that don't look good in a suit.
But the CFA Institute faces an existentialist problem. It is a profit-making organisation (and it would be very ironic if it wasn't, given that its charter holders are supposed to be some of the richest people in the world, paragons of modern capitalism and efficient markets). And yet the more candidates it accepts (and the more it grows its bottom line), the less exclusive it becomes.
With high unemployment in the financial sector many people are signing up. A CFA is a cheaper qualification than an MBA, although it takes just as long to complete (if you pass everything the first time).
However, the CFA cannot afford to pass too many plebeians into its cosy members-only club. So what does it do? Logically, it marks each exam on a forced bell-curve so that only a minority pass each exam sitting. The rest will have to wait, pay another set of fees and do their retakes months later.
Yet, if they think the CFA will contribute to their job prospects, they are deluding themselves. Yes, a CFA will help if you want to work in asset management, equity research, or hedge funds. Anywhere else, it is mostly superfluous.
The only way to get a really sound footing in financial services is to do the three year analyst programme in an M&A team at a top bank. I hate to burst your bubble, but alongside this the CFA looks like a BTEC Diploma compared to an economics degree from Cambridge.
The author is an anonymous ex-corporate financier who now works in private equity.
