With the financial sector job market in such dire straits, now’s the time to be thinking of going back to school. Assuming the idea of professional qualifications appeals, which ones are likely to help you find a new job in 2013?
It’s a little ironic that people with the qualification from the Institute of Chartered Accountants in England and Wales (ICAEW) earn more outside of the UK. The average salary for those who have passed the ACA exam and are working in foreign climes increased to £128.3k ($208.1k) with a bonus of £35.6k in 2012, versus London salaries of £101.4k (with a £31.9k bonus), according to figures from the accountancy body.
The much-coveted move from audit in a Big Four firm to the front office of an investment bank is now less achievable, and even product control is less of a realistic goal now that these roles are being increasingly offshored to cheaper locations.
Nonetheless, the latest application figures (not yet completely digested by the ICAEW) suggest that 2012 saw the largest number of wannabe ACAs in 21 years, according to Gavin Aspen, director of qualifications at the ICAEW. In the current climate, many people are seeking the security of a “globally recognised qualification” he says.
“There’s still an appetite within the financial sector to recruit ACAs, particularly with the current focus on risk management,” he says. “As well as the classic control and reporting positions, there’s still an appetite to hire for product control, risk management and, to a lesser extent, front office positions.”
There are a couple of other reasons to get ACA qualification. The pass rate is unusually high – between 84-93%, depending on subject area this year. And then, there’s its enduring popularity; figures from the resume database of eFinancialCareers in November show that ACA is the most searched for term.
The Chartered Financial Analyst (CFA) program
The CFA designation has long been a badge of honour and the notoriously low pass rate of 42% is testament to the gruelling 300 hours of study it takes to make it through the qualification’s three levels.
The CFA has really taken off in Asia this year, where enrolment increased by 21% in 2012, compared to 6% in Europe and 1% in the Americas, according to Ed Bace, head of education (EMEA) at the CFA Institute. In fact, 44% of those taking the exams in June were based in the Asia-Pacific.
Bace says this may be due to the growing number of opportunities in the Far East, but it may also result from a jobs market that’s becoming tougher. According to research firm Catalyst, the region accounted for 23% of all senior investment banking job cuts in the first half of 2012.
Unemployment among CFA charterholders is still relatively rare – just 4%, according to figures from the CFA Institute – but the types of roles they’re gravitating towards is changing, says Bace.
“In the past, it was mostly relevant for front-office roles and analysts, but it’s more and more useful for those in relationship roles, sales roles, and positions in the middle office,” he says. Globally, the highest proportion of CFA charterholders (23.9%) are employed as portfolio managers.
In EMEA, the biggest employer of CFAs is UBS (456), followed by Barclays (260), PwC (238) and HSBC (224). In the Americas, Bank of America Merrill Lynch (1,205) employs the most CFAs, followed by Wells Fargo (918), Royal Bank of Canada (905), J.P. Morgan (729) and TD Bank Financial Group (656). In APAC, meanwhile, it’s HSBC (445), UBS (315), Citigroup (297), Standard Chartered (248) and J.P. Morgan (247).
Chartered Alternative Investment Analyst (CAIA)
One of the patterns of 2012, at least according to our own figures, is that private equity jobs have held up relatively well, particularly at the junior to mid-level. And, while many hedge funds have had a difficult year, some of the medium-sized and bigger players have continued to hire.
The number of people registering for the CAIA qualification swelled by 15% this year and, although the highest number of candidates is in the US, again Asia was a particular growth region, according to Thomas A. Porter, managing director and chief operating officer of CAIA.
The highest proportion of candidates who graduated in September went into analyst roles, he says, followed by business development/sales, portfolio manager, consultant, advisor and risk manager.
Securing a role in the alternative investments industry is notoriously competitive, with both private equity firms and hedge funds only targeting the very best people from other parts of the financial sector. But most candidates taking the CAIA are doing so for a career switch.
“Over 50% of candidates report that they pursue the CAIA designation in order to position themselves for promotion within their firm, or for career opportunities outside their current firm, and to differentiate themselves from other investment professionals,” says Porter.
Masters in Finance
Taking one of the many Masters in Finance degrees is no longer a golden ticket into an investment banking graduate scheme, and they’re not exactly cheap – coming in at £10-20k, depending on the university.
Our own figures suggest that, on average, employment in the top investment banks for Masters in Finance students hovers between 35-60%. However, the qualification could give you an edge over other graduates applying to banking jobs.
“The bar to investment banks’ graduate schemes has been set higher than ever this year, and even summer internships are demanding a wealth of technical and industry knowledge,” says Derek Walker, director of careers at Oxford’s Saïd Business School and former graduate recruiter at Barclays Capital. “Taking a specialist degree is likely to give you the edge.”
Advanced Diploma in Insurance
The London insurance market is putting more emphasis on hiring those with professional qualifications, particularly the Advanced Diploma in insurance and Chartered status.
Relatively speaking, insurance employment has held up well this year and insurance firms are increasingly demanding that their staff undertake formal training as they “strive to achieve professional standards,” says Graham Sutton, director of corporate development at the Chartered Insurance Institute.
“Recognition by insurance buyers of the importance of professional qualifications as an indication of knowledge and expertise is another factor influencing the growth in importance of qualifications and Chartered status,” he says. “2013 will see further growth in the number of Chartered firms.”
Currently, they include Marsh, Zurich, Axa, Allianz and Hiscox.
Yes, an MBA isn’t directly related to a career in financial services, and management consultancies are an increasingly favoured career path. Yes, they’re incredibly expensive and more financial services professionals are undertaking MBAs to move out of the industry.
However, the latest employment report by QS Consulting suggests that financial services is the second biggest employer of MBAs (behind consulting) and, within the top schools, investment banking largely remains the biggest employer.
Unfortunately, the schools most likely to increase your employment prospects in finance (according to QS’s rankings) – Wharton, Chicago Booth, London Business School, Harvard, Stern School of Business, Columbia, INSEAD, IE Business School, Stanford and the Kellogg School of Management – also happen to be among the most expensive. The question, therefore, is whether an MBA is worth the investment.