If you think earning a Chartered Financial Analyst (CFA) certification is the key to riches, think again. While a CFA credential can certainly brighten up a resume, it shouldn’t embolden you to charge in to your manager’s office and demand a pay increase.
From a recruiter’s perspective, quantifying the monetary value of a CFA is rather difficult. “Don’t expect a boost in salary right away” – or your worth in the job market to suddenly skyrocket, said Kristin Paszczak, a division director at Robert Half International in Chicago. “Clients aren’t willing to add on another 10% or 15% [in salary] just because of a CFA.”
And that is where the disconnect is – many CFA candidates assume that firms will open the purse strings. Just like with newly minted MBAs, a lot of recent CFA holders come to the market with unrealistic earning expectations, she said.
“All other things being equal, it’s a value-add,” Richard Lipstein, managing director at Gilbert Tweed International and vice chairman of the board of directors of NYSSA, said of the CFA certification. “It’s a badge of honor. It says you have the quantitative and analytical underpinnings to do the job.” But does it substantially increase your earning power? “I don’t have enough evidence to say that,” Lipstein noted.
The CFA Institute didn’t respond to requests for comment on the earning power of chartered certificate holders.
“It holds weight but I don’t know how much. If I pass my salary doesn’t go up,” one test taker told us. “If I get my CFA it doesn’t really open any doors. It’s just impressive."
Indeed, hiring managers appear to lean more on experience. One recruiter who asked to remain anonymous recently worked with a project manager who will be taking one level of the test come June, and is rather skeptical of what it will bring him financially.
“I am doubtful that he will do much with it as I think his potential with his CFA depends on his network and prior experience,” the recruiter said. “I don't think he will have great opportunities as a CFA without the network and pedigree. Yet someone more entrenched in that market would do better.”
None of this is to say a CFA certification is worthless. Far from it. It’s a great addition to a financial toolkit, particularly for those in asset management, but it’s seen more as a supplementary piece by many. And it is not something that will dramatically or immediately increase your earning power.
The one major plus of a CFA, especially when compared to an MBA, is it’s one-size-fits-all quality. “If you get an MBA at Long Island University, it doesn’t have the same cache as a Harvard MBA,” said Lipstein. “A CFA is a CFA is a CFA.”