Do you really need a CFA to work in asset management?
It's an accepted reality that gaining CFA charterholder status is absolutely key to managing money in the asset management sector. Most portfolio managers have the coveted 'CFA' after their name and getting through the 900 hours of study required to pass is seen as a badge of honor.
But is there any evidence that it will actually help you land an asset management job? Is it worth all the headaches, hard work and hassle?
“Everybody realizes that it’s a very difficult series of exams to take,” said Deepali Vyas, the head of global markets practice, Americas, at Heidrick & Struggles. “To pass it, it takes a lot of diligence to study and make it through all the levels – passing the CFA shows people that you’re being proactive, taking initiative and that you’re hard-working.”
That all sounds great…but what about the cons?
“The flipside is, not a lot of people care, unfortunately,” Vyas said. “Hiring managers and HR executives don’t say I want someone who has a CFA – I’ve never been specifically asked for that. My husband has a CFA – he’s a smart guy who studied hard and passed all three levels, and he manages money, but if you ask him if the CFA has really helped him in his career, he’ll say ‘Not so much.’”
To see how prevalent the CFA designation is across the asset management industry, we looked at eFinancialCareers resume database, limiting our search to asset managers in North America.
Overall, 30% of asset management professionals working in the Americas have a CFA. Those with zero to three years of experience are on par with that percentage.
Interestingly, professionals with anywhere between three and 10 years of industry experience are above the overall percentage, while people who have worked in asset management for more than 10 years fall below it.
A CFA is not essential
Everyone definitely expresses that it is a nice-to-have credential, but it will not take you out of the running for an investment role because you don’t have a CFA, Vyas said.
“It’s good training, it’s technical and it’s a nice refresher, but it’s not essential.”
Her husband decided to take the CFA exams after working for a few years at a money management firm.
“They encouraged it, while making it clear that it wasn’t necessary, but he decided to do it anyway,” Vyas said.
Especially some of the small-to-mid-sized asset managers with relatively small investment teams encourage early-career-stage employees to get a CFA.
“If other PMs or partners have it, then it’s a good calibration point where everyone’s on the same page and has shown that level of commitment and knowledge,” Vyas said.
The promotion factor
Holding a CFA charter might not secure a job in the first place, but it may help distinguish yourself from peers when you’re vying for a raise or promotion.
“If you’ve hit a stall in your career advancement and can’t seem to go beyond that point, a CFA is one of the factors that could help you get over that,” she said.
At the end of the day, one of the arguments in favor of taking the CFA, despite the fact that it isn’t necessarily a prerequisite at most asset management firms, is making yourself a more marketable candidate. For some hiring managers who see those three letters after a candidate’s name and are more inclined to hire that person, perception becomes reality.
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