Many people have asked me: “You want to do investment banking and are studying a master in finance, why are you doing a CFA?” I can certainly see the point, as a CFA is perfect for investment professionals, and not so much for investment bankers. But for me, a CFA has played a vital role in my exploration of IB and is a great complementary study alongside the MoF. In this article I will tell more about CFA.
The CFA programme is a postgraduate professional certification offered internationally to investment and financial professionals. If you want to claim this prestigious designation in the financial world, you need to pass three levels of exams and achieve qualified work experience. The three exams cover a wide range of topics, and each level is designed to examine different competencies – L1 gives a comprehensive overview of finance; L2 emphasises valuation, a great help for most kinds of entry-level finance job interviews; and L3 specialises in investment.
Although in my bachelor of business administration I had some relevant subjects, I had never studied finance in a systematic way. Highly interested in finance I was eager to learn more. As each level usually requires a 300-hour study, I also wanted to challenge myself to train my other abilities such as time management. Taking this challenge eventually made a huge impact on me, not only in terms of the financial skills. But most importantly, I could explore different professions in finance and subsequently discovered my passion for investment banking.
When I studied for my L1, I was in the last semester of my bachelor. Back then I studied everything on my own. There was a lot of jargon I did not truly understand. Apparently if I had had taken the L1 during the MoF, I would have understood it much better since MoF covers a wide range of CFA curriculum. Many classmates told me that it took them significantly less than 300 hours to prepare for the L1. Things changed when I studied for the L2 during my second semester of my MSc Finance. For instance, Data Analytics and Machine Learning in Finance included one assignment that was based on one CFA reading, and the professor is a CFA Charterholder. Professors at FS do not only have academic expertise, but also extensive real-world experiences. They explain the topics in such an interesting and practical way that motivated me to study more and jargon started to make sense to me. Thanks to the L2, I finally started to see the logic and connect the dots among topics. Currently I am studying for the L3 and I can say that it has changed the way I think for investment.
Firstly, please do it only when you are genuinely eager to learn and passionate about the topics. Otherwise these 900+ hours could be spent in a better way for your career or personal life. Secondly, try to understand the logic behind concepts, and how it makes sense in the real world. FS people have very diverse experiences. It is recommendable to chat with people who have worked in the respective area.
For the exams, I would suggest the following: 1. the official curriculum is not written in the clearest way. When you are short of time, skip it and study from another source such as Schweser Notes or sign up for a course from a CFA Institute-approved prep provider. 2. The practice problems from curriculum are the best exercises you can train for the exams. Overall, the exams are not too difficult but they cover too many topics.
Good luck and enjoy this wonderful journey!