The Chartered Financial Analyst Exams
17 Sep 2016 - Estimated reading time: 3 minutes
I first started working in an investment consulting practice at the start of 2014 following 6 years working in various third party admin (TPA) roles. Eager to quickly learn about the world of investments I wanted to study something that would be practical and that I could directly apply to my new role.
I found that speaking to people from different backgrounds and with different qualifications was invaluable in deciding which qualification to go for. In the end the CFA program stood out as being relevant to my role, highly regarded and also generally achievable within a 4 year time period.
Before committing to a study program I’d definitely recommend speaking to different people within the firm about their experience studying for a qualification and how it has helped them in their career. Hymans Robertson has people from many different backgrounds who will be more than happy to give up 5-10 minutes of their time to have a chat.
The CFA program is a professional finance qualification offered by the US based CFA Institute. In order to become a CFA charterholder, candidates must pass 3 levels of examinations and have a minimum of 4 years’ work experience within the financial industry.
The exams are held annually in June (with the exception of level 1 which can also be sat in December) and all 3 exams consist of a morning and afternoon session, each lasting 3 hours.
Across the 3 exams the broad topics covered are: professional and ethical standards, quantitative methods, financial accounting, equity and fixed income analysis, corporate finance, alternative investments, derivatives, economics and portfolio management.
Further information on structure and content of the CFA program can be found online at: www.cfainstitute.org/programs/cfaprogram
Challenging. The CFA program is considered by some as one of the toughest financial exams around. In order to successfully gain the charter, candidates will have to be determined, organised and, on exam day, need to have a calm head and be able to extract all of the knowledge gained through study.
However, the CFA program is also very rewarding. From my experience those who put in the hours generally get the results they want; those trying to cram their study or cutting corners will almost inevitably end up disappointed.
The knowledge gained through studying for the CFA exams will be beneficial to you whatever you end up doing in the investment practice at Hymans Robertson.
Josh Pilley - Investment Analyst, London
The curriculum is large and covers a wide range of topics, but taken in small chunks none of it is particularly difficult to master. Yes, there will always be topics that you just won’t be able to get your head around, but these are generally few and far between and, with a typical passing score being somewhere between 60-70%, a question or two skipped on exam day is unlikely to hurt you providing you have spent the time mastering other areas.
It is recommended that candidates spend on average 300 hours of study for each exam and making good use of the study days provided by Hymans Robertson is vital to successfully passing the exams.
It’s the breadth of the curriculum that I have found to be most beneficial. Pension schemes invest across a wide range of asset classes with varying management styles in what are constantly changing and evolving financial markets. The CFA program provides you with a solid base to understand these many moving parts.
As an example of how the CFA program has increased my investment knowledge I’d consider the example of currency and derivatives. Both these markets are globally massive in scale (the Forex market is the largest in the world!) and both are used extensively by pension schemes, yet, before I started studying for the CFA exams my knowledge of these two areas was basic at best. Now, however, I feel I have a good technical knowledge, I understand what drives changes in market value and how these assets can be used as part of an investment portfolio. Crucially for the role that I do in the investment team I’d feel comfortable discussing and advising on these topics with our clients.
I believe that the CFA program can also be beneficial for boosting career progression. For analysts in the investment practice the two areas they should be focusing most on in order to make the step up to Associate Consultant are their soft skills and their technical skills. Soft skills are difficult to teach; they generally develop over time and through experience. Technical skills, however, can be taught and completing the CFA program is an excellent way to enhance those technical skills and ultimately progress your career.
The career paths in the investment practice generally follow three main routes: client consulting, manager research and technical analyst/consultant. Whilst most people in the investment team work (and generally start off) in the client facing side, as people’s careers develop over time they may look to focus on the other two more niche areas.
With regards to sitting the CFA exams the key point for potential candidates to take away is that it certainly doesn’t restrict which career path you may eventually go down. The knowledge gained through studying for the CFA exams will be beneficial to you whatever you end up doing in the investment practice at Hymans Robertson.