AuthorTopic: the value of CFA
@2003-11-01 21:58:56
Everybody knows that the quality of CFA charter is going down due to the massive interest all over the world. It used to be an upscale thing that mostly qualified professionals would be interested.
Now everybody even a 21 year old that doesn't even know what the investment profession is wants to have it...way before he even experiences the real life job.
In order for the CFA to keep its status these things should have happened in the past:
CFA should have been allowed only for people with work experience.
The purpose fo the CFA is not to get you in the industry but to advance your knowledge if you are already a professional.If you want to enter the business go get a masters.
It's silly putting people who doesn't even know what a stock is in real life is, to analyze industries and etc. Give me a break.
If you get the expereince then well go for it.
I cannot think of anything that could make the CFA charter worth more in the future....
Since we are spending our time for that.....what do you think could be done to increase the value of the CFA in the future?
@2003-11-06 13:52:30
It's not the idea of using the CFA as a ticket to a private club. What everybody is upset about is the law of demand. The CFA commands more prestige when there are 20,000 holders than 500,000 holders

20,000 holders could probably demand 200,000 dollars, while 500,000 would be lucky to demand 50,000. It's as simple and supply and demand.

I don't want a ticket to a private club. I just want to make sure that everyone that earns the CFA has the EXPERIENCE and is deserving of it. If you are taking the CFA simply because you want knowledge, then you can still do that. You order CFA materials and read them for your own knowledge, without obtaining the CFA.

Clearing the AIMR needs to institute some strict rules. I would propose, 3 years work experience in the investment community (ie analyst), or 7 years in the financial community (ie accountant). With these rules in place, there would be 10,000 taking the exam annually, instead of 100,000. And the prestige of the CFA would be regained.
@2003-11-07 03:42:37
Yes, lets all get in the club and then raise the bar!

Am I just naive or is it not the purpose of a finance professional to see how his clients, employers and the larger public can be better served? And is the investment community going to be better served by the "prestige" of who they deal with or with their competency?

If there are more CFA Charterholders then that will necessarily iply more choice amongst investors and employers which will in turn necessitate higher qualities of professional conduct by CFA Charterholders (in order to remain in the race). Therefore, it won't really matter whether one holds the charter or not, but how professional one is, which I believe in essence is what all of the above are talking about anyway.

As for the supply demand factor, it should be noticed that it is only in the short run that an over supply situation can occur, if CFA Charterholders no longer earn "200K" but only "50K" then resources i.e. aspirants (looking for income above 50K), will reallocate their energies to other industries.

I think that those who are already charterholders are no longer comfortable with the fact that the dynamics are changing and that they will need to continue to add value to themselves or they will perish irrespective of three magical letters appearing after their name.

If one truly wants to raise the bar, and the reason must be in order to better servce the community, then that bar must be applicable to all new entrants, as well as existing members. Besides in todays economy where continuing education has become a necessity in order to simply maintain velocity, isnt it quote preposterous that one would think that once one has obtained the CFA charter, that they will not need any additional qualifications and will remain to be highly sought out executives.

I am receiving my CFA Charter soon and god I hope I do not become so pompous once I do!
@2003-11-07 05:18:14
Yes I agree, the experience requirement should go up to 7 years....We will send a letter to AIMR Board with this and other ideas for increasing the value of the Charter.
There are a lot of colleague chartholders not only in my company but also in the Local Society that have the same views.
It is us the CFA Chartholders that should take action and demand ways to keep the value of the Charter to a reasonable level.
We need to increase the communication between CFA societies.
Everybody should be allowed to participate in the program and people can get involved by being AIMR members but to be a CFA Chartholder you need to have at least 5-7 years experience.
This will leave out all the non serious candidates that they don't even know what they want. If they want to get involved they can do that through AIMR membership.They can even pass all the 3 level exams. But would they committ money and time for the CFA if they weren't sure that they will be working in the industry?
i think this thing is coming soon. AIMR can now do it. It is economically independent and doesn't need so many candidates desperately as in the past to make some money.
@2003-11-07 10:38:18
monoply? entry barrier? output control?
as far as cfa title is profitale, more resource will cash in.
this rule is as simple as demand-supply.
@2003-11-07 10:46:47
Good analysis,Bang!!Is it fear what I smell??Obsolescence?Maybe a 21 year old guy without experience is able to pass the exam and then get t the experience, but starting with a far better preparation.
@2003-11-07 18:42:47
For sure, I smell fear. Recent graduates (such as myself) are far better prepared. For one - they have the study skills, secondly they have more drive, since chances are they are looking for that first step in the door, which passing CFA exams will help in. Another thing to keep in mind when saying "we" (i.e - the recent graduates) don't know what we want, well apparantly neither does the 50 year old accountant who goes and does his CFA after already going through the process to become a chartered accountant. I do agree that work experience should be part of the charter requirement, however feel that it is great to pass your CFA exams the younger you are, it puts you at a great advantage to starting your career - which is where the fear of the person who may have all the experience but be stuck in the same position starts to get scared
@2003-11-08 19:14:44
I don't think some of you are being fair to the first point mentioned.

For a designation to have clout (and subsequently, high earning potential) it does have to restrict its number. While this may seem unfair, that is why being a doctor, lawyer or CA is prestigious--not many people have it. The bodies of those professions have arbitrarily set a limit on the numbers in their profession to maximize the demand/supply ratio for their members.

I would never want to restrict access to people who are committed to earning a living in the financial industry, yet I agree that work requirements are currently too laxed. The scope of what is considered 'experience' is too broad and not sufficiently audited.

Someone made the point of using a CA as an example. Wouldn't it be nice if AIMR had similar stringent requirements. Afterall, CFA should mean a lot more than an understanding of yield curves.

If the work requirement were increased to 7 years, I would probably be a few short. But that's OK. I don't mind paying my dues. A designation that's worth something is worth it.
@2006-03-07 05:38:36
Personally I have only 4 yr experience in finance industry - but I feel there's some genuine logic behind an experience requirement, other than creating entry barrier. Without adequate experience no one can be a true professional in any field no matter how well eductated (s)he is. So it makes sense to allow everyone to appear at the exams but preserve the "CFA Charter" for a minimum experience requirement.
@2006-12-20 11:51:54
Time in the industry might be the key factor ,but some peeps learn faster than others and grasp the whole scenario sooner,so personally i dont think its about the time you have but the influence you have caused
@2007-02-22 09:52:59
i dont know anything about the CFA but that is what here to find out and also how i can obtain the certification and the job oppurtunities that goes with CFA
@2011-05-27 10:40:58
The nominal income for IT in US has been declined steadly since 2000 because of outsource. In order to maintain the living standard, I try to squeeze to the business side, that is all and simple.
@2019-07-26 17:55:05
the older experienced folks feel threatened by us (i.e graduates) who aspire to have a career in investment and the like. CFA is the gold standard for such career, a stepping stone for most of us. personally i just graduated am 22years old and im to sit for level 1 exams this december and i think that my timing puts me at a far much better position than someone who has been woring for a long time, in my chances of passing that is. i mean besides the ethics part everything in CFA level 1 is literally all the material iv studied for my undergrad so id rather take the exam when most things are still fresh.

the only thing that baffles me about CFA is that everyone, even people that have no academic background in finance are allowed to do it. that is where the value is affected. but thats just my opinion.

CFA Discussion Topic: the value of CFA

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