AuthorTopic: Why Take the CFA Exams?
@2017-12-29 03:46:01
Most Candidates Don't Expect More Money, So Why Take the CFA Exams?

A recent poll asked whether respondents saw an increase in salary after earning the CFA designation. The results showed that more than half (51%) of respondents did not receive or expect to receive a jump in their salary after the process.

The poll might have been confounded by those answering what they expect to receive and those answering what they actually received and the sample only covered 31 respondents, but the fact that half answered with no additional pay is interesting.

So, why subject yourself to hundreds of hours of studying and three grueling tests?

A seat at the table

I can tell you that one of the biggest benefits since I earned the designation has been implied credibility and increased opportunities. Just having the charter does not make you a market guru with prophetic knowledge, but given the work and commitment it takes to earn the charter, it is often assumed that you have a valuable insight. I have been invited to speak on more panels and have been offered more projects since I earned the charter and several clients have told me that their decision was based partly on my status as a charterholder.

While the implied credibility you may see from the charter would certainly be a benefit, the trick is to continuously validate that credibility. Don?t think that the hard work ends with the receipt of your letter allowing you to use the designation.

Putting it in perspective

Candidates report spending around 300 hours studying for each level, bringing the time commitment for the charter to somewhere around 900 hours. This is a pretty formidable task when crammed into three or four years but not so much if you consider the time spent on education throughout your life and career. The standard bachelor?s degree requires close to 1,600 hours for eight semesters, and this doesn?t include any secondary education or master?s level education.

The process of learning is a commitment to yourself as a professional. It provides much more than job security and a regular paycheck. In an industry where 50 basis points may separate the best and worst money managers, isn?t it nice to know that you have done everything you can to be a fiduciary of other people?s money? The self-satisfaction from having committed myself and earning the CFA charter has been one of the most valuable benefits.

Don?t kid yourself, the money is good too

The Bureau of Labor Statistics puts out median salaries for occupations with estimated 2013 salaries for financial advisors ($66,580), financial analysts ($75,650) and financial managers ($107,160).

By comparison, the Institute?s most recent survey (2007) shows that charterholders are not getting in line for the soup kitchen any time soon. The median total compensation for various positions includes: financial advisors ($175,000), research analysts ($200,000) and portfolio managers (between $158,000 and $456,000).

Now, let me qualify this before I get sanctioned for saying that you WILL make more money as a charterholder. There are several obvious problems with comparing the BLS data directly with the Institute?s survey results. The occupations are not a direct match and there are differences in survey methodology. By virtue of the charter requirements, CFA charterholders will have more experience than the average and this will skew the results. That said, I would bet that your commitment to the charter will pay off in higher compensation throughout your career.

Stick with it

Earning the charter is a difficult process and one that many have tried and failed. Its tough to weigh the full costs and benefits until you have already made the commitment and earned the charter. As a charterholder, I can tell you that it is one of the best decisions I have made and would gladly do it again.

It will all be worth it. Don't give up!

Joseph Hogue, CFA

CFA Discussion Topic: Why Take the CFA Exams?

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I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz

Tamara Schultz