This is not exactly what kids ask me…but they do have this question:

I have done my CA (or MBA) and I wish to get into equity research / fund management what should I do?

And my answer has always been “CFA” from the USA of course. I used to have a lot of respect for Yasaswy, a Gold medallist, but I have respect only for the CFA charter from the USA. It is a course that is in 3 levels – even the first level is so good that it forces you to read a lot and get your fundamentals clear about the basics of finance. It is a popular course already in India – about 100,000 people take the course at level 1. However the number of people getting the charter is only in 3 digits annually.

Why should you do CFA?

1. In the fund industry your chance of getting noticed is very high. Many of the top fund managers are Charter holders – Prashant Jain of Hdfc, Sunil Singhania of Reliance Mutual fund, Munot of SBI are the immediate names, but there are more. So when you back a nice MBA or a CA degree with a CFA charter, you are atleast guaranteed an interview.

2. It is cheaper than an MBA degree: The cost of doing the course is largely in terms of exam fees! Books are available as a hand me down, photocopies, etc. Of course even if you were to buy the books, and write the exam the cost of doing the whole course should be in early 6 digits – surely under Rs. 150,000 for the whole course. Now compare this with a nice full time MBA – that will set you back by 2-3 million rupees!!

3. You can do CA, or MBA (or both) AND do CFA: There is no either or kind of a situation. You can do all the courses…however if you cannot afford the luxury of 4 years for CA or Rs. 30 lakhs to do an MBA, you could do your CFA.

4. It is about time commitment: It is not an expensive course, and it is not a full time course, however, after level one, the commitment is full time. MAKE NO MISTAKE – it is not an easy course. You may have to attend some coaching – online, offline whatever is available and takes its toll. It is not easy to do it just by browsing your books. You need to really practice hard to pass the exam.

5. In India it is not mandatory for mutual funds to appoint Charter holders, but in the USA it is a career enhancer for sure. There is a huge demand for CFA charters abroad – so your chances of an international career – Singapore, Hongkong, Dubai, London, New York gets a serious boost. In India the old school boy network – IIM, CA, etc. works and there is no great PULL by the industry. However as the number of American fund mangers increase, demand will go up.

6. It enhances your knowledge of Finance: once you have a CFA charter no fund manager, pension fund manager, life insurance company, or any banker will ever doubt your understanding of finance. It is a great visibility provider and launches you for a top job.

7. Just by starting CFA your salary should go up in an existing job and / or you should get a new job with a better pay.

I hope this post answers many of your queries……

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  1. Shankarnarayan.K.

    I cleared levels 1 and 2 in 2010 and 2011. Failed level 3 in 2012 in Band 9. Didn’t attempt again. My bread and butter job is no way related to finance. Did it just to enhance my investing knowledge.

  2. While CFA itself is not very costly, charter is quite costly. Despite completing my CFA, I didnt continue my charter for more than 2 years due to this issue. It costs about 22000 per year to call urself a CFA after having cleared all the exams. I feel the standardized cost of the charter across all countries should be reworked to take into account different countries’ salaries.

  3. I cleared all 3 levels last year. It definitely added a lot of knowledge to me. It is the best quality education I have received so far. A very good value add for career if u r in finance (though I am from IT) or to ur finance knowledge. Also gives u a very good circle.

  4. Only problem with CFA certificate in India is that many people enroll in it hoping they will get a job in an investment bank after passing level 3,which is not true.

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