Chartered Financial Analysts?

[BunsGettingFirm]

I think brewster and one other person is a CFA on this board. I would send them private messages if this board had such a feature, but it doesn't.

I'm planning to begin a one-year MBA program (let's just say it's Queen's University in Ontario) in 2006 and ending in August, 2007. I plan to take the CFA-1 in December, 2007. Do you think that's enough time to prepare? I will have just finished all of my classes, so I figure all of the material will still be fresh in my mind -- assuming my mind will still be fresh after a one-year slog.

Thanks,

Buns

 

[nfs]

Do level 1 before you do the MBA. It's not as hard as you might think and it will be nice to have it out of the way.

P.S. Level 2's a bitch.

 

[REWahoo]

I would send them private messages if this board had such a feature, but it doesn't.

The board does have a private message (PM) feature.

Simply find the member's name and click on it, which will take you to the member's profile page. Near the bottom of the page under "Additional Information" is a link to "Send this member a personal message."

 

[boutros]

I am on the third test (of 3).

Most people start about 4-6 months ahead of level one. If you have taken finance, accounting, or econ classes in the past you will review some of the same concepts in L1. What do you want to do with a CFA or MBA from Queens University? Are you looking to move, I've heard that in Canada CFAs grow on trees.

 

[BigMoneyJim]

Adding to REWahoo's message, you can also click on the green squiggly thing (partially unrolled scroll?) on the left side of the post to send that user a PM.

At the top of every forum page it should say "Hey, [your name], you have [ x ] messages, [ y ] are new". The number of messages is a link to your PM inbox.

For what it's worth, the green scroll thingy is brighter if that person is "currently online". (Meaning they requested a page in the past 5 or 15 or so minutes.)

 

[brewer12345]

I'm a CFA and MBA. I took Level I about three weeks after my last set of MBA finals and passed, despite not having much time to prepare. However, I did a double major in accounting and finance and I have an undergrad economics degree, so I was up to my ears in the material. Even so, I spent the three weeks cramming. It was exhausting, as you might imagine. I did not use a prep course, I just read the books and studied.

If you are familiar with the subject matter (i.e. you aren't learning a lot of it for the first time) you should have enough time to prepare between when your degree is done and the test, but expect to put in 10 to 15 hours of study per week, as there is a lot of material to cover. IIRC, the preponderance of Level I when I took it a few years ago was financial statement analysis and accounting, so you would want to make sure you cover that well in your MBA program. For Level II and III, plan on spending a solid 6 months (minimum) preparing if you want to pass.

Feel free to PM me if you have further questions.

 

[bongo2]

You don't mention if you're employed, but you might want to wait to take the exam until you have someone who will pay for the material and the humongous exam fee.

Level 1 is much easier than the other two, and has very general material that you should know from your MBA if you haven't picked it up from undergrad, work, or Kiplingers. Level 3 also has general material largely relating to investment policies / portfolio theory that is useful to know. Level 2 is obscure accounting stuff that is painful to slog through.

How much you need to study is really going to depend on how well you already know the material, but even more on how good you are at taking exams. I studied 40 hours for the first one, 80 for the second, and 90 for the third. I could have gotten away with less, but I didn't want to risk failing. I would also recommend the Schweser study notes (others may be good, but that's what I used), and that you do as many practice exams under realistic exam conditions as you can (in my opinion this is the most common exam-taking mistake that people make).

 

[brewer12345]

Humongous exam fee? What, $400?

 

[BigMoneyJim]

Humongous exam fee? What, $400?

Heh, I remember when $400 was a lot of money.

 

[BunsGettingFirm]

Wow, there are more CFAs here than I imagined. From now on, I need to keep my economic forecasts to myself. LOL. Seriously though, this has been a very useful thread to me. Not only did I find out more about the CFA exam, I also found out that the board does indeed have a PM feature.

As to why I would want go to a Canadian school? They (though not necessarily Queen's) are giving me a full scholarship. With my GMAT and experience, I can probably get into a top-20 program, though not necessarily with a full scholarship. Another thing is the rent in eastern Ontario and Quebec is incredibly affordable. A decent apartment in the city is $450 - $700 Canadian. I can't imagine being a full-time grad student in NYC where a walk-up studio can cost $1200. I wouldn't even think about taking 3 months to study for the CFA and do interviews if I had to pay that kind of rent. Another reason is that both programs I'm considering are in the 12 - 16 months range instead of the traditional 21 months.

Unlike most of you though, my undergrad and grad degrees are both in computer engineering. I'm thinking about leveraging that experience to work on the finance side of start up tech companies where though there is more work, you get to rise to the top a lot faster. It's something that I want to try after finding that my career in a big tech company has stalled. For me, having a CFA-I is a way to tell potential employers that I know the basics of finance.

Again, thank you for providing your first hand experiences. I had heard that it would take up to 200 hours of studying to pass CFA-I, but it would appear that you can get by on less if your undergrad degree is in finance or economics. For me, I think I'll err on the high side of 120 hours. That should be doable with 3 months of calendar time.

 

[brewer12345]

Buns, if you come out of an MBA program with a concentration in finance and you don't plan on getting involved in asset management or analyst work, it kinda seems like the CFA would be a waste of effort, no?

 

[BunsGettingFirm]

Assest management would be my preference as well because 1) the hours are reasonable, 2) the analysis work is similar to the sell-side analysis work at an I-bank, 3) the earnings potential, while not as high as that of I-banking, is nonetheless very lucrative.

The problem is that I read that funds management companies, with the exception of Vanguard, rarely need to hire in droves, so you have to have an "in" through some personal contact or alumni network. I personally know quite a number of folks at Vanguard and one at Janney Montgomery Scott, so I guess that helps. I know for a fact that neither company pays their college hires very high base salaries. I don't know what they pay their MBA hires, but I imagine that it can't be 100K base.

 

[wildcat]

Assest management would be my preference as well because 1) the hours are reasonable,

Really?

 

[bongo2]

Brewer: the fee if you sign up early is $735. Once you add in materials and so on you're well over a grand. If you are suggesting that a grand is such a trivial amount that it is not even worth considering, then a guess you are in a different league from me.

 

[BunsGettingFirm]

Really?

This conclusion comes from my talking with Vanguard people in class. For other sources, see wetfeet.com's asset management interview. What I mean by reasonable is that nobody expects you to pull 18-hour days day in and day out. You still have to be there the full 8 or 9 hours like any other professional job and possibly put in the long hours during busy season.

If you have first-hand experience that is significantly different from what I'm getting, please discuss at length. I'd love to hear about your experience.

 

[brewer12345]

Brewer: the fee if you sign up early is $735.  Once you add in materials and so on you're well over a grand.  If you are suggesting that a grand is such a trivial amount that it is not even worth considering, then a guess you are in a different league from me.

Not that its an insignificant sum, but when you consider that my MBA tuition and books ran about $70k, it is small potatoes.

 

[brewer12345]

Assest management would be my preference as well because 1) the hours are reasonable, 2) the analysis work is similar to the sell-side analysis work at an I-bank, 3) the earnings potential, while not as high as that of I-banking, is nonetheless very lucrative.

The problem is that I read that funds management companies, with the exception of Vanguard, rarely need to hire in droves, so you have to have an "in" through some personal contact or alumni network. I personally know quite a number of folks at Vanguard and one at Janney Montgomery Scott, so I guess that helps. I know for a fact that neither company pays their college hires very high base salaries. I don't know what they pay their MBA hires, but I imagine that it can't be 100K base.

I've wotked for a rating agency, which competes for the same talent. They like to tell their employees that they offer better work-life balance in return for less comp. I think the balance part has fallen by the wayside, but they still pay crap. Even there, the base for an associate analyst is around $100k. Of course, the bonus is usually $10k or less.

I think the hours part depends on the type of employer and the specific shop. Some shops are more relaxed (ratings agencies, some mutual fund complexes, some pension funds, etc.), others are wicked (some hedge funds, etc.). I think the 60+ hour week is far more common than the 40 to 50 hour week in the industry. It usually is a bit better than i-banking though.

 

[BunsGettingFirm]

I'll take the 100K base if there is promise of more. It's not crap pay unless you're talking about NYC or Boston. Unfortunately, most of the openings at Fitch, S&P, and Moody's are in NYC. Then, yeah, 100K sounds great on paper, but you won't be living the Sex and the City lifestyle. You'll go broke just buying a few rounds of drinks.

 

[brewer12345]

I'll take the 100K base if there is promise of more. It's not crap pay unless you're talking about NYC or Boston. Unfortunately, most of the openings at Fitch, S&P, and Moody's are in NYC. Then, yeah, 100K sounds great on paper, but you won't be living the Sex and the City lifestyle. You'll go broke just buying a few rounds of drinks.

Yes, I was talking about NYC. And you are right: it doesn't go far. At least my experience is that sticking around waiting for a promotion or more money is a fool's game. In the three years I was there they gave below-inflation raises every year and I was probably 18 to 24 months away from promotion. No thanks. I took the experience and went elsewhere, which is an extremely popular choice for junior rating agency staff.

 

[BunsGettingFirm]

May I ask what are some of the popular destinations of these junior agency staff?

 

[brewer12345]

May I ask what are some of the popular destinations of these junior agency staff?

Investment banks hoover up some. Hedge funds are very popular lately (pretty much make the market these days). Sometimes buy side research, a fair number go into sell-side. Depending on what exactly you did at the agency, some people go do credit analysis for a bank, broker, etc. When I wa there, my phone rang continually with recruiters because they knew where they could find bright, underpaid people who have a lot of specialized knowledge.

Generally speaking, it isn't a bad place to go do some time and learn things, its just a hard way to make a living while you are doing it.

 

[kaudrey]

Hi,

I'm a CFA too (new to the boards). August to December is enough time to study for Level 1. Just be dedicated about it and you'll be fine.

Good luck!

Karen

 

[saluki9]

Welcome, it's nice to have another one of "us" here