This is a question asked more than once a week by junior staff in investment banking (all product groups) and sales and trading, as well as people looking to break in. Keep in mind that this discussion is for the Canadian market only. The answer is probably yes if you are in investment banking, and definitely yes if you are in sales (especially a “softer” product such as equity sales or money markets) or an investment banking product group other than mergers & acquisitions/leveraged finance/restructuring (ECM, DCM, Corporate Banking). Traders do not really need the CFA, although we would not recommend against taking it either. Employees in equity research are REQUIRED to become charterholders – it is a key marketing tool, and practically all clients will have it.

If you are in the mid-office or a non-capital markets role and looking to break into investment banking, sales & trading and especially equity research, the answer is also definitely yes – the idea is that if you are not working 80 hours a week, you should be spending the difference between 80 and what you actually work improving your candidacy. For investment banking product groups that are perceived to be less technical and sales, the CFA is a great way to gain credibility in technical know-how, as there is a lot of respect for the rigour and breadth of the curriculum.

It is becoming less and less of a choice – on the trading floor 5 years ago, senior management looked at high performers and asked if they were doing the CFA. If they said no, they would be voluntold. For people being groomed into management, the CFA is an excellent marketing tool (and for good reason, it is not easy). Today, MDs tell investment banking analysts that they are required to enroll (with the implicit understanding that you are not allowed to fail).

Assuming that taking the CFA is not mandatory, it is a good idea for all financial professionals to do the CFA program. These are some of the key reasons why.

• Chances are you are not going to do banking forever – exiting with a CFA is a very good designation and makes you a much more attractive candidate when it comes to the next job, especially if it involves security selection or asset management to any degree
• The CFA improves your marketability internally – If you are rising up in the firm, the CFA is definitely something that gets you an extra point when being considered against other people (of course not as important as being perceived as a revenue generator – but the CFA can help you become a revenue generator as outlined in the next point) as it shows you are knowledgeable and hard-working
• The Curriculum Makes You Knowledgeable – The CFA curriculum makes you a better banker and a better financial professional: the breadth and depth of coverage starting in Level II is impressive and enhances your understanding of valuation and how different products connect – we wouldn’t go as far as to say the CFA will help you pick securities better but the knowledge is helpful in making a more informed decision
• Passing Level II Can Mask Your Bad Grades – If you have a 3.3 or 3.4 GPA and in the interview you explain it down to one bad year because of family issue/boyfriend/lack of epiphany, people may or may not believe you but if you have CFA Level II done with both exams passed on the first attempt it supports the story that you are not intellectually challenged – CFA level 2 covers all 300 and 400 level finance classes and statistics goes more in-depth than the introductory course they give out in most undergraduate business programs
• There Are Networking Benefits – Being in curriculum will expose you to study buddies in the industry, charterholder and candidate events and talks – you will also get a paid week off to study and spend less money and drink less alcohol (probably the weakest supporting argument)

In the US, the answer is generally no unless you want to get into asset management or equity research – and even then, you will have time (paid time off) to study for the exams if you are writing concurrently with work. Unfortunately, you will be fired if you do not pass, which we feel is a more serious repercussion than shame and being held back, so there is the catch there.

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