Is CFA Useful for CAs?

The CFA program offered by CFA Institute (US) has gained a fair amount of popularity in the recent past among CA students who wish to pursue careers in finance and are interested to pursue opportunities beyond accounting and taxation which tends to the outcome for many CA students. CFA is an excellent program if a someone is looking to hone their finance skills and understand the intricacies of portfolio management. However, unlike popular belief, just graduating from the CFA exam might not necessarily be a gateway to Investment Banking or Investment Management roles in India. Being cognizant of this fact is key before jumping on the CFA bandwagon as it is a self-study program and the institute generally does not take responsibility for recruitment.

Depth of CFA Curriculum

From an academic standpoint, the CFA curriculum provides deep value addition to existing finance knowledge of CAs (and even fresh engineering graduates) by providing insights into financial markets, portfolio analysis, investment management, and security analysis (both debt and equity). The curriculum also delves into quantitative analysis and behavioral economics related to finance. Overall, the curriculum is immensely relevant for finance enthusiasts; the exam format is also designed in a manner to test practical understanding of the topics (rather than encouraging mugging up of theoretical concepts). However, due to the remote learning nature of the program, CFA has its limitations when it comes to developing spreadsheet skills or building financial models and /or pricing complex financial instruments like derivatives practically.

Cost-Benefit Analysis

The CFA program would approximately costs students between US$2550 – US$4800 (Rs 2 lacs to Rs 4 lacs) depending on how early one registers for the exams. The above estimate assumes that one clears all three levels in the first attempt. Every additional attempt may cost a student an incremental $1000 (Rs. 76,000) on average.

Apart from the learning, pursuing CFA helps students convey to potential recruiters that they are interested in finance (especially CAs to demonstrate their interest beyond Accounting & Taxation). It may also be value accretive during business school applications. However, some Indian B-Schools like IIM A,B and C generally don’t provide extra points for completing the CFA program at the application stage, unlike other professional qualifications (e.g., CA, CS).

One also needs to factor that there is no structured recruiting process (either campus placements by CFA institute or recruitment drives by corporates) for CFA candidates in India. Therefore, CFAs are expected to network to get good roles in their area of interest including Equity Research, M&A Advisory, or Investment Management roles.

Conclusion

CFA is a great program to enroll in if you have an interest in finance. It is also a good introduction for students who may not have pursued finance in with high academic rigor (Eg – first- or second-year commerce students or engineering students and graduates). The program can be completed while working on a full-time job as well if one puts in sufficient effort depending on their pre-existing knowledge of the subject matter. The CFA program serves as a good means to the end of pursuing opportunities in finance as it well recognized and accepted at a string certification in finance by almost all in the finance industry. However, it might not necessarily be an end to getting structured recruiting opportunities post-graduation.