At the end of summer, I moved apartments in New York (hadn’t moved in three years) which anyone that knows is incredibly difficult and taxing. So the entire summer I was consumed with enjoying life and finding a new place to live. I’ll have some time in the coming days/weeks to answer your questions and deal with this silly litigation that’s been going on.
Good luck studying!
Good luck studying!
Good luck studying!
Life will go on but let me tell you it’s disappointing. I’ll try to enjoy the fall before I saddle up again to take level III. For everyone else who took a level of the CFA exam, I hope you fared better than I.
Wire: BLOOMBERG News (BN) Date: Aug 18 2009 10:52:14
By Michael J. Moore
Aug. 18 (Bloomberg) - A lower percentage of Wall Street job applicants passed the third and final test to become Chartered Financial Analysts, a designation that offers an edge during Wall Street’s worst shakeout in at least three decades. Forty-nine percent of candidates passed the third stage of the test, down from 53 percent last year, the Charlottesville Virginia-based CFA Institute said in an e-mailed statement today. Forty-one percent of the people who took the Level 2 test passed, down from 46 percent a year ago.
Candidates take the CFA exam betting the certification can become a path to better jobs, higher salaries and a deeper understanding of finance. Completing all three levels costs about $2,500 and takes an average of four years. Financial firms cut more than 328,000 jobs since global markets started to unravel in 2007, according to data compiled by Bloomberg. “In a tight job market, having the CFA charter is a significant distinguishing factor, and we saw much lower no-show rates for Level I of the exam, which indicates how serious candidates are about their careers,” said Tom Robinson, managing director of education at the CFA Institute.
Last month, the CFA Institute said 46 percent of Level I participants passed, up from 35 percent a year earlier. Across the three levels, 45 percent of the 104,111 test takers passed. A record 128,600 people enrolled to take one of the three levels of the exam in June.
For Related News and Information:
Stories about banks: NI BNK
Top financial news: FTOP
Bloomberg credit crunch scorecard: WDCI
Are your notes updated to reflect the content changes in the CPA Exam after you took the exam in 2007?
Unfortunately, my notes do not reflect the updates for CPA exam after 2007. I have posted my notes more as an example of how you should study. As I mentioned in my posts, the best way to pass the simulations is to complete as many practice simulations as possible. It sounds cheesy, but there really are no shortcuts. The body of knowledge from which the questions are constructed from has limits. As a result, the examiners can only ask a question in so many ways. So the more practice problem you complete, the closer you are to mastering the material.
Why don't you updated your notes for the changes in the CPA material?
I created this blog because people always asked to borrow/use my notes for studying. So I created a centralized source to access my notes. I'm merely an individual who created this site not to make money but to share insight. In addition, I don't have access to the 2008 or 2009 material changes. I've aready passed the CPA exam so I'm not purchasing the study materials again. If you know what the changes are let me know and I'll update my notes.
"Which exam is harder? CPA or CFA?"
Short Answer: The CFA is much more difficult
Long Answer: The CPA is essentially one exam split into 4 sections. You can master one of the sections in a month. And if you fail a section, you can take it again 3 months later. I consider the CFA three separate exams simply because the material covered in each exam is so expansive. In addition, if you fail the CFA exam you have to wait a whole year to retake the exam (except for level 1 in which case you have to wait 6 months)
What are the education requirements for the CPA?
The education requirements for the CPA differ from state to state. Log onto the NASBA website and find the requirements specific to each state (http://www.nasba.org/nasbaweb/NASBAWeb.nsf/wpecusm?openform).
How hard is the ethics exam for CPA candidates?
Only certain states require the ethics exam. I’m licensed in NY and the ethics part is not required (or wasn’t went I went through the process). From my understanding, the ethics portion is more of a nuisance than anything. And I actually thought it was a take home exam and then you mail it in – maybe I’m wrong. If you just put in the time, you’ll be fine.
Why are you biased against the CFA?
I’m not biased against the CFA. I do believe the CFA holds value and that it will give an individual a competitive edge. However, my post compares the probabilities of switching careers. Graduating from a top 10 MBA program gives an individual a much higher probability of switching careers compared to completing three levels of the CFA. I am not bias but merely stating my observations based on experience and extensive research with various industry professionals.
I've heard that accounting firms are pretty reluctant to sign off hours so quickly (especially if there aren't hours in areas such as planning). Did you ever experience any such difficulties in getting your hours signed off?
PwC (which I assume is the same at the big 3) tracks your hours in a firm wide time sheet database system. If you have 1 year worth of hours in the system you’ll have no problem getting signed off. At the big four, it’s not your manager or partner who signs off on your hours. There are special employees whose sole job is dealing with CPA licensing. These people don’t know you, they simply receive your CPA docs, reference the database, and sign off.
When I was leaving PwC, the firm was making attempts to better track how employees were spending their hours (planning vs control testing vs F/S tie outs, etc). So now there may be a way for firms to track where you spent your time. If that’s the case I have two pieces of advice (1) try to get more involved in parts of project that will meet your hours requirement (2) after 1 year of experience submit your CPA docs regardless. Cause like I mentioned, at big firms the process is standardized, so if you meet the "system requirements" you'll be signed off.
Questions/Post by Anonymous
Hi guys. Not sure if anyone will read this since the last comment was a few weeks ago.
Here is my situation: I am 37 today. I worked as a chemical engineer from 22-26, then an operations manager of a manufacturing plant from 27-31, and then as a controller for a manufacturing plant from 32 to 37. I got my MBA from a top school, which is one reason I was hired as a controller (without an accounting degree). To be fair, I was very good in my accounting classes during my MBA and always liked accounting, which is why I wanted to be a controller.
In the next 2 years, I may be moving to another part of the USA, and would like to begin planning for my next job. My initial idea was to sit for the CPA exam in a state that I would meet the qualifications for (some states accept an MBA as a sufficient prerequisite). That way, with a CPA in hand, no company would doubt my accounting ability (I can talk a good game and my 5 yrs experience helps, but there is always some guy on the other side of the desk who wants to see the 3 letters "CPA").
Any ideas or thoughts? Seems like my chemical engineering degree is more and more useless!
I may not continually post to my site, but I’m always checking in on it.
In regards to your question. The best website to compare state requirements is http://www.beckercpa.com/state/index.cfm. However, I’m not sure you can just take the exam in any state, thereby, circumventing the education prerequisites. Either contact Becker or NASBA. Someone should be able to answer that question fairly quickly.
If you want to be an accountant, a CPA will always command a premium in the market place. However, it is not required for many jobs. The only job you actually need a CPA designation for is as partner at a public accounting firm (because they sign audit opinions). At what type of firm are you a controller at? In your job search apply to companies that are similar to your current firm. Accounting experience is industry based. Meaning if you were a controller at a manufacturing firm your experience will not carry over and help you as a controller at a finance firm (it’s relative but a general rule). There are many accounting nuances, rules and standards that only apply / are used by particular industries. I think you will be extremely competitive among candidates with a MBA from a top school, similar industry experience under your belt, and you interview well.
Planning, studying and taking the CPA at minimum takes 6 months to accomplish (with an average of about one year). So if you plan to move around that time frame, I would recommend concentrating on getting a job vs getting the CPA.
Like I said, industry experience will matter most, then your personality, then your MBA (which will essentially replace the CPA for an interviewer mentally). Hope this helps. Let me know if you have any other questions.
Questions/Post by Max Morland
Great blog. I'm in the middle of the CPA exam and am thinking about my post-exam career path. Currently I work in corporate accounting. I don't think I can use my work experience to qualify for the work requirement of the CPA license. For that reason I think there will come a time that I will need to go to work in public accounting, which I feel will be a step back in my career, but necessary to obtain a CPA license. Any tips about the direction of my post-exam career path? Do I shoot for a big 4 firm, or a local firm? Or, should I keep my job and freelance at a tax firm? The thought of going into auditing doesn't sound very attractive, but is something I'm willing to do to obtain the CPA designation. Thanks!
In my opinion, auditing work is not attractive. However, I know many people who enjoy it (a lot depends on your team and your client).
I pretty much answered your questions in the comment post above yours in the "CPA vs CFA vs MBA" section. So re-read my comments there. A quick recap though:
1) double check and scrutinize the CPA work requirements in your state
2) Limit your prospective job options to those that can meet the work requirements
3) Pick a firm/job opportunity based on a number of quantitative and qualitative factors (salary, client opportunities, work/life balance, etc).
Hope this helps.
Questions/Post by Chris
First of all, thanks so much for putting this website together. Your outlines definitely helped me with the CPA exam.
That being said, I too am trying to get away from public accounting and move into the consulting field. My plan this whole time was to go for a CFA right after I had passed the CPA. The idea was that the CPA / CFA combo would be enough leverage to get me out of public accounting and into a more "accounting consulting" role like TS. From there, I figured the move into a bigger consulting firm (or at least a top 10 MBA program) would be a lot easier.
But your experience seems to tell a different story as to how much clout the CPA-CFA combo really has on potential employers. I just wanted to ask then, is pursuing a CFA really worth it if you want to use it as leverage to get a better job outside of public accounting? Also, do you think that the CPA / CFA combo actually helps you get into a top 10 MBA program?
Do let me know your thoughts. Your plans in life (and even roadblocks it seems) sound so similar to mine, except you're much further along that I am.
Thanks for your thanks!
For star employees at big 4 accounting firms, there are (or were) plenty of opportunities in transaction service groups, forensic accounting firms, and general accounting based consulting roles. However, most groups/firms have put a freeze on hiring or mobility has become more difficult. That said, the CFA will always differentiate you in the marketplace, but I don’t believe it necessary to make the move into TS. My first piece of advice is search out, network, and set-up informational interviews with as many professionals in TS or forensic accounting groups as possible. Go straight to the source, do some due diligence, and most importantly, show your interest and make meaningful contacts. You may be able to make the switch without the CFA.
In regards to your career plan, you need to identity your ultimate goal. Is it to go to a top 10 business school (and then work in whatever interests you most)? Or is it to work at a top 5 strategy consulting firm? It’s my understanding that switching into strategy consulting from a different career is incredibly difficult. Therefore, coming from your background, you have to go to a top 10 business school to work at a top strategy consulting firm.
I’ve never heard of anyone with the CFA designation then going to business school. So I can’t give any detail on the impact the CFA has as a competitive edge to getting into a top MBA program. Remember, the CFA takes a min of 2.5 years to complete then 4 years work experience. For me, I did a 1 yr masters, the CPA and the CFA – I’m all studied out. The thought of studying for another exam is too much to handle. So if you are pursuing the CFA to get into a B-school, I think costs outweigh the benefits of that plan.
I firmly believe that the CPA / CFA combo is enough to switch careers in a global bull market. However, that path is by no means certain. The only way to ensure you can switch into any career is by attending a top 10 business school. Trust me, if you want to make a career switch study for 6 months and take the GMAT. If you don’t score high enough to go to a top 20 MBA school, then take the CFA. All in, the process of getting into a business school is 1 year (6 months GMAT prep, 6 months B-school applications) vs the CFA which is 3 years.
I'm interested to discuss further if you have additional questions or commments.
Question/Post by Mark
Thanks for your help to the crowd.
Here is my background: I moved to America four years ago, and with luck, I unexpectedly got into Cornell. I graduated in this January with a finance major. Job market is tough plus I didn't prepare well for my interviews. I just decided to go for MBA in accounting, and get the CPA in the near future.
I passed almost all the top MBA deadlines, and the school I'm looking at now is Hofstra University (on Long Island, close to my house). I know that Cornell-->Hofstra doesn't really look good on my resume, but the program is not bad, and I probably will get in without work experience, also it's close to house, and very possible scholarships. Considering my situation and background, I think this is a good (and probably the last) opportunity for me. I want to start in this fall rather than 2010.
Any thoughts and advice?
I think you know my answer. But before I give my thoughts, you need to clarify a few things on your current situation. Do you want to pursue finance or accounting? Are you currently employed? If so, is it a worthwhile opportunity? What is your ultimate career goal. My thoughts/advice will vary dramatically based on your answers.
1. Do you want to pursue finance or accounting? I don't know. I studied finance in Cornell, and I'm sure that I like finance. Not sure about accounting, just feel that finance + accounting would be strong, and opening more doors.
2. Are you currently employed? No I am not. I graduated in December 08, didn't get a job.
3. What is your ultimate career goal? Director of a big corporation's China/Asia office.
Well Mark, in my opinion your options are straight forward yet difficult to endure. Based on what you’ve said, you should not pursue an accounting MBA or CPA. As I’ve mentioned in previous posts, once you’re an accountant you’re an accountant for life. Based on what you’ve said, you should not attend Hofstra’s MBA program. Going to Hofstra is the easiest route but I believe it’ll be a detriment to your long term goals. You should be spending all your time doing 2 things: (1) recruiting for a job (2) studying for the GMAT.
(1) You should be connecting with the Cornell career center and various recruiting firms in New York. You have a finance degree from a prestigious school and you need to leverage the alumni base. Firms are hiring but the competition is fierce and the interview process is arduous (you need to prepare and study for interviews like you would a class)
(2) If you don’t go to a top 10 (maybe 20) MBA program you’re wasting money and time. Hofstra is a great school but the finance world is superficial and vain. Don’t take the easy route. Wait another year and apply to the top b-schools. Since you don’t have work experience. You need to crush the GMAT (get above a 700) and then go do volunteer work in Asia (learn a language or two) until you have to apply to schools next year.
If you land a good job – great! You can defer your GMAT score until you’re ready to go to grad school. If you do well on the GMAT – great! You can spend the next year differentiating yourself for applications.
Mark it appears you have the tools to achieve your goals. All you need is the desire. Both recruiting and studying are time consuming and exhausting (both mentally and physically). So you are going to really have to commit to the cause. Don’t view this year as wasted, view it as progression.
Question/Post by Greg
First off, thanks for such great notes. They're very useful in preparing for the CPA exam. Although you're going more of the finance route, I wanted to get your input on where you think I could possibly go with my background.
I'm currently taking the CPA exam and should be done by the end of the year. I passed the CISA exam last year (IT Audit) and am currently working for a Big 4 accounting firm. I don't want to be pegged to the accounting field for the rest of my life as you suggested is possible after passing the CPA exam and would like to to incorporate it into something IT-related, possibly being CIO of a company later on.
Do you think it's possible to be CIO without going for my MBA and just with CPA/CISA and public accounting experience? Are there any other paths you suggest I could take or would an MBA be the best route? Thanks again for your help.
I don’t know a great deal about the career path of a chief information officer. However, I do know that experience counts more than anything. And a MBA will help your career more than a CPA. IT executives attend grad school to gain additional business management skills and pedigree not technical expertise. If your goal is to become CIO of a corporation, I would recommend working in an IT consulting role at a prestigious firm (which sounds like you’re doing). Then differentiate yourself by attending a top MBA school. It will make you more marketable and open more doors for you in the long run.
Question/Post by Anonymous
I was googling over which is better - cfa or mba when i hit upon this website. I always wanted to do an mba but procrastinating about it made me cross the psychological 30+ age barrier. I've heard its tough to break in to IB in that scenario even if one is lucky enough to get a MBA from one of the top 10/20 schools.
The way the economy is going quitting jobs for getting MBA might not necessarily work out in your favor, so the other alternative i was thinking was to do CFA. Given that I've read people commenting having CFA didn't really help much, except to differentiate one from another who didn't have a CFA, would anyone know if i opt to do CFA might help or i should just pull up my socks and concentrate on doing MBA.
Am in IT for the past 9 yrs so definitely looking for a growth in my stagnant career even if it means some change from my current line.
Any comments would be highly appreciated.
I think you answered your own question fairly accurately. I don’t have the CFA just yet, but what I’ve seen leads me to believe that a gaining a CFA will not directly lead to career switch. I’ve also heard that the older you get the more difficult it becomes to land an IB associate role from a top school.
However that said, in your position going to a top 10 school is your best choice to change career paths into straight finance. My advice is to worry about the big things first. And the biggest hurdle is not getting a good job after b-school, it’s going to a top 10 business school. As you said, pull up your socks and go to a top b-school. Then when you’re looking for a job – a door more meaningful than IB will open.
Question/Post by James
I just want to thank you for your blog and the valuable insights that you have shared. I have gained much more knowledge about the CPA/CFA combo from your blog than any other website or working professional I have come in contact with.
I also seem to be sharing the same path that you've taken. I'm taking REG for the second time this Sat, and assuming I pass, i will only have AUD left. I will have met my audit hours by the time I pass all exams so I should be receiving my certification shortly afterwards. I also plan on taking level 1 of the CFA this December, although it is quickly approaching.
However, I have become worried upon reading about your difficulties of making the switch into the finance industry with a CPA and level 3 candidacy on your resume. I was planning on making the same switch after passing level 1. Hopefully this transition will become easier with a bull market and a CFA certification.
But i have realized a potential roadblock to your CFA certification and plans to make the career switch. Doesn't a CFA certification require 4 years of investment related experience? So doesn't that mean your years spent at PWC doing audit work wouldn't count towards your CFA? I really hope i'm wrong. Because if not, I may have to seriously start considering whether or not a CFA is for me.
Thanks for the kind words. If you’re a smart and driven individual, there is no question that CPA/CFA will pay dividends in the future. It’s an incredibly elite and prestigious combo. I agree a bull market and industry friends will help facilitate a switch into finance. However, I’m merely cautioning based on your ultimate goal and unique circumstances.
You are correct, the CFA does require 4 years investment related work experience to actually receive the charter. An individual must spend at least 50% of their time in the investment decision-making process in order for work experience to qualify. As a result, my time at PwC will count for the other 50% and I’m working on the 50% investment decision making process portion now and probably for many years to come. If I pass level 3 (my fingers are crossed) I don’t expect to earn the charter until realistically 2012, maybe 2013.
For more detail:
However, passing all three levels of the CFA is the tough part (and the true value added of the designation). Any employer will see that you’ve passed the exam and will be willing to invest in you until you earn the hours for the charter. So don’t let the work experience requirement deter you from taking the CFA. You need to weigh all the different options, including pros and cons, based on your goals and circumstances. Hope this helps. Wish you the best.
Wire: BLOOMBERG News (BN) Date: 2009-07-28 15:18:18.60 GMT
By Michael J. Moore
July 28 (Bloomberg) -- A higher percentage of hopefuls for the Chartered Financial Analyst designation passed the first test in a three-step process that may give them a hiring edge during Wall Street’s worst shakeout in at least three decades. Forty-six percent passed the Level 1 test of the CFA exam,up from 35 percent in December and 35 percent a year ago, the CFA Institute said on its Web site today. A record 128,600people enrolled to take one of the three levels of the exam in June, the Charlottesville, Virginia-based institute said.Results for Levels 2 and 3 will be released on August 18. A CFA is a valued credential on Wall Street held by Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., and Abby Joseph Cohen, Goldman Sachs Group Inc.’s senior investment strategist. It’s especially true after financial firms cut more than 328,000 jobs since global markets started to unravel in 2007, according to data compiled by Bloomberg. Candidates take the CFA exam betting the certification can become a path to better jobs, higher salaries and a deeper understanding of finance. The not-for-profit CFA Institute recommends candidates spend at least 250 hours studying for each phase of the test. Completing all three levels costs about$2,500 and takes an average of four years.
There are about 84,000 CFA charter holders globally,according to the institute. About 35 percent of the 44,063people passed the first test in the process last June. Candidates from 154 countries were scheduled for three levels of the CFA exam. The first level of the exam is offered in December and June; the final two levels are administered only in June. Last year, 46 percent passed the second test and 53percent of participants passed the final level. To qualify for CFA designation, a person must be employed in a financial job, such as a broker or an analyst, and have four years of relevant experience. Topics range from ethical standards and securities valuation to financial statement analysis and portfolio management. The CFA program started in 1963 and stems in part from Benjamin Graham, a pioneer of value investing who mentored Warren Buffett and advocated a rating system for financial analysts.
For Related News and Information:Stories about banks: NI BNK
1 - Statistics - Formula Sheet Mini Test Level II
5 - Fixed Income, Derivatives, Alternatives - Formula Sheet Mini Test
have been removed as a result of a third-party notification that it holds the copyright and has not given permission for it to appear on Scribd.com.
I am confused as the material in my notes, including the formulas, are finance industry standards. How can the CFA Institute own copyrights for example over the convexity formula? Am I wrong? If I am infringing I will glady remove the material but I'm not entirely sure that I am. Does anyone have any thoughts? Much appreciated.
Wire: BLOOMBERG News (BN) Date: 2009-05-13 04:00:01
By Michael J. Moore
May 13 (Bloomberg) -- A record 128,600 investmentprofessionals have enrolled to take the Chartered Financial Analyst exam in June, angling to gain a hiring edge as thefinancial-services industry sheds jobs. Candidates from 154 countries are scheduled to take one of three levels of the CFA exam, the Charlottesville, Virginia-based CFA Institute said yesterday in an e-mailed statement. The first level of the exam is offered in December and June; the final two levels are administered only in June. Last year’stotal of 118,500 candidates was the previous record. Professionals take the CFA exam betting the certificationcan become a path to better jobs, higher salaries and a deeperunderstanding of finance. Financial firms have cut more than 311,000 jobs since the credit crisis began in 2007, according todata compiled by Bloomberg. “Now more than ever we need well-trained, ethicallycentered investment professionals operating in the financialmarkets,” Bob Johnson, senior managing director of CFA Institute, said in the statement. “Candidates and charter-holders regularly tell me that when looking for a new job orworking with potential and current clients, the CFA designation distinguishes them from those without the charter.” Wall Street has suffered from the financial crisis that claimed Lehman Brothers Holdings Inc., Merrill Lynch & Co. and Bear Stearns Cos. New York City has lost more than 23,000 financial jobs from the beginning of 2007, and that number maydouble by the second quarter of 2010, according to the city’s Office of Management and Budget.
250 Hours of Study
There are about 84,000 CFA charter holders globally, according to the statement. The not-for-profit CFA Institute recommends candidates spend at least 250 hours studying for each phase of the test. It costs about $2,500 and takes an average of four years to complete all three levels. Of the 49,797 people who sat for the Level 1 exam inDecember, 35 percent passed. Topics range from ethical standards and securities valuation to financial statement analysis and portfolio management. The CFA program started in 1963 and stems in part from Benjamin Graham, a pioneer of value investing who mentored Warren Buffett and advocated a rating system for financial analysts.
For Related News and Information:Stories about financial firm hires: NI FINHIRE
2009-01-28 17:46:13.929 GMT
By Ian Katz
Jan. 28 (Bloomberg) -- A smaller percentage of candidates passed the first test of the Chartered Financial Analyst exam, a three-step process aimed at gaining a hiring edge as job losses accelerate in the financial-services industry.
Thirty-five percent passed the initial test, down from 39 percent last year, the CFA Institute said in a statement today. Almost 50,000 people worldwide took the first stage in December, a 25 percent increase from a year earlier, the Charlottesville, Virginia-based institute said.
"The number of hours candidates spent studying the material" is the main reason the percentage of people who pass varies, Bob Johnson, the institute's deputy chief executive officer, said in an e-mail.
Candidates take the exam betting the certification can become a path to better jobs, higher salaries and a deeper understanding of finance. The not-for-profit CFA Institute recommends candidates spend at least 250 hours studying for each test phase. It costs about $2,500 to
complete all three levels. Demand for the certification rose as job losses mounted in the
financial-services industry. Employment in New York City's securities industry fell 10 percent to 168,600 in December from 187,800 in October 2007, the New York state comptroller said in a report today. The state will have lost as many as 225,000 jobs and $6.5 billion in securities industry-related tax revenue by Oct. 31, the state has said.
To qualify for CFA designation, a person must be employed in a financial job, such as a broker or an analyst, and have four years of relevant experience. Topics range from ethical standards and securities valuation to financial statement analysis and portfolio management. About 20 percent of candidates who begin the test process will become charter holders, a designation now held by 86,968 people, according to the CFA. About two-thirds who take Level III successfully complete the process.
The CFA program started in 1963 and stems in part from proposals by Benjamin Graham, a pioneer of value investing who mentored Warren Buffett, for a rating system for financial analysts.
For Related News and Information:
News securities firms: NI SCR
Top financial stories: FTOP
Stories about job cuts: NI JOBCUTS
Stories about financial services: NI FIN
--With reporting by Henry Goldman in New York. Editors: Steve Geimann,
Alec D.B. McCabe
To contact the reporter on this story:
Ian Katz in Washington at +1-202-624-1827 or email@example.com
To contact the editor responsible for this story:
Alec McCabe at +1-212-617-4175 or
CPA, CFA or MBA?
It’s not a question of which one is better. It’s a question of which one is better for you. Traditionally, the CPA would lead to a career as a CFO; a CFA was on the path to become a portfolio manager; and a MBA would eventually become a corporate executive. This notion still holds today, however, achieving one of these certifications no way guarantees success.
Deciding which certification to pursue is usually made subconsciously. In our daily lives we read, talk and listen to friends, family and colleagues. Based on these interactions, we develop a superficial understanding on which certification to pursue. After much career and soul searching, I've come to realize that the most important question to ask before choosing a path is “what do I want to do?”
Do I want to be a CFO of a hedge fund?
Do I want to be a portfolio manager at a hedge fund?
Do I want to be a managing director at a private equity firm?
Do I want to be VP of business development at a corporation?
Now this might seem easy, but in reality it’s difficult. It’s difficult to verbalize why you want to pursue a particular career. My advice is follow the work, not the money. Regardless of the risks or the sunk costs, pursue your passion.
The Certified Public Accountant certification is a benchmark credential. It carries stature, significance and job security. In economic booms or busts, accountants are always needed. The more personable and diligent you are, the more success you will achieve.
Accounting is the basis of business. And being an expert in accounting gives you a unique business perspective that your other friends might not possess. However, the thing I have come to realize is that once you’re labeled an accountant, you may be an accountant the rest of your life. It’s incredibly difficult to make the switch into a different career path within the business world (when I say business world I mean hedge fund analyst, private equity associate, business development).
My opinion on the matter might be affected by the economic environment in which I recruited. It is difficult to switch careers in a bear market. Ultimately though, my conclusion is drawn from the countless interactions with professionals throughout my recruitment process. Every time I would talk with headhunters, recruiters, HR and interviewers, it would become apparent that they just wanted a two year analyst from an I-bank or consulting firm. My two years at PwC didn’t mean a thing to anybody. They would always tell me of a great job in the middle or back office and convince me that was the best role for me.
I am not a Chartered Financial Analyst charter holder. So I cannot express the opportunities that have or have not presented themselves as a result of the CFA. However, as a Level III candidate, no unique opportunities have appeared. No special career doors have opened. When I was recruiting, it was thought more of a differentiation than a value added credential. I am interested to know what the future holds if I successfully pass the third part, complete the work experience, and receive the designation.
After talking with many people and seeing it first hand, I am convinced the only sure way to change career paths and make it to the top echelon of finance, without a background in investment banking or strategy consulting, is to attend a top 10 MBA school. Of course, you can get great finance jobs through other methods (that’s what I’m hoping to do) but this way seems most certain.
So if you want to work in private equity or at a hedge fund and are not an investment banker or strategy consultant, I highly recommend crushing the GMAT (above 700) and going to a top 10 MBA school.
I have merely outlined my insight based on experience, which I hope can help you better decide which certification path to follow. Remember though that no path is certain or on a straight line.
Half the battle is applying, paying and scheduling either exam. It takes a lot of research to understand what you need to do in order to be prepared. I assume that you have a familiarity with your respective exam but if you don't start here
For the CPA - read through the CPA Candidate Bulletin
For the CFA - visit the CFA Institute
Early Sept..... Start Master's in Accounting Program
End of Nov..... Apply for CPA NTS (BEC & FAR)
[For NY it usually takes longer to process NTS]
Mid Jan..... Receive NTS, schedule BEC and FAR exam,
purchase Becker CPA Review through PwC
End of Feb..... Start studying for BEC
Early April..... Take BEC exam, after exam start studying for FAR
Late April..... Apply and pay fees to sit for CFA level I in December,
purchase Stalla CFA Level I Review
Mid May..... Take FAR exam, after exam apply for NTS (AUD & REG)
Late May..... Receive NTS, schedule AUD & REG, start studying for AUD
Mid June..... Receive BEC and FAR scores
Mid July..... Take AUD exam, start studying for REG
Mid Aug...... Take REG, start studying for CFA level I
End of Sept..... Receive AUD and REG scores
Early Dec..... Take CFA Level I Exam
End of Jan..... Receive CFA score, apply and pay fees for Level II,
purchase Schweser CFA level II Review materials
Early Feb..... Start studying for CFA level II
Early June..... Take level II of CFA exam, then Party Party Party
Mid August..... Receive CFA score, then Party Party Party
Mid September..... Sign up and pay fees for Level III
Early Feb..... Start studying for CFA level III
Early June..... Take level III of CFA exam, then Party Party Party
Early Feb..... Start studying again for CFA level III
Early June..... Take level III of CFA exam again, then Party Party Party
Hopefully my timeline indicates how meticulous I was in planning for the exams. If you want to be successful you have to plan 6 to 18 months in advance. Anticipate future school, work or life events that will impact your ability to study. The last thing you want is to pay $X and not be able to take the exam or, even worse, not be able to adequately prepare and fail. For the last 3 years all I've done is study, work-out and, very rarely, party. I wasn't able to spend enough time with the people I cared for. I sacrificed a lot and you'll probably have to do the same.
I highly recommend using Becker CPA review to study for the exam. The lectures are painful (especially by Duffy & Gearty) but are definitely worthwhile. Use my notes as a refresher, then complete as many practice problems as possible. The more problems you complete, the better your chances of passing.
CFA Level I Exam
I used both Stalla and Schweser review materials for this exam. I originally bought Stalla, viewed all the lectures, and studied based on their materials (this is before the CFA Institute sent study materials). However, two months before the exam I talked extensively with a friend about his experience taking level one. My friend advised against using Stalla, because he thought Stalla focused too much on the details and that the practice questions from his review did not reflect the questions he faced on exam day. He recommended using Schweser. So I purchased Schweser notes on Craigslist and supplemented my Stalla materials with Schweser.
Stalla's video lectures are much better than Schweser's video lectures. However, Schweser's written study materials and questions are much better than Stalla's. In addition, the CPA institute now sends candidates study materials. I recommend picking study materials based on your study preference/habit, then stick with it. There is so much material to cover that it's virtually impossible to comprehensively use 2 different study sources.
CFA Level II Exam
This exam truly tests your endurance. After spending all that time and energy to pass level I, the last thing you want to do is essentially do it all over again. Keep in mind that the material builds of the concepts from level I. Make sure to differentiate between old and new concepts, and focus on the key testable material.
The CFA institute now issues course materials along with optional sample exams. I still bought Schewser notes and I regretted it. If you are a disciplined individual who can self-study, I highly recommend just using the materials that the CFA insitute sends. The books and sample exams are great.
I studied from the beginning of February to June. At the time, I was working about 70 hours a week. When I wasn't working I was studying. If you're serious about passing this exam, I recommend you do the same.
Half the battle is applying, paying and scheduling either exam. It takes a lot of research to understand what you need to do in order to be prepared. I assume that you have a familiarity with your respective exam but if you don't
For the CPA - read through the CPA Candidate Bulletin
For the CFA - visit the CFA Institute
Early Sept Start Master's in Accounting Program
End of Nov Apply for CPA NTS (BEC & FAR) [For NY it usually takes longer to process NTS]
Mid Jan Receive NTS, schedule BEC and FAR exam, purchase Becker CPA Review through PwC
End of Feb Start studying for BEC
Early April Take BEC exam, after exam start studying for FAR
Late April Apply and pay fees to sit for CFA level I in December, purchase Stalla CFA Level I Review
Mid May Take FAR exam, after exam apply for NTS (AUD & REG)
Late May Receive NTS, schedule AUD & REG, start studying for AUD
Mid June Receive BEC and FAR scores
Mid July Take AUD exam, start studying for REG
Mid Aug Take REG, start studying for CFA level I
End of Sept Receive AUD and REG scores
Early Dec Take CFA Level I Exam
End of Jan Receive CFA score, apply and pay fees for Level II, purchase Schweser CFA level II Review materials
Early Feb Start studying for CFA level II
Early June Take level II of CFA exam, then
Party Party Party
Mid August Receive CFA score, then
Party Party Party
Mid September Sign up and pay fees for Level III
Early Feb Start studying for CFA level III
Early June Take level III of CFA exam, then
Party Party Party
Hopefully my timeline indicates how meticulous I was in planning for the exams. If you want to be successful you have to plan 6 to 18 months in advance. Anticipate future school, work or life events that will impact your ability to study. The last thing you want is to pay $X and not be able to take the exam or, even worse, not be able to adequately prepare and fail. For the last year and half all I've done is study, work-out and, very rarely, party. I wasn't able to spend enough time with the people I cared for. I sacrificed a lot and you'll probably have to do the same.
Ethics and Statistics - Formula Sheet Mini Test
Economics - Formula Sheet Mini Test
Fin Statement Analysis - Formula Sheet Mini Test
Fin Corp Finance, Portfolio Mgmt & Equity Analysis - Formula Sheet Mini Test
Fixed Income, Derivatives, Alternatives - Formula Sheet Mini Test
Good luck studying!
In my opinion, this is the trickiest of the 4 sections. Every answer came down to 2 answer choices. That's because the majority of answers are qualitative and the differences between the answers are one or two words. So really pay attention to the details in this section.
AUD - Study Notes 1
AUD - Study Notes 2
AUD - Study Notes 3
AUD - Study Notes 4
AUD - Study Notes 5
AUD Formula Sheet Mini Test