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How useful is the CFA for investment bankers?
What is the CFA?
The CFA (Chartered Financial Analyst) designation is a professional certification granted by the CFA Institute, which tests and focuses on portfolio management, financial analysis, and generalist aspects of some other areas of finance. To become accredited, the candidate needs to:
1. Pass three six hours exams (which are called "levels": level I, level II and finally level III). The pass rates are typically about 40%-50%.
2. Have a bachelor degree minimum (or equivalent education or work experience)
Should I study a Master or an MBA?
If you want to break into investment banking or if you simply want to boost your career prospects and build a deeper expertise in finance, you may ask yourself what are the pros and cons of going to study an MBA or a Master. In reality, those degrees are very different: not only in terms of content, but also on terms of cost and job opportunities on graduation.
The Academic Content: Master for Specialists and MBA for Generalists
Business School Profiles: The Wharton School
Due to frequent requests, I've asked a couple of students from MBA schools to compile quick "profiles" of their MBA schools. More profiles will come over the next few weeks. Email us if you want a special school to be covered and we'll generate a specific profile for you!
School Background:
The Wharton School is the Business School of the University of Pennsylvania, and is located in Philadelphia, USA, about 2 hours from New York. It was established in 1881, and was the world's first business school ever established.
Should I do an MBA? MBA explained for dummies
What is an MBA?
An MBA is a Master of Business Administration, typically a 2 year degree, but some schools have 1 year MBAs (Insead and IMD). You'll learn mostly about management and leadership, although you can specialise and have a major in finance, marketing, strategy, etc.
You will get taught in small groups of 30-40 people through a combination of case studies and lectures. There are also significant "off campus" learning opportunities such as club activities, trips to companies, competitions, etc, and MANY social events for you to network with fellow students and potential employers.
MBA Pay over the years
Continuing on the pay surveys, here is another quite good survey done by Business Week on MBA pay after 5, 10, 15, 20 years and over their careers. The usual suspects Wharton and Harvard are on top. To take with a pinch of salt though, as the top schools have a large proportion of students going into finance (banking, PE, Hedge Funds), pushing salaries up.
MBA Ranking discussions
Rankings are always big on student's decision, and even though many schools or people will say that they are not important, they in fact are very important. But rather than looking at a specific ranking, you should rather look at a combination of the rankings (Financial Times, Business Week, etc.) and identify trends.
This is our personal summary, but most of the MBA students and recruiter will agree. Based on prestige and perceved quality, here are the "buckets":
Tier 1 MBAs:
Harvard, Wharton and Stanford.
MBAs in Private Equity - education goes a long way
An MBA is typically regarded as a prerequisite to reach the higher echelons of private equity, especially at the larger firms.
But is that true? What does the data tell us?
You will find MBAs are almost in every PE firm
Best study guide for GMAT?
GMAT is a very important part of your Business School applications. It is not the decisive factor though, but while having a good GMAT (700+) will give you a good shot at the best business schools, having a low GMAT (below 650) will definitely keep you out.
So how do you prepare? There are many many books out there, but it all depends on what you requirements are. We personally recommend those books for those who are aiming at a top 10 business school:
- Kaplan GMAT 800
