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Is CFA the right way to get into investment banking?
Hello,
I want to pursue career in finance but my verbal skill is not up to the mark. evidently, I ended up with horrendous GMAT score of 580 which could give nothing except shame. Now I am planning to appear in CFA exam L1 and L2 so as to pursure my dream to join top notch investment bank. I am from engineering background so I need advise whether CFA can open up door to me.
* I appreciate if you could also introduce discussion on financial market and products so that people not de la creme could get assistance.
Thanks.
I am a finance postgraduate student from an engineering background. my advice would be that in order to get into IB, do the CFA to not only get the qualification but to help you gain a broad understanding and confidence in the new industry your trying to break into. Also, do an MBA, if you have enough years of work experience an MBA would be better than an MSc finance in employability terms, MBA's are also allowed straight to associate level, whilst finance masters are not as lucky!!
I have no idea how you have done so poorly on the GMAT, however i believe it is very easy, and have faith that if you put much more time and effort in preparation, and do plenty of practice tests, then you can achieve good scores next time, just do not rush it, because its important.
**Very important: when i say an MBA, i mean an MBA at only the highest of B-Schools, you need to go to a target university, the more prestigious the better your chances! this is very important.
Hi,
Did you take the GMAT because you wanted to do an MBA?
MBA is by no means not a prerequisite to go into finance. In fact, engineering background is not a bad thing to break into finance, because it shows that you have the quantitative skills. In my opinion, you have 2 ways to go if you want to make a break into finance:
1) Go in after an MBA or Master in Finance
Bad GMAT scores happen, it is not big deal. If you really want to do an MBA, I suggest you just do some more GMAT practice - there is no miracle formula for the GMAT, it is all about practice. You might want to use Kaplan books or courses (they are a bit pricey, but effective) to do some more practice. I suggest you try to raise your score to about 620-650 so that you have a good shot at a decent MBA school or even do a Master in Finance - you'll get a better return on investment. From 580, this is clearly possible to get to those scores. After school, this should not be a problem to transition into a finance job - note that most engineers tend to go into trading or capital markets role, and opposed to M&A.
2) Make a direct move with the CFA
CFA is a smart move and you are absolutely right, it will open doors. As I said, a lot of engineers move into market roles - traders, quantitative analysts, risk management, finance IT, etc. Those are high-profile jobs. The CFA will prove to employers that you have the required knowledge to work for a financial institutions and I suggest you wait until you pass level 2 to start applying to investment banks, or eve nhedge funds. I have a friend who was an IT person at a hedge fund, took the CFA, and is now moving ino a front office role at this hedge fund, so it is absolutely possible.
What kind of engineer are you? If you are an IT specialist, there are a lot of jobs in Financial Market IT. With hard work and the CFA (at least level 2), you could transition in a front office role without too much problems.
On the financial markets side (which is the place you should focus on), you can either be in risk management (checking traders positions and exposure), be a quant (build mathematical models for trading strategies in various products - derivatives, equities, swaps, etc.), or work in IT development (developing trading applications).
Thank you for quick response.
I am an IT professional developing and supporting financial systems. Working with financial analysts and MBAs closely, I have learnt few things in finance though those are trivial. My work is to support credit risk derivative system which helps front office users do business. So invariably I have learnt about exposure calculations of different financial instruments and deal types. Since my business users do not understand IT, they, for any issue, come to me with business scenario. Hence I need to go through the calculation, find all stress up/stress down in order to provide/replicate actual business case.
Subsequently, I have gained interest in finance and, after staying almost 5 yrs in finance domain, I feel that, I should venture into this domain in greater depth. Initially, it seemed that MBA would be the only option to get into Finance domain. But, as you clarified, I can go with CFA instead and do my MBA later in case I really feel vigor about it.
I found this site yesterday and feel good about response you have provided. I appreciate your effort and hope to get the same in future.
PS. Thanks for better subject line!
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PS
Glad to be helpful! Seems that the transitions for you should be smooth armed with the CFA. An MBA is great but since you're already in a good position to get your target job it may not be a good return on the investment compared to CFA.
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