Can you tell us about the CFA exam and describe the difference in each level

Yes. Let me run through it level by level.

The L1 exam is multiple choice but has wide syllabus: all asset classes, Corporate Finance, Economics, Financial Reporting and Analysis, Quantitative Methods, and even a heavily weighted (and tricky!) section on Ethics. Although slightly general in nature, I have found it to be great primer to people without a traditional finance/business background. It ensured that I was on solid ground, be it a lunch with the boss or day to day business meetings. Suddenly the Financial Times started making sense to me.

L2 is where you get deep into valuation methods across asset classes. Your ability to read Financial statements is strongly tested here. The curious thing is that valuations come up very often in business, even if you are not working in finance and that the ability to think about the ‘value’ is a huge plus to have.

L3 is very heavy on Portfolio Management and Wealth Planning. What makes it harder is that half of L3 is a subjective exam, so the ability to give ‘to the point’ answers while keeping an eye on the clock is key. Although, I wasn’t going to Portfolio/Wealth Manager anytime soon, the syllabus was great training for getting a big picture view of these jobs.

You’ve got a CFA & are now pursuing an MBA degree, what is the advantage of doing both

Two things drove me to earn the CFA designation: the desire to expand my knowledge (coming as I did from an Engineering background) and to differentiate myself from other applicants in the job market. At that time, it was important for me establish myself in the industry.

Similarly, while the MBA is learning about Operations/Strategy/Negotiations/Change Management/ How Organizations work etc. and breaking into new sectors/geographies; it is also about Networking among people from diverse backgrounds and learning from their experiences. Thus, the MBA makes me a more ‘compete’ person.

Also, the brand recognition of a top MBA and the avenues it opens up can be a huge plus in the long run.

In summary: (MBA = Broad and General Skills) and (CFA= Deep and Specific Financial Skills). So the MBA lets me build on my finance expertise and gives me the choice to break into new areas: General Management, Consulting or go back in finance, albeit with a steeper career trajectory.

What are the pre-requisites to do the CFA exam?

For L1, you can start in the last year of your Bachelor’s program and once you finish your degree, you can sit for L2. You can sit for L3 the next year but note that the charter is awarded only after you have 4 years of approved work experience. Remember that L2 and L3 are only conducted once a year in June, so you cannot rush your way through the charter

So how did you prepare for it? Did you take any financial or economics courses?

I relied on CFA Institute provide books for L1 and studied in a study group with another friend of mine (who is now taking the IAS exam!). Having some company really helped as we were able to talk things over and clarify each other’s doubts. But this wasn’t so hard as I was still a student at IIT Bombay and used to being around books.

For L2 and L3, I studied alone, relying mostly on Schweiser guides. Once you start working, it gets so much harder to lock yourself up in a room and study. Managing a 12 hour/day working day does mean that you have to be very efficient in planning your time. My advice is to start early and keep a regular pace (both of which I did not do!).

What kind of edge are you expecting this certificate to give you in terms of financial security, jobs, salary along with the MBA?

Apart from finance sector jobs which value the CFA greatly, there are a number of synergies that are created by having both the CFA and the MBA. But I will talk about the two primary synergies here.

Firstly, it increases my recognition with all employers. The fact that I earned the CFA while working at full time jobs and cleared it on the 1 attempt every time tells them a lot about my diligence, analytical abilities, and time management skills.

Secondly, finance is an integral part of most jobs today, even in the Consulting and Corporate sectors. My CFA training gives them comfort that no matter what sort of finance problem at hand, I will be able to find a solution to it.

Long story short, not only does the CFA get me a seat at the MBA interview table, it also helps me perform better at my post MBA job.