What are your thoughts and experiences w/Financial certs/degrees? (CFA/CFP/MBA/CPA)

b0mbrman

Lifer
Jun 1, 2001
29,471
1
81
I notice that there's a lot of questions asking about specific certs/degrees/fields but not one that's consolidated. I'll research the costs, time, and typical jobs but you can reply with pros and cons

Degrees

MBA
Description
*A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates gain a better understanding of general business management functions
*The MBA degree can have a specific focus such as accounting, finance or marketing.

Monetary cost
*Varies. The cost of tuition and fees will range from $20k for inexpensive state schools to over $80k for the most expensive private schools.

For full-time programs, the cost may approach $200k when you factor in foregone wages over two years

Time commitment
*11 to 16 months and full time. One-year full-time programs
*Two academic years and full time. Two-year full-time programs and some executive MBA programs
*Self-paced and part time. Most part-time programs and distance learning programs (2)

Typical jobs:
Financial Analyst, Budget Analyst, Treasury Analyst, Accounting Analyst (Potentially add a senior to manager to these based on particular experience)

Certifications and designations

CFA
Description
*Given by the CFA Institute as a standard for measuring competence and integrity in the fields of portfolio management and investment analysis. Key requirements are passing three self-study tests, working four years in the field, and adhering to a strict code of ethics.

Monetary cost
*First-time candidates must pay a registration fee and all tests require an enrollment fee. Using 2006's fee schedule, you would pay a minimum of $375 + 3x$360 for a total of $1455.
*Program curriculae (not required): $395 for level 1, $684 for level 2, $419 for level 3

Time commitment
*Four years experience at a job consisting of the following:
Evaluating or applying financial, economic, and/or statistical data as part of the investment decision-making process involving securities or similar investments, which include but are not limited to publicly traded and privately placed stocks, bonds, mortgages and their derivatives, commodity-based derivatives, mutual funds, other investment assets, such as real estate and commodities, if these other investment assets are held as part of diversified, securities-oriented investment portfolios.
Supervising directly or indirectly those who practice such activities
Teaching such activities
*Tests are administered only every six months and registration must be done well in advance, so plan on having the certification no earlier than 18 months after you start
*CFA Institute estimates that you will need to devote 10 - 15 hours per week for 18 weeks of study per exam (3)

Typical jobs
*Portfolio managers, traders, investment bankers, and investment analysts

Series 7
Monetary cost:
Time commitment:
Typical jobs:

Series 63
Monetary cost:
Time commitment:
Typical jobs:


CFP
Description
*A CFP acts as a financial planner for their clients. They deal with issues including Investments, Risk Management (includes insurance), Retirement Planning, Estate Planning (many tax issues). They are regulated by the SEC and are audited by them regularly

Monetary cost:
*$595.00 to sit for the exam

Time commitment:
*Currently requires 5 years work experience to sit for the exam, or completion of an education requirement. A Bachelor's Degree will be required starting next year

Typical jobs:
*Financial Planner

CPA
Description
A CPA is licensed by the state of his/her residence to provide auditing services to the public, although most CPA firms also offer accounting, tax, litigation support, and other financial advisory services. The requirements for receiving the CPA license varies from state to state, although the passage of the Uniform Certified Public Accountant examination is required by all states. This examination is designed and graded by the American Institute of Certified Public Accountants (7)

Monetary cost:
*Approximately $1,000 for the exam
*Education costs

Time commitment
*Varies by state
*Most states require 150 semester hours of college education
*State-specific accounting and business experience requirements--typically one to three years.
*After the education requirement is satisfied, a student can sit for the exam, but the CPA license will not be granted unless the experience requirement is met.

Typical jobs
*The most common career path for a CPA (and usually the most desirable) is in public accounting. There are four large firms with about ~100,000 employees worldwide, these are known as the "Big 4"
*Most people join an accounting firm in its audit or tax practices
*To be employed it is usually required to have met the CPA education requirements.

Salary
*Starting salaries for large firms range from $45,000 to $55,000, depending on region




Jobs

Financial Planner

Description
*Financial planners help individuals plan their financial futures
*This work can be personally and financially rewarding and requires excellent interpersonal skills
*A good financial planner understands investments, taxes, estate planning issues and knows how to listen
*Most planners go solo or work within smaller practices
*It's essential then that you have a certain amount of entrepreneurship given that you will be running your own business

Salary
*Median: $55,100
*Wide distribution
*90th percentile: Greater than $150,000 (6)

Financial Analyst

Description
*Gather financial information, analyze it, and make recommendations to their clients
*Assess the economic performance of companies and industries for firms and institutions with money to invest

Salary
*Median: $61,910
*Mid-50% range: $47,410 to $82,730

Personal Financial Advisor

Description
*Gather financial information, analyze it, and make recommendations to their clients
*Assess the financial needs of individuals, offering them a wide range of options

Salary
*Median: $62,700
*Mid-50% range: $41,860 to $108,280

Accountant/Auditor

Description
*Ensure that nation?s firms are run efficiently, public records kept accurately, and taxes paid properly and on time
*Service can include public, management, and government accounting, as well as internal auditing,

Salary
*Median: $50,770
*Mid-50% range: $39,890 to $66,900
*Varies by industry; largest industries follow paired with median salary
*Federal executive branch and United States Postal Service: $56,900
*Accounting, tax preparation, bookkeeping and payroll services: $53,870
*Management of companies and enterprises: $52,260
*Local government: $47,440
*State government: $43,400

Financial Manager

Description
*Oversee the preparation of financial reports, direct investment activities, and implement cash management strategies
*Increasingly, spend more time developing strategies and implementing the long-term goals

Salary
*Median: $81,880
*Mid-50% range: $59,490 to $112,320
*Varies by industry; largest industries follow paired with median salary
*Securities and commodity contracts intermediation and brokerage: $129,770
*Management of companies and enterprises: $97,730
*Nondepository credit intermediation: $88,870
*Local government: $67,260
*Depository credit intermediation: $64,530

Real Estate Brokers and Sellers

Description
*Help in buying and selling real estate
*Be familiar with local zoning and tax laws and know where to obtain financing
*Act as intermediaries in price negotiations between buyers and sellers.

Salary
*Median: $35,670
*Mid-50% range: $23,500 to $58,110 (5)




Outside references:
2 - mba.com
3 - cfainstitute.org
4 - cfp.net
5 - bls.gov/search/ooh.asp?ct=OOH
6 - careers-in-finance.com
7 - wikipedia.com
 

Descartes

Lifer
Oct 10, 1999
13,968
2
0
I can't share with respect to any of the certifications you mentioned, but I believe it's like everything else: If you're good, enjoy what you do, have the right experience, and know the right people you'll do very well.

Find out what you'd enjoy the most and do that. If you're good people and the money will follow.

I would think that the CPA or CFA would have the most immediate applicability, but I might be wrong.
 

JS80

Lifer
Oct 24, 2005
26,271
7
81
If you're an accountant you should get a cpa, if you're in finance, you should get a cfa, if you're in management, you should get an MBA, and if you're a Financial advisor you should get a CFP.

What exactly are you asking?
 

Svnla

Lifer
Nov 10, 2003
17,999
1,396
126
I have a MBA and here is my take:

I agree with Descartes about "If you're good, enjoy what you do, have the right experience, and know the right people you'll do very well". Just don't expect to make a ton of money just because you have a certification. Nothing is guarentee.

Ask yourself of what do you like to do, really like to do for the rest of your life? When I saw the post from CPA of how well he is doing, I thought about acct but I remember how much I didn't like acct classes in college, therefore, I changed to Business Management/IT then MBA.

I may go back to school and get some more finance classes and maybe CFA/CFP and open my own financial consultant/advisor firm.

Whatever you do, you have to refresh your skills by continue your education.
 

JS80

Lifer
Oct 24, 2005
26,271
7
81
Originally posted by: b0mbrman
Originally posted by: JS80
If you're an accountant you should get a cpa, if you're in finance, you should get a cfa, if you're in management, you should get an MBA, and if you're a Financial advisor you should get a CFP.

Well, what if I'm nothing related to finance right now?

CPA - you don't qualify (you need accounting courses and 150 semester hours of university credit)
MBA - only the top degrees are worth it, below top 15 (debatable) is pretty much not worth the tuition and opportunity cost
CFA - you need a financial sponsor
CFP - no clue
 

petejk

Senior member
Apr 6, 2002
463
0
0
I'm going for my MBA (hopefully next Spring). I'm a Programmer essentially, but managed a dev team at my last job. I'm looking to set myself apart from everyone else in my group in more than one ways.

Also, I plan on going to a Cal State school, so the education cost will be a lot more inexpensive. I see a lot of value in an MBA. Personally and professionaly.
 

b0mbrman

Lifer
Jun 1, 2001
29,471
1
81
Hmmm...makes sense....so what is the reason that people tell you that an MBA away from the top tier schools isn't worth it?
 

WildHorse

Diamond Member
Jun 29, 2003
5,023
0
0
Originally posted by: b0mbrman
Hmmm...makes sense....so what is the reason that people tell you that an MBA away from the top tier schools isn't worth it?

for one, the lower programs are more like high school & college, where they "cover the material."

Elite programs are more like PH.D. where students work very closely with professors on evaluating unpublished papers the professor is peer-reviewing for journals, and on research for such papers the professor is authoring, and in face-to-face meetings, and working on real-world consulting engagements at CEO level of major corporations.

Another: the quality isn't there. My MBA took 4 years, 25 grueling, very rigorous courses, 100 units (quarter system), 706 mean GMAT score.

Contrast to your OP quote: "MBA 11 to 16 months and full time. One-year full-time programs" I've even heard of programs that slap a degree on people after maybe only 30 units or so. Joke to call the "degree" by the same name.

Courses in elite programs are largely taught by the premier scholars in their fields, the ones doing the primary research, developing new concepts, publishing field-shaking papers, authoring textbooks that become enduring standards in their fields, giving major lectures internationally, doing very serious consulting to companies and governments worldwide, etc. True intelligentsia.

Away from the top tier schools, courses are taught by a sub tier of good people who learn from the top tier. Lots of them are not Ph.D.s, and if so, not earned at top universities. They mostly only publish to not perish, not serious heavyweight scholars.

Elite programs admit only the top students internationally, after fierce competition, while lesser ones admit just about anybody who'll pay their fees. A typical student at a low level program does not go through the trials by fire of a rigorous top program.

The type of person who graduates a top program is more likely to attain an executive career, dealing with issues about the whole enterprise. The person from a pedestrian program, maybe track to manager or specialized contributor, dealing with a project or functional area.

So there are a couple of things to respond to your question.
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
MBA: Good, especially if you get into a top institution
MSF: Good, go to UIC, or Yale, or Northwestern
CFA: Hardcore. Although if you aren't going to be in the capital markets, it's a waste of time.

I have my MBA (graduated 3 years ago) and am a level 3 CFA candidate. I passed level 1 and 2 on the first try and hoping for a repeat performance in 3 weeks.

The CFA is *MUCH* more gruelling than a CPA, which allows you to take each level separately if you fail it. It is much harder than the CFP, since the CFP is one-shot.

The CFA requires you to read a lot, solve many problems, and take many practice exams. It isn't for people who are casual finance people and requires 6 months of good prep work prior to the exam. I studied ~500 hr for Level1, ~550 for lvl2, and I am about at 400 right now for lvl3.

What you learn in the CFA

level1: Broad based economics, ethics, quantitative methods (statistics such as linear regression, t-tests..etc), accounting, financial statement analysis, derivatives, fixed income, and portfolio management.

level2: ethics, less quantitiative (multi-variable regression), more FSA (M&A accounting), financial statements, more fixed income, more derivatives, and more portfolio management

level3: ethics, very little quant, no accounting, no financial statement, fixed-income portfolio and hedging, massive portfolio derivatives, massive wealth management, and alternative portfolio investments. ~60% of the exam is portfolio related.

The exams are two three hour sessions that fly by like they are 20 minutes.

If you fail, you fail. You get no specific retakes, you start at the level again. I have known people who have failed lvl2 4 times and keep trying, why, I don't know.


If you want to learn about the CFA, go to www.analystforum.com.


An MBA is the foot in the door for i-bankers and such. I am not an i-banker, but more of a corporate capital markets i-banker. I am hoping to make the transition over to the i-banks within the next 4 years.

If you plan on doing M&A, or anything non-equity/debt portfolio related you will not get a huge amount of credit for the CFA, other than the "been there, done that, earned the designation"

People say an MBA is a waste of time if it isn't from a top 20, that's a lie if you don't have a solid finance background (I didn't, psychology). After my MBA, my first job sucked (40's) and my next job doubled my salary after 50% of raises from the first job. I expect my salary to keep going up, albiet not quite as fast.

I might even go back and get a better MBA, something from Duke or Georgetown. I'll have to see. I have toyed around with a JD also, going into securities law. We pay our lawyers so dang much money...


As far as the post above. I'll probably attain an executive position within the next 10 years despite not going to a top flight "elite" school. Brains matter too, as does drive. I have gone from a jr. analyst to a securitization strategy manager in about three years. Just because you don't go to an "elite" school doesn't mean you won't attain company-wide positions.

I have done presentations for the board of directors to decide capital funding mixes of a fortune 100 company, and the analysis to go along with it.
 

WildHorse

Diamond Member
Jun 29, 2003
5,023
0
0

Here's a junk e-mail I got today:

MBA diplomas!
Contact us NOW to receive your diploma within days, and start improving your life!

Bachelors, Masters, MBA and/or Doctorate (PhD)

NO ONE is turned down.
Call Now 7 days a week.

1-206-xxx-xxxx
 

b0mbrman

Lifer
Jun 1, 2001
29,471
1
81
Yeah, well...that's not what I mean

[Edit] Or maybe I can make a special section under MBA for those. MBA is turning out to be the hardest to research because there are so man variables
 

puffff

Platinum Member
Jun 25, 2004
2,374
0
0
A couple more 'certs' to look at: Series 7 and Series 63 from the NASD. Having those can be a big help to getting your foot in the door at a Wall St firm. The catch is you usually need to have one of those firms sponsor you to even take the exams.
 

b0mbrman

Lifer
Jun 1, 2001
29,471
1
81
Originally posted by: puffff
A couple more 'certs' to look at: Series 7 and Series 63 from the NASD. Having those can be a big help to getting your foot in the door at a Wall St firm. The catch is you usually need to have one of those firms sponsor you to even take the exams.

Cool. Will check it out...maybe start w/Google or something.

Before I look deeper into them, as far as you know, are they supplemental to other certs or can they stand on their own?
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
The S7 and S63 probably won't help you too much unless you have experience. As already mentioned, you need a sponsor to take it.

Most places will let you take it after you have been hired. Pass rate is something like 75%. If you get a 80%, you have studied 5% too hard, or apprarently the joke goes.

If you have good finance experience or knowledge it isn't hard.
 

everman

Lifer
Nov 5, 2002
11,288
1
0
CFP - Certified Financial Planner

Official Website

What do they do? A CFP acts as a financial planner for their clients. They deal with issues including Investments, Risk Management (includes insurance), Retirement Planning, Estate Planning (many tax issues).

They are regulated by the SEC and are audited by them regularly.


Currently requires 5 years work experience to sit for the exam, or completion of an education requirement. A Bachelor's Degree will be required starting next year.

Cost: $595.00 to sit for the exam. Large time investment, plus degree required starting next year.

Typical Job: Financial Planner. Can be independent or work for a firm. You work with attorneys, CFPs, others. But you are the global coordinator of everything.

Some are more like money managers, others aren't.

Cons: Very difficult job. You "will" end up having clients need to sign things on their death bed. Dealing with families that hate each other, divorces, etc. Dealing with people who don't have money for (insert anything here). Not easy.

Need licenses like Series 7, Series 63, etc.

Pros: High median income. $1,000,000 gross income is very possible (not a dream). Fun if you like it. (these numbers are based on independent planners)
 
B

Blackjack2000

My first advice is to stay away from Series 63, Series 7, and CFP designations. They are for financial salespeople. Unless cold calling and constant prospecting are what you want to do for the first 3 - 4 years, forget it. (Failure rate is also quite high, something like 80%-90%)

My more important advice is to find what you are passionate about in the financial world.

Living close to NYC, I was fascinated by the Stock Exchange and how finance drove the economy. I focused on it while earning my undergaduate (business) degree. I constantly read the WSJ, gave financial advice to friends, and talked about the markets to anyone who would listen.

When I finished school, I got a job first as a financial planner (hated it, the whole job was prospecting family and friends), and now as a hedge fund accountant. Over the last year and a half, I learned something very strange.

Finance is simple. You have your basic, stock and bond, their derivatives (options, swaps, swaptions, rights, warrents, PIPEs), and some slightly more obscure variations (i.e. commercial papers is functionally the same as a zero cupon bond, which is just a type of bond).

Yes, there are quite a few insturments, but once you learn them, they stay fairly static.

I have a more practical interest in finance though. How much should you invest? How should you invest? How much should you spend on a car? What's the most cost-effective way to own a car (even a BMW)? Who should buy a house? Who should rent? How does the housing market effect the economy? Will the dollar start to fall against other currencies soon? Is that good? Is that bad?

What I found that I was more interested in was economics. The finances are just the math behind it all.

I now read the economist cover to cover every month. I am planning on going for an MBA in finance, and I don't care how presigious it is, as long as the content is good.

My advice is to get an entry level job somewhere in the financial industry, and see where your passion is.
 

b0mbrman

Lifer
Jun 1, 2001
29,471
1
81
Originally posted by: Blackjack2000
What I found that I was more interested in was economics. The finances are just the math behind it all.

So, where could a love for pure economics take you (or me)?
 

vegetation

Diamond Member
Feb 21, 2001
4,270
2
0
Originally posted by: b0mbrman
Hmmm...makes sense....so what is the reason that people tell you that an MBA away from the top tier schools isn't worth it?

That's because traditionally one who gets an MBA automatically figures they are going to get a six figure salary right off the bat. That's simply not true anymore. Not even for a top tier school, unless you have a lot of other credentials or experience under your wing. Freshly minted MBAs shouldn't expect any kind of major salary increase. It CAN open doors to new opportunities, but like I said, it seriously matters on your other skills.

I would strongly suggest anyone considering an MBA to take a part-time program. Don't quit your job. Your opportunity cost is essentially zilch, since if you take an evening program you're sacrificing what, watching some TV and neffing online?