Usefulness of CFA in Managment Consulting

As you may see in the 13th Survey I just started on the blog, people are thinking that Management Consulting would be a next "place to be" after the crisis. I thought that it would be interesting to analyze how different financial credentials are applicable to management consulting job.

CFA - This credential is very well rounded. When you study for CFA you need to learn not only about the basics of financial mathematics, but you learn in depth about companies balance sheets and accounting in general. You learn about ethics, about rules of proper conduct etc. This knowledge and especially the breath of this knowledge may be a good preparation for the career in Managment Consultancy. In fact I know number of people, who got their charter and joined top consultancies (McKinsey, Bain, BCG). From what I hear, it seems that the knowledge they got from CFA is much more valuable than what they learned in their Masters degree for example.

FRM - Some of my friends with FRM work in Consultancies (like KPMG, Ernst) in risk departments. In fact these departments grew significantly in recent years and there is really quite a lot of hiring in these space.

CAIA - This certificate is very focused on alternative asset managment, and I haven't heard of anyone, who had it and worked in consultancy space.

PhD - There is some demand for PhD from Consulting Firms (mostly McKinsey), but from my observation PhD in Finance or Economics are not really prefared. It seems they like more PhD in "soft" sciences like PhD in Public Policy, PhD in Medicine etc. Companies like McKinsey attract PhDs to inject some non-standard thinking into the firm. However, PhD in Finance or Economics think very alike MBA students and CFAs, so they don't add much.

MBA - MBA has been the most standard way of getting into Managment Consulting. Companies like Bain or Booz Allen Hamilton recruit most of their employees from MBA students at the best universities. Some companies (like McKinsey) put so much emphasis on MBA business education that they tend to send majority of their non-MBA employees to MBA courses at Top Business School around the world.

Summing up, considering the costs of the degree CFA can be an interesting alternative to MBA for everyone interested in managment consultancy jobs.

Good luck to CFA delegates!

The date of CFA exam is approaching very fast. Although I am not taking my level III this year (because of my commitments at the university) I feel the excitement of the moment. At my university half of the library is filled with just people, who are reading CFA textbooks. Some of them use Schwesers, others are studying directly from CFA Textbooks (which is good thing, but maybe not really just before the exam as the CFA Textbooks are really heavy-weight).
This CFA exam is administrated at important time for the financial industry. It is soon to be decided if the finance industry recovers from ashes and would provide attractive employment opportunities not only for CFA Charterholders. Even if you expect the financial world to look bleaker now than some years ago, do not lose the fighting spirit before your CFA exam. Yes, there are less jobs, yes, salaries are lower, but still with CFA designation you will be able to find a job which would be better than average.
As you could see from the survey which was published yesterday CFA is expected to be the most desirable credential in the new finance world. I expect this is because of two important characteristics of CFA. First it provides really rigorous knowledge. The crisis was caused in fact by PhDs, who knew stochastic calculus, market microstructure theory, but they had real problem with taking the holistic view of the world. CFA with its broad curriculum, provides you with everything what is important to have a global overview of the situation. Second, I belive there is no other designation that puts so much emphasis on ethics and good standards and in fact lack of regulations and ethics is a root of the recent crisis.

All candidates, good luck!

Results of 13th Survey