Grad School Series: CFA
CFA stands for Chartered Financial Analyst, a certification regulated by the CFA Institute. CFA charter holders are trained to become experts in the field of investment management and are offered jobs in various profiles that primarily include portfolio manager, research analyst and investment banker. One must have a bachelor’s (or equivalent) degree or must be in the final year of bachelor’s degree and have a minimum work experience of 4 years to be able to apply for CFA program.
FRM stands for Financial Risk Manager, a professional designation issued by Global Association of Risk Professionals (GARP). FRMs possess specialized knowledge in assessing risk and typically work for major banks, corporations, and asset management firms. To apply for the FRM exam, there are no educational or professional prerequisites but a full-time relevant work experience of 2 years is required.
CFA is considered a gold standard for finance and puts some serious weight behind your name. It is applied finance and the knowledge is easily transferable from book to work. If it aligns with your goals, it’s definitely worth it.
The Scholars’ Avenue caught up with Namita Mittal who graduated from IIT Kharagpur in 2016 with an Integrated MSc in Chemistry. Presently, she works as a Senior Associate at HSBC. She cleared all three levels of CFA and has a deep interest in financial markets and machine learning.
When did you decide that you wanted to become a CFA?
I decided to prepare for CFA during my CDC internship season. Back then, due to my internship, I could not devote sufficient time to prepare, and also, placements kept me occupied during the first half of my final year, so I appeared for Level 1 at the end of my final year, that is, in June.
How did preparing for CFA give you an edge over the other students preparing for the finance profile for CDC?
Most importantly, it catches the recruiter’s attention. If one doesn’t have a background in financial engineering or any majors in finance, then the only thing a company looks for is CFA or FRM. This is mainly because it shows your interest and dedication towards this field.
Moreover, it proves to be advantageous as the interviewer would ask you questions related to subjects of the CFA program that you are sure to know of rather than some puzzles or probability related questions. Ultimately, it increases your probability of securing an offer.
How did you decide between CFA and FRM?
Initially, I was a bit unclear while deciding between FRM and CFA, but since I was more inclined towards portfolio management, I chose to appear for CFA.
FRM is a very specific domain of risk management while CFA covers a wider variety of subjects. Having worked in risk management, I am of the opinion that FRM’s syllabus is more quant related and not much needed. I would suggest going for CFA in case you’re unclear about which area of Finance to choose. However, if you’ve decided that you want a career in risk management, going for FRM would be a better option.
Can you describe your journey preparing for all three levels of CFA?
I appeared for Level 1 at the end of my fifth year and spent 15–20 days preparing from Schweser notes. Opting for electives from Vinod Gupta School of Management, IIT Kharagpur had really helped me gain a fundamental understanding of finance.
Level 2 demands a detailed and theoretical comprehension of the topics. You need to devote much more time and effort to Level 2 as compared to Level 1 also one needs to go thoroughly through the Schweser books. A few topics do require mugging up.
Level 3 is mostly subjective and focuses more on portfolio management, and since we were not in the mindset of writing subjective papers after JEE, one must practice writing the mock question answers regularly. Level 3 is not just about Schweser notes, you have to thoroughly go through the books as well. This level eventually decides whether you really want to become a portfolio-manager or not. Two weeks before the exam, I devoted my time entirely to solving mock papers and previous year’s papers of CFA.
How did you manage your preparation along with your work?
Along with a job, one does not get sufficient time for preparation. During weekdays, it isn’t possible to spend more than an hour or two, so I used to take pictures of 10–20 pages from Schweser books and go through them while traveling or while having lunch. It felt like I was reading a newspaper, not like preparing for an exam. Working in the same domain only makes reading even more worthwhile! On weekends, I devoted nearly 4–5 hours. Two months were enough for preparing in this manner for Level 2. Towards the end, I took leave for a couple of weeks and studied all my notes thoroughly, and solved a good number of question papers. For level 3, I followed a similar pattern of studying, and it took me nearly 5–6 months of preparation to clear the exam.
Since giving the CFA exam is quite expensive, especially for Indian students, what all scholarships can one avail to finance the same?
Yes, of course. A program called the Access Scholarship Programme has been designed for students who may not be able to afford full fees. You can apply for it and even if you’re not selected for the scholarship, you will be paying a discounted price.
Can you comment on the kind of work experience required to get the charter? Is it necessarily supposed to be in the field of finance?
Yes. The work experience should be in a field related to finance.
TSA is very grateful to Ms. Namita Mittal for talking to us!
