The CFA Program Difference
Even before I graduated college in the Philippines, my mom kept repeating over and over that I should get an MBA (Master in Business Administration). Back then, my dream had always been to be an investment manager, and for a while I thought that getting an MBA would be the best path to achieve my goal.
When I moved to the US and after working for several years, I realized that I had many prior misconceptions about what it is like to live and work here. Among them was the misperception that an MBA would be the best program that would help me become a portfolio manager.
While an MBA from the right school is extremely valuable to be able to get a high-paying job in many industries, the CFA (Chartered Financial Analyst) program specializes in teaching someone how to become a better investor. Many people consider it to be “an MBA in investing”. The program helps open doors for someone in the investment world.
The CFA program is considered to be the most prestigious and difficult designation to obtain in the investment industry. One has to pass 3 grueling levels. I had to study really hard for about 3 years, so I could pass the exams. Thanks to forgoing many non-study-related activities, such as watching the NBA playoffs, I was able to pass the CFA program’s 3 challenging exams without failing. After 3 more years of relevant work experience in addition to my past work experiences, I finally obtained my charter in September 2010.
The CFA pass rates have varied over time, and have trended lower as the program continues to evolve. For my batch, the level 1 (2005) pass rates were around 35%, level 2 (2006) was 48% and level 3 (2007) was 50%.
Mathematically, only about 8.4% of those who attempted to pass level 1 in 2005 passed all 3 exams consecutively.
A former co-worker of mine who works for the Capital Group and has the CFA, CPA (Certified Public Accountant) and CFP (Certified Financial Professional) designations describes them by saying, “The CFA designation is about 10 times harder to get than the CFP designation and 4 times harder than the CPA designation.”
A UBS financial advisor, whom I just had lunch with recently, said, “I can’t remember anything from my CFP studies, but I use what I learned from the CFA program every day. The CFP program was super easy.” She also said, “An estate attorney who refers a lot of clients to me will only refer his clients to advisors who have the CFA designation.”
Over the years I have had many more conversations with various people who told me that they hold anyone who has gone through the program with high esteem because it is so difficult to achieve.
I am definitely proud that I have passed the CFA exams (and happy I can watch the NBA playoffs again). The CFA program has equipped me with the tools I need to analyze financial statements thoroughly and make sound investments for my clients and myself.
But the learning doesn’t stop with the CFA program. I have been on a continuous journey to fulfill my potential of becoming a great investor. I have found that reading books, real-world analysis of financial statements, speaking with other great investors, and self-reflection have allowed me to improve my investing skills further.
I achieved my initial goal of becoming an investment manager in 2014, but it doesn’t end there. I apply what I learned from the CFA program and everywhere else, so I can protect and grow my clients’ money. My new objective since then has been to strive towards becoming a better investor every day. In the decades ahead, I know I have achieved my ultimate goal if my clients say, “I’m glad I invested with WealthArch.”
Please let me know if you have any questions or comments.
CFA data source can be found here.
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Earl Yaokasin, CFA, is an investment manager who runs WealthArch Investment Services in Pasadena, CA. He is a fiduciary with over twenty years of experience, and whose entire personal portfolio is managed by the firm in the same investments as the company’s clients. His firm focuses on value investing, similar to Warren Buffet’s successful approach, and disciplined strategies designed to create growth with downside protection, enabling clients to move steadily towards their life goals and aspirations with confidence.