Why Canadians get an MBA AND the CFA

tl;dr: Canadians have a special reason to do the CFA. And this is why you should or shouldn't do it.

I know people often debate the pros and cons of an MBA vs. the CFA. As Toronto is the CFA capital of the world, I thought I'd answer this questions from a more uniquely Canadian perspective. Incoming/current students would often ask about the value of a CFA in recruiting. Having participated in both sides (as recruiter and candidate), I have some thoughts on what I've seen.

Why CFA?

It's a simple question. Toronto has the title of most CFAs per capita in the world. But I think there is a unique answer for Canadians. The unfortunate truth of the matter is that outside of Canada, even our top schools (ugrad or MBA) are non-target. Period. Ivey (disclosure: did not attend) seems to have one of the better batting averages for US hires, but is still far short of US schools.

Quick side recap: Canadian schools don't have the same "infrastructure" as our US counter parts: less alumni, further geographically, not as strong established relationships with firms in the US, firms have recruiting budgets to fly and accommodate interviewers at target schools, target schools are generally larger and have bigger candidate pools, don't have to worry about visas etc.

The number one reason for going to a Canadian school is that you plan to immigrate into (or stay in) Canada. Period. I think at our school, some absurdly high percent (90%+) of graduates stayed in our city. Most people who left the city returned to their home geographies (in Canada or abroad).

The unfortunate truth (or at least perception) is that Canadian Schools don't share the same reputation as their US counter parts. If you went to a top Canadian program, you will often also carry the Canadian inferiority complex that you will want to be recognized with a global credential. This is where the CFA comes in. If you can achieve this internationally recognized charter (or at the very least, show achievement by passing some level of CFA examinations), you can demonstrate you are high-caliber (although the CFA standards has very precise language for what this is technically supposed to mean, we all get the point).

Do I need a CFA?

I've noticed higher success rates for candidates who have completed some level of the CFA exams. In my MBA year, I think there was only one candidate who got into one of the large six (including NBF) Canadian banks who didn't at least pass the CFA level I exam.

"Do I have to have a CFA to compete in Toronto?" The answer is not really. At least in Toronto, the recruiters weren't picking out resumes that contained the words "CFA". However, as the CFA is a very vigorous program, what I noticed was that the candidates that made it further into the interviews (say second round) had a much stronger command of the materials/technicals if they had passed some level of the CFA exam.

Because they suggest ~300h of studying, that is just another form of preparation for someone from a non-finance background.

How about the CSC?

Another credential people look at is the Canadian Securities Course (CSC). Often touted as Canada's "Series 7", the CSC can be taken by an individual (doesn't need to be sponsored by a member firm, SRO, or an exchange, unlike the S7) after paying a fee (usually between $1k to $1.5k). This certification is much "lighter" than the CFA. You can write the exams at almost anytime (exams are done in test centers electronically) and can be booked within two weeks of enrollment. While there are a few technical questions, the focus is heavy on regulatory standards and reporting institutions. Also, this is not a globally recognized standard so it doesn't help in that regard. To be completely honest, this certification feels like it would be more appropriate for Canadian PWM.

You can check out the CSC curriculum (and topic weightings) here:
https://www.csi.ca/student/en_ca/courses/csi/csc_…

And compare the CFA curriculum here:
https://www.cfainstitute.org/programs/cfaprogram/…

Personally, I did this. Found it not to be incredibly helpful. Used as resume fodder to have "financy" things on my resume, but eventually dropped it pretty quick. Was not very impactful.

Practical Advice for Canadians

So to the punchline, should you write the CFA exam? It depends. A few things to consider:

  • Are you an ugrad? The minimum requirements are a bachelor's (or equivalent) degree or be in the final year of your bachelor's degree program. Typically, I've often seen analysts in Toronto study for this in their second year. Good prep for buyside recruiting. Or write Level I in your final year if your are crushing it at school (have return offer, comfortable grade margin etc.)

  • Are you a relatively fresh grad, further in your (non-finance) career looking to make a switch? CFA looks great on paper, but remember, except for a few CFA networking events, it doesn't share the same massive recruiting engine that MBA programs benefit from. Might be good pre-MBA prep if that is what you are looking to get into (this is the path I took). If you are looking for this to be your ticket out, proceed with caution.

  • Are you a first year MBA student looking to write in December? I would highly recommend NOT writing in December. The first half of the first MBA year is the hardest (not just in the program, but maybe your life). You have to network your ass off and maintain stellar grades (unlike some US non-grade disclosure schools your grades matter).

These are the most common people/profiles asking me about the CFA. If your situation is different, comment below and I'll do my best to answer.

"CFA Level I Candidate"

Because there are so many of us in Toronto, I feel like I should offer this last piece of advice:

Please don't put this down. It's my personal pet peeve. It basically means that you paid the fee, but technically you haven't even achieved one level yet (haven't passed the first exam). While some people like to say that it "indicates interest" (especially for people with a non-finance background looking to go buyside or research) my strong personal preference is to leave it out.

And for god sake, please conform your reporting to the standards set out in the Ethics portion of the materials. Forget attention to detail, if you get it wrong it says that you haven't even bothered to read the materials yet.

 

Informative post, thanks. I really do not understand the question from an American perspective, though. Sure, the CFA shows that you have the work ethic required to get the certification, but the CFA is a certification, while the MBA is a degree. It's like comparing apples an orange- like asking if you should get a Ford F150 or a Honda Accord.

 

The other general observation about the CFA in Canada is that it's a lot more of a 'generalist' qualification than it is in the US. You'll see charterholders in investment banking, private equity, Asset Management, hedge funds, venture capital, mezz lending, corporate and commercial banking, real estate finance, etc.

"The power of accurate observation is commonly called cynicism by those who have not got it." - George Bernard Shaw
 

This isn't just a Canadian thing. I've worked with multiple people who have top 10 MBAs and the CFA. I think that people in jobs like investment research, portfolio management, etc. are likely to have the CFA regardless of whether they have an MBA.

"There's nothing you can do if you're too scared to try." - Nickel Creek
 
Best Response

So that's the issue, If you're going to do banking or PE, there's no real benefit to the CFA, even if a non negligible % of professionals in those industries in Canada have it. When I was in banking, my bank had a policy of not supporting analysts getting the CFA (some groups actually actively prevented their analysts from doing it), yet around half of the bankers in my group had the designation (or were working toward it). And the weird thing is, there was a general consensus that it was more or less useless and didn't bring any real benefit for an career in IB. I sat for level 1 during senior year and when I mentioned shortly after starting that I was about to sign up for level 2, the head of my group (who was a CFA) told me that people do the CFA to get the job I have so why bother. I never signed up for level 2 and really glad I didn't, banking hours are already over the top, having to study for the CFA on top of all the silliness would have brought me over the edge for sure. After banking, I made the move to a PE shop, got my MBA and am now at another PE shop and the topic has literally never been brought up and I'm 99.9999% sure not having the CFA has never held me back.

TL;DR: don't bother with it, not worth it.

 

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