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Career Directives

CFA-still-relevant During the past year, business education institutions have been dealt some severe blows. Perceived greed, lack of foresight, and general incompetency of many offending CEOs have been traced back to those hallowed halls that minted MBAs.

But business schools and MBAs are not the only source of business training around. Letters behind the names of bankers and investment professionals tell another story. For years, professional organizations have been churning out certified accountants (CA, CMA, CGA) as well as investment professionals. The most prominent and prestigious one has always been the Chartered Financial Analyst (CFA) designation.

This professional designation is known for the breadth of knowledge it offers, its highly challenging curriculum, as well as its strict code of ethics by which it binds its members. The predecessor to the current CFA institute was set up in 1947 to boost the credentials of finance professionals. Nowadays, it sets the gold standard among investment analysis designations.

The rise of banking, wealth management, and hedge fund industries during the last few decades have elevated and subsequently put a premium price on anybody with a CFA designation. In Bill McGinnis’ opinion, a CFA charter can be more important than an MBA degree. As the president of Exponential Careers and a CFA charterholder, he views the successful completion of the program as something highly regarded by employers. If someone has earned the CFA designation and has significant professional experience, many employers may even view a MBA unnecessary.

But with poor performance in the investment industry and massive stumbles of the banking industry, I wondered if a CFA designation’s reputation had been in any way tarnished. A large proportion of the curriculum focuses on derivative pricing, including the valuation of MBS and ABS. One way or another, the mishandling of those complex instruments contributed to the downfall of the banking system. So given the across-the-board failure of most investment advisory firms, rating agencies, hedge funds and wealth managers, are principles espoused by the CFA designation still relevant?

School

If I was eighteen, and clueless about what I wanted to do with my life, I would do business school all over again.

I’m not eighteen anymore, so I would not go back to business school.  Not when there are many other ways of learning out there.

1. I’m not fit to give you any business advice

A couple of months ago, a friend of mine headed back to school in a remote community in interior BC.  She wrote to me, excitedly about her new surroundings.  She was also excited about a business idea she’s had: the campus was set up miles away from the nearest town, so why not start a grocery delivery service for the hungry students?  I was the only person she knew with a business degree, so it found me.

I started to write back somewhat vague and non-committal, than I stopped typing, hit the ENTER key, and wrote the following: “The thing is, a business degree is probably the least helpful to someone that wants to start their business, because in business school, all we got trained on was how to service someone else.”

I wrote this to concede that I had little practical advice for her.

I was not wholly clueless when it comes to entrepreneurship – I did get my hands dirty on a business for a couple of years during university, and that has proven to be one of the biggest confidence-booster of my life.  But whatever skills I had gained during this time became neutered in a classroom setting.

School trained us to become task-masters, one that is great at driving efficiency, expediency, and a razor-sharp ability to prioritize.  We become extremely proficient at functional tasks, but terrible at matters involving creativity and imagination.  It takes a smart and able person to answer a question correctly, but a non-conformist to re-phrase the questions posed in the first place. In face of the current crisis, I think that kind of out-of-the-box inquisitiveness might have been helpful.

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