When Anushka Agarwal moved from India to Singapore for a masters in finance (MiF), she canvassed advice from people in the know on how to succeed in the finance sector. Everyone issued the same guidance: earn the coveted Chartered Financial Analyst qualification by finishing the CFA programme for investment professionals.
This involves completing three stages of arduous exams, 900 hours of study and 4,000 hours of relevant work experience. Ms Agarwal, who completed Level 1 in December last year and wants the full qualification, believes the effort will be worth it. “Those three letters give you an edge over other graduates on the job market,” she says.
Ms Agarwal wants to work in asset management or corporate finance. In 2019, she enrolled on the MSc in applied finance at Singapore Management University’s Lee Kong Chian School of Business — partly to get a head start on the toughest tests in finance. The 10-year average pass rate for the CFA exams is 44 per cent.
“CFA is the global benchmark for investment professionals,” says Soon Huat Chan, the director of SMU’s course. More than 90 per cent of each cohort attempt the first stage in December. The MSc was designed to align with the complex CFA curriculum covering investment, financial reporting, economics and more.
The CFA Institute, the investment professionals’ association that administers CFA exams, launched its global University Affiliation Programme in 2006 to meet a growing demand for its qualification from younger financiers and to raise standards of professionalism.
The programme today comprises 630 universities that embed at least 70 per cent of the Level 1 exam into their degree programmes. Gary Baker, managing director of Europe, Middle East and Africa at the CFA Institute, says affiliation helps schools keep pace with industry changes and satisfy employer demand for new skills.
“CFA is not just an academic qualification; it’s heavily wedded to practitioners, who give us their input on what skills they want candidates to have coming into the workforce,” Mr Baker says. “The curriculum captures the new market forces, whether fintech or ESG.”
Some schools remain unpersuaded. In the US, MIT Sloan School of Management turned down such a partnership so as to maintain complete control of its curriculum. “The CFA Institute approached us several times, but I don’t know what strings come attached,” says Heidi Pickett, assistant dean for Sloan’s programme. “We are not just training asset managers.”
And the CFA is only one of many financial certifications. MiF courses can help students acquire a variety of acronyms to boost their employability. Those who obtain the finance MSc from Cass Business School in London, for example, can then skip modules in exams to become chartered accountants through the Association of Chartered Certified Accountants and the Chartered Institute of Management Accountants.
“The trend is accelerating,” says Nick Motson, Cass’s associate dean for MSc programmes, of industry designations. “Schools know people are attracted to finance degrees for the quality stamps. One of the most-asked questions from prospective finance students is whether we incorporate CFA in the MSc: we do.”
At Ohio State University’s Fisher College of Business, nearly half the MiF cohort want to work in investment management, especially with alternative assets such as hedge funds, private equity and property. In 2018, Fisher teamed up with the Chartered Alternative Investment Analyst Association. The deal means students can apply for scholarships to sit the Level I CAIA exam, the first step towards earning a CAIA charter.
“Industry certification is not something that distinguishes a business school: nowadays it’s a must-have,” says George Pinteris, director of Fisher’s MiF. “This is really where the added value comes for our students.”
Julia Knobbe, director of the MiF at Frankfurt School of Finance and Management, says industry certifications help students win jobs in niche areas of global finance. Frankfurt’s course, which is accredited by the Global Association of Risk Professionals, covers some of the exam content for the Financial Risk Manager credential.
Yet Prof Knobbe insists that industry exams are no substitute for an MiF. They are mostly self-studied, whereas a degree goes deeper into some subjects and includes group work, faculty expertise and career support, plus opportunities to try theory out in the real world.
For instance, SMU’s Prof Chan teaches an equity analysis course in which students value companies using real-time data and present their research report to the class. “We are not a prep school for CFA certification,” he says.
Marwa Hammam, executive director of the MiF at Cambridge Judge Business School, adds that students with work experience — a requirement for her course — learn as much from each other as they do from professors. About a quarter of her students had completed at least CFA Level 1 when they enrolled.
At UNSW Business School in Sydney, students with the full CFA qualification can skip one module in the MiF programme. Associate professor Kingsley Fong, says CFA makes prospective students more attractive, as it suggests they can succeed in the classroom and in financial markets. “CFA is the gold standard of the investment profession,” he says. “Paired with a masters in finance, it’s a powerful combination.”
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