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The interest in pursuing the chartered financial analyst (CFA) qualification took a significant hit during the pandemic. Now, three years later, enrollment numbers for this rigorous investment knowledge test have yet to fully recover. However, with recent layoffs occurring in the investment banking sector worldwide, one may wonder if more professionals will turn to the CFA as a means to enhance their CV and career prospects.
However, this may not be the case, at least not in the United States.
Recent figures reveal that 71,069 candidates globally took one of the three qualifying exams for the CFA between January and May of this year. Although this is an increase compared to the 62,488 individuals who took the exams during the same period the previous year, it is still approximately one-third lower than the number from January to May 2021.
Becoming a CFA is notoriously demanding, requiring around 1,000 hours of dedicated study, and the average pass rate hovers around 44 percent.
In the past, obtaining a CFA certification was considered a guaranteed way to get ahead in the finance industry. However, nowadays, the qualification holds less sway when it comes to securing a job on Wall Street. Out of the 107,000 candidates who took the CFA exams last year, only a third were from the US.
Young professionals in the US are increasingly less interested in prioritizing their careers above all else. Study leave may also be less readily available. Furthermore, the field of active fund management, a stronghold for CFAs, is experiencing a decline.
Alternatives to the CFA abound, with the Master of Business Administration (MBA) being a popular albeit costly choice. Tuition for a full-time MBA program can exceed $240,000. In contrast, completing all three CFA exams costs just $4,000.
This explains the growing popularity of the CFA outside the US, particularly in Asia. China currently represents the largest market for the CFA, with India ranking third. The qualification offers global recognition to individuals who may have graduated from lesser-known universities and lack the resources to pursue an MBA.
This leaves the CFA Institute with a challenging asset allocation dilemma. Should they focus their efforts on developing markets or heavily invest in bolstering the prestigious US cohort? Undoubtedly, they possess the expertise to calculate the efficient frontier.
The Lex team is eager to hear your thoughts. Please share your opinion on the relevance of a CFA qualification in today’s world in the comments section below.
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