Monthly Archives: February 2011

Relevance of CFA Exam for Joining the Finance Industry

Hi folks,

I received some questions lately about the above topic from people pondering over whether to shoot for Level 2 exam in June 2011, and decided to write something quickly before it is too late for people to act.

This mailer is most relevant for people of profile A, defined as:

  • no finance background during school days+ not in finance industry+ aspire to join the finance industry someday+ consider doing CFA exam

Persons of Profile A could have just passed CFA Level 1 + in late 20s+ wonder if it is feasible to shoot immediately for upcoming Level 2 exam in June. That was exactly my profile and situation in Feb 2006. During that time, I managed to just scrape thru Dec 2005 exam, and was struggling within myself during Chinese New Year (also in late Jan/early Feb) whether to shoot for Level 2 in Jun 2006. I was concerned that time was not on my side, but after learning about CFA Prep Program at CFA Singapore and the use of Study Guides for more effective way of study, I made the decision to take the plunge. The fortunate thing is: I passed the Level 2 exam after few months of very consistent study and by some stroke of luck, I struck Jackpot in Aug 2006—I met the right person who brought me into the finance industry, to where I am today. I was just below 30yrs old when I did the career switch. 2006 was the year when I made a few key decisions that completely changed my life after that.

I anticipate the following possible questions on your mind and try to provide the facts to you clearly for your decision making.

Qn1 Why was it critical for me to shoot for Level 2 exam in June 2006 and not wait till June 2007?

Ans: Reasons include: (a) to keep up with the study momentum; (b) allow me to start looking for job after taking Level 2 exam (as many employers look upon Level 2 exam as a critical level to clear for people w/o any finance background); (c) I was also lucky to coincide with the window of hiring (for entry level ppl) from 2006-07.

Had I waited one more year, I would probably have started looking for job in Jun/ Jul 07, and we know the first cracks of subprime crisis actually started to surface in Jul/ Aug 07. Sep to Dec 07 marked the final leg of the last bull run, thereafter 2008 was a year of downward spiral starting with some job cuts as early as Mar/ Apr 2008 and the Lehman Brother collapse in Sep 2008 sparked the eventual outbreak of the financial crisis, where many people lost their jobs. In a nutshell, if I waited one more year back then, I might not have been successful in joining the finance industry, and worse still, I could have been the first few to be let go at any sign of a crisis—Last In First Out Principle.

 

Qn2 Is coinciding with the window of hiring that important? Or put another way, if you miss that previous cycle, can’t you wait for the next cycle?

Ans: Coinciding with the window of hiring is v important. Every few years, the floodgates of hiring open and there is a particular window of opportunity for entry level people, and is usually skewed towards the final stage of the hiring window… We also know that employers prefer to hire younger workers, which means it is easier to switch career when one is 27-32 rather than 34-39, makes sense? Should I have missed the previous cycle of hiring (when I was just below 30 in 2006), I am most likely too old to do any meaningful career switch now.

 

Qn3 What are the implications for me if I am of Profile A (see first para highlighted blue)?

Ans: I think the current window of opportunity opened some time in middle of 2010, which is why you read some success stories of my Equity Research Training Program (SpringBoard to Success – Part 1 and SpringBoard to Success – Part 2). This window of opportunity should continue into 2011, as I recently see many start-up brokers approaching me and hear that they don’t mind taking in people w/o any experience if they are of the right profile. I have just done referral for my favourite “student associates” to some of these start-up brokers and if they do well as interns, they will most likely join the finance industry successfully. It should be obvious to you that this window of opportunity will not be open indefinitely, and if 2006/ 2007 is any example to go by, this window of opportunity (for entry level ppl) should start to close into 2012 and maybe close completely by the time 2013 arrives. Please be aware that I am not a psyche, so the above dates are just my personal guesses, which can well be inaccurate.

The important implication is: persons of profile A need to pass Level 2 exam in June 2011 (upcoming exam) to stand a fighting chance of qualifying for this current window of opportunity.

This is more critical if the person of Profile A is in late 20s, as the next cycle would probably be in 2015/ 2016? By then, how old would you be?

In a nutshell, time and tide waits for no man, so ACT FAST to catch up with the leaping Rabbit!