Do CFA Holders Outperform the Rest?

Feb 4, 2010

Jon Jacobs

When considering whether to pursue a credential such as a Chartered Financial Analyst (CFA) designation, the next question likely to come to mind after "Will it upgrade my job prospects or compensation?" is, "Will what I learn improve my job performance?" A review of published research "reveals a patchwork of studies that don't uniformly and unequivocally show outperformance by charterholders," writes Christopher Wright in the January-February issue of CFA Magazine, published by the CFA Institute. However, "The studies finding that the charter produces demonstrably superior job performance so far outnumber the ones that don¶t. This may be a preponderance of the evidence but not clear and convincing evidence or proof beyond a reasonable doubt." The question is more provocative than you might think. For one thing, the CFA Institute's own ethics rules specifically prohibit members from making statements such as, "CFA charterholders achieve better performance results," or "As a CFA charterholder, I am the most qualified to manage client investments." However, the institute is updating its Standards of Practice Handbook and expects to publish a revised version later this year. One reason conclusions on performance differ is that researchers didn't necessarily examine similar data sets or use similar performance criteria. Studies focused on different fund types, time periods and countries, and varied in how they defined return, risk and other key measures. The Numbers, and More Out of 14 published research studies summarized in the article, nine concluded CFA holders outperformed their peers in terms of returns, volatility, tracking error, or earnings estimates and three concluded CFA status is unrelated or negatively related to performance. (Three of those studies also found MBA degree holders outperform managers without MBAs, while three others found MBA holders underperform.) But it's not as simple as toting up numbers, the article notes. For instance, association isn't causation: if people who hold one or another credential were smarter than their peers to start with, then you shouldn't expect to become a better investor or trader if you go on to acqire that credential. Aron Gottesman, a Pace University finance professor and co-author of a 2006 study that found mutual funds managed by CFA holders don't outperform but those managed by graduates of top MBA schools do, told CFA Magazine he nonetheless views the CFA charter as "very useful for obtaining a career in finance." TheUniversity of Toronto's Gus De Franco, who co-authored a study published last year that found CFA-holding sell-side equity analysts are ahead of the pack in their earnings forecasts, said employers see the designation as a signal of knowledge and commitment. And that, he said, is "very important for younger, less experienced professionals who want to enter or have just entered the investment community.

Tailoring Your Resume Isn't 'Cheating'
Jul 1, 2009

Jon Jacobs

Do you ever feel pigeonholed when you're looking for a job? Make sure you're not pigeonholing yourself. Some job-seekers paint their skills and experiences in identical language whenever they send out a resume or go to an interview. But talk to a career specialist, and they'll tell you candidates who don't modify their presentation to fit a specific employer's needs are shooting themselves in the foot. "You should never lie, but you absolutely must re-position yourself. You have to say, 'What would be of most interest to this employer?'" says Kate Wendleton, president of the Five O'Clock Club, a nationwide career counseling network. "You don't have to say everything you've done" in past jobs, Wendleton explains. "You just have to say those things that are most important to your target market."

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Career changers or recent graduates with little experience may feel it's dishonest to play up those parts of their background that relate to the role they seek. Commenting on our story Cover Letters: Not Extinct, Just Evolved, one eFC user wrote: "How do you tailor yourself to the needs of the employers if you have never done what they are looking for? That, I think, falls within the category of cheating." Yes, misstating facts is unethical. But candidates still have ample scope to decide how to present themselves, and which features of their work history and personality to put forward. For instance, it's perfectly legitimate to rephrase past job titles, as long as your wording reflects either the actual function you performed or your level of responsibility. It's also legitimate to modify job descriptions, moving to the top those achievements or activities that relate most closely to the specific role you're applying for. Flexibility is Healthy

There is nothing unethical about looking at your background fluidly«. says Jay Gaines. since sugar is a bulk food.Segment Director. Most people have the ability to perform more than one type of role. The summary began." Wendleton also says. she played up her one year of experience training people to use computers. you're making it easier" for employers to see you in the proper light. fixed ideas about their careers. in order to spotlight his sports background. another club member had worked entirely in international divisions.. information technology and manufacturing. they were put off by seeing "mortgages" near the top of his resume. When making her move. He's seen people move from information technology to sales on the strength of how well they managed internal relationships. Originally published Sept. there were no job openings in international within his target industry.which was accurate. The problem disappeared after she changed her resume's mentions of "sugar" to "bulk foods" ." His last job title changed from "VP . you want to see if you can maybe find your sweet spot. Wendleton rattles off successful transitions by Five O'Clock Club members. So he purged his resume of the word "international. That way. chief executive of Jay Gaines & Co. For example." The initial line of its new description read." Still another member found her extensive background in sugar sales came off as too narrow when she sought positions with bulk foods businesses. Especially if a candidate has limited experience.Business Director. . "Most people don't have deep." Get Out of Your Pigeonhole "De-emphasize the specialty area. Adopt Your Target's Terminology Among the lessons she draws: "You have to use the jargon of your target market. and emphasize the accomplishments. One club member wanted to return to sports marketing. Gaines says a back-office professional may demonstrate exceptional interpersonal skills suitable for client-facing roles. Shelter Business" to "VP . 5. 2007. "Ran a $4." For example. and de-emphasized the technical side of her background. you want to explore. and re-word his most recent job title and description to emphasize his marketing skills and remove references to mortgages. where he had a 15-year career before spending five years at a mortgage unit ofCitibank. including her own switch from technology specialist to counselor.Being flexible about how you view yourself and present your qualifications is natural and healthy. "Fifteen years in the leisure / sporting goods industry. Wendleton says." Gaines says. At the time of his search. The solution was to place a "summary" section right below his name and address. Do you tailor your resumes and cover letters for each prospective employer? Share your advice by posting a comment below. an executive search firm focused on senior roles in finance. A background in product development or marketing also can be a bridge to sales or relationship management.6 billion business. "You want to experiment. When he called sports marketing contacts.

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