Which is better CFA or financial modelling?
While CFA offers prestige, Financial Modeling provides accessible practical skills. Proficiency in financial modeling enhances CFA pursuits. In simple terms, mastering both is pivotal for a successful finance career. CFA imparts theoretical knowledge, while Financial Modeling equips you with practical skills.
It is a valuable, reliable method that helps many businesses grow. It is also why financial modelling analysts are in high demand. Many established professionals such as investment advisors, tax specialists and accountants got a head start in their careers by learning this essential skill.
Although the CFA curriculum is quite broad, it does not cover the management training and soft skills that MBA programs teach. In addition, all calculations are done by hand or on a financial calculator, and the curriculum does not cover the Financial Modeling Skills required on the job.
While both of these certifications are common, CFP is the more common certification for a financial advisor because it is more tailored to financial planning with individuals.
While effective financial modeling takes significant time and expertise to complete, the considerable benefits provided make it well worth the investment. Financial modeling is an essential tool used to manage risk, allocate resources, make smart investments, secure funding, and develop long-term growth strategies.
Yes, industries like investment banking, private equity, equity research, and corporate finance highly value professionals with both CFA and financial modeling skills, crucial for in-depth financial analysis and decision-making.
The CFA course opens up opportunities in specific fields like investment banking, credit analysis and equity research. These areas also require you to be adept at financial modelling. A CFA-certified candidate who lacks training in building financial models will lose out to those with the expertise.
The Chartered Financial Analyst (CFA) qualification is a big asset for an investment professional and should be highlighted on a resume. The CFA Charterholder Program involves passing three six-hour exams and putting in four years of investment-related work.
The Bottom Line
Overall, the CFA exams are very difficult, but candidates can increase their chances of passing by studying for over 300 hours, utilizing alternative prep materials, answering as many practice questions as possible, and creating a structured study plan.
The CFA charter is one of the most respected designations in finance and is widely considered to be the gold standard in the field of investment analysis.
Is CFA still respected?
If you're aiming to work in roles such as financial analysts, portfolio managers, or investment bankers, the CFA designation can be a valuable asset. However, if you want to pursue careers in other areas of finance, an alternative certification or qualification may be more relevant.
| CFA Level | CFA Salary As per Level Wise (per annum) |
|---|---|
| Level 1 | INR 6,00,000- INR 8,00,00 |
| Level 2 | INR 9,00,000- INR 17,00,000 |
| Level 3 | INR 20,00,000- INR 35,00,000 |
On average, a CFA charterholder in portfolio management makes US$126,000 base salary, with a total compensation of US$177,000. A Certified Financial Planner's median total compensation is $124,870 (ranging from US$51,000-134,000 as commission plays a bigger role in total compensation).
For most, it takes years to master this skill. The time involved with creating specific financial models also varies, depending on the project and complexity. Whereas some models are created in just a few days when estimates are used, it's common for the process to take months to complete.
| Annual Salary | Monthly Pay | |
|---|---|---|
| Top Earners | $180,000 | $15,000 |
| 75th Percentile | $122,000 | $10,166 |
| Average | $103,840 | $8,653 |
| 25th Percentile | $71,000 | $5,916 |
Key professional roles that require financial modeling skills include Investment Bankers, Private Equity Professionals, Real Estate Developers, Commercial Bankers, Equity Research Analysts, and Venture Capitalists.
However, CFA is a master-level equivalent qualification and not a skill-based certificate. It takes 3-4 years to complete. Moreover, some parts of financial modeling are theoretically covered in CFA. The goal of the FM course is to get a whole understanding of the CFA program and how to pursue it.
In Financial Modeling, you will learn how to build three-statement financial models as it's done on Wall Street. You will explore best practices, discover optimal model flow and design, and strengthen your Excel skills alongside the instructor in a step-by-step series of videos.
If you're a Chartered Financial Analyst (CFA) Charter, then you can easily make your way to IB industry.
Although some Series 7 licensed investment advisors also hold a CFA charter, most careers requiring a CFA don't require a Series 7 license. Unlike the Series 7, the CFA certification does not expire. As such, it is a certification that can be used in marketing your personal skills throughout your career.
When should you do financial modelling?
- Raising capital (debt and/or equity)
- Making acquisitions (businesses and/or assets)
- Growing the business organically (e.g., opening new stores, entering new markets, etc.)
- Selling or divesting assets and business units.
If you are a CFA Program Candidate you can add a candidate digital badge to your LinkedIn profile by adding the digital badge URL to your profile. You will also be asked to provide a description of the badge base on your current candidate status such as "passed Level I" or passed Level II".
1) Having a CFA Charter increases average salary by 57%
In 2024, candidates who passed CFA Level 1 on average experienced a 32% increase, whereas candidates that passed CFA Level 2 saw an average increase by 39% to their total compensation.
Having said that Fixed Income, Derivatives, and FSA are the hardest level 1 CFA exam topics, it's time to rank all of the 10 level 1 topics by difficulty. Difficulty is a subjective criterion but this hard-to-easy topic hierarchy is meant as a guideline to help you approach CFA exam topics sensibly.
Same idea as for L1, the idea is that if you score >70% on the overall exam, you should pass. Actually those stats are old, I got a 100% in December. It said A+ on my score results. In addition to putting CFA level II on my resume, CFAI has agreed to allow me to wear capes to interviews.
