In the past few years the number of undergraduate finance majors and MBA students interested in taking the Chartered Financial Analyst (CFA) exam has been on the upswing as students look to distinguish themselves in an increasingly competitive job market. The proportion of finance students taking the CFA exam has increased from 25 percent to 32 percent over the past two years, according to the CFA Institute, a nonprofit organization that awards the CFA charterholder certification, one of the most respected credentials in the investment management field.
“We are seeing a lot more demand from schools, which means presumably it is coming from students,” he said. “More and more undergraduates are thinking about this early in their careers,” says Stephen Horan, the CFA Institute’s head of university relations and private wealth.
The credential can help boost candidates’ salaries significantly and qualifies them for jobs as security analysts, portfolio mangers, and investment consultants, the organization says. Today, half of the candidates that sit for the first-level CFA exam are 25 years old or younger. As interest in the exam grows, many undergraduate business programs, as well as MBA and other master’s programs, are seeking to align their coursework with the CFA curriculum and help a new generation of students prepare for the rigorous exam, which requires 300 hours of study for each of the test’s three levels.
Not surprisingly, the CFA Institute has been flooded with requests from colleges and universities seeking to build formal relations with the organization. The only problem: The CFA Institute’s University Program Partners, which recognizes universities that teach a significant portion of the CFA curriculum, was at capacity. There were already 146 undergraduate and master’s degree-granting institutions in that program, and “it wasn’t designed for volume,” Horan says.
The CFA instead came up with a novel way to recognize the work of a far larger number of institutions, allowing them to market themselves more effectively to students seeking deep analytical skills for careers in finance. Unlike the partners program, which comes with obligations toward CFA, the University Recognition program simply recognizes those schools incorporating at least 70 percent of the CFA curriculum into their course work. This May, the CFA announced the first five schools recognized by the institute, but it expects to recognize “hundreds more” as universities prepare for a growing number of students to take the exam, says Horan.
James Madison University’s College of Business in Harrisburg, Va., is one of the five schools recognized under the new program. The school first began its process toward becoming a program recognized by the CFA when in 2007 it transformed a “sleepy capital markets course” into a dynamic quantitative methods class that aligned closely with the CFA curriculum, says Pamela Peterson Drake, a professor of finance and department head at the school, who herself is a CFA charterholder. Tweaking that course set off a chain reaction, and soon the school was adding other CFA-oriented classes, such as a financial analytics and risk management course, Drake says. Today, the curriculum covers nearly all the material students are expected to know in the level-one exam and even some of the second level, she notes. Anywhere from five to 10 college seniors take the exam each June, and many plan to take it in the year after they graduate, she says.
“The employers consider it valuable, and if a student says I’m a candidate for level one of the CFA exam, it sends a signal,” she says. “In this job market, you need to stand out.”
Other universities, such as the University of Colorado’s Leeds School of Business, are specifically hiring faculty to help raise awareness about the school’s work incorporating CFA material into finance courses. Gregory Seals, director of the school’s Burridge Center for Securities Analysis & Valuation and a CFA charterholder, was hired by the school six months ago. One of his first tasks was to make sure the school’s finance curriculum met CFA standards for the new recognition program, he says. Ten college seniors have signed up for the exam, and he is hoping to double that number in the next few years, especially now that the school has been officially recognized by the CFA Institute, he says.
MBA programs also are getting in on the act, including Rollins College’s Crummer Graduate School of Business in Winter Park, Fla. Crummer has three finance faculty who are CFA charterholders and each year gives scholarships to five to 10 students who are planning to take the CFA exam, says Halil Kiymaz, an associate professor of finance. The school received the official CFA recognition this May, but students have been coming to the school for years because of the school’s strong emphasis on CFA coursework, Kiymaz says.
Riyaz Mehta, a 2010 MBA graduate of the Crummer School, received one of those scholarships while a student and has since taken two of the three CFA exams. He is planning to take the third and final level of the CFA exam next June. He works in a research and corporate strategy and development role at Sanofi Pasture, the vaccine division of Sanofi-Aventis Group. But he’s hoping he’ll eventually make his way into more of a finance and investment role, where he’s confident being a charterholder will help set him apart from the competition. Says Mehta: “It’s the gold standard, and as far as I’m concerned there is nothing to match it if you’re going into the field of investment.”