CFA or FRM: Resolving the Dilemma for Students

CFA and FRM are two of the leading financial certification in The indian subcontinent. Many MBA students pursue these financial certification to enhance their financial knowledge. GyanCentral attracts up with Aditya Ahluwalia, expert CFA coach to look for answers to the CFA or FRM challenge and also career options after CFA and FRM.

The benefit that a MBA student with a CFA degree have over a MBA devoted to finance?

I have personally done the degrees cfa level 1 mock exam 2019 pdf. Used to do my pga masters in operation administration (MBA) from FMS Delhi. The MBA finance degree in my opinion covers about 20% of what gets covered in the entire CFA course load (in terms of financial knowledge). A MBA degree is more of utilizing holistic to management as it will likewise cover not for finance subjects like HRM, systems, marketing and general management. CFA is a certification dedicated to the field of finance. In my opinion no examination can be as inclusive and comprehensive in finance as CFA is.

What are the job opportunities for MBA students after CFA?

The opportunities in the finance world in The indian subcontinent though growing are becoming extremely competitive. A lot of MBA students are competing for the same job. During campus positionings companies do not have the time to go through each and every resume or interview every candidate. The students who get shortlisted for campus positionings are students who have an extra push on their resume. A CFA degree also provides the recruiter a perception that the student has more financial knowledge than simply a MBA finance student. Hence CFA does support a lot to get shortlisted for the interview stage of MBA positionings. Even with positionings the information that a candidate gains is advantageous in his future job hobbies.

What are the profiles that a MBA in Finance with a CFA degree will be offered?

CFA is a comprehensive quiz in finance. So whether it be investment banking or collection management or fairness research or strategy consulting in the financial domain or corporate finance in a manufacturing company, CFA concepts are going to be directly applicable to your job. In case you are interested in a job in the financial domain the CFA designation gives an edge and imparts value to your knowledge and resume. A CFA training course today is more of a requirement than an advantage for a career in investment banking of private fairness. Doing a CFA today is not security of finding a job in investment banking or private fairness, it is depends on your financial understanding and communication skills.

What is the difference between CFA and FRM?

That is a a natural question that many students have.. I believe that degrees of MBA, CFA and FRM have to be looked at comments rather than as competing with each other. CFA teaches you the inside-out of finance, MBA finance teaches you how to link the financial aspect with the overall business management perspective. FRM is a designation which is dedicated to risk management. It provides the candidate a good perspective about credit, in business and market risk area of a business. A lot of students today (including me as a student) have taken all 3 designations. I believe all 3 degrees added to my knowledge and enhanced my employability. I would advise students not do an either or for the courses. CFA and FRM are not separate designations and are said to be complimented with the MBA degree or work experience.

How should a student decide between opting for a CFA or a FRM?

Firstly students have a disbelief that CFA takes three years while FRM just takes 2 assessments. So they really should not base their judgment on the duration of the course. CFA course load is much more inclusive than FRM. In one level of CFA it can be suggested that you learn more than two numbers of FRM combined.

Coming to choosing between CFA and FRM, if someone wants a more of utilizing holistic designation in finance then he or she should opt for CFA. The CFA certification does not restrict the domain to any niche in finance and for students who are uncertain of their preference in finance should opt for CFA. CFA will educate you on risk management, corporate finance, risk management and collection management hence the scope is bigger. If a candidate is sure that he wants to pursue risk management i. e. any profile in a bank or credit rating agency. The profiles can range from credit risk, relationship management, treasury or any profile related to risk management then one should opt for FRM as it is more direct and relevant to the niche of risk management in finance.

If fairness research, investment banking, collection management is your preferred field then CFA is the designation to pursue.

Does having cleared Level 1 or Level 2 in CFA have any importance?

Definitely, mentioning that you are a straight 1 to level 3 candidate of the CFA quiz holds a lot of weightage. Having cleared level 2 would be equivalent to having a FRM degree. Clearing one level of CFA also has value hence students should not be deterred from mentioning the same in their resume. Even if the candidate decides not to finish the CFA course they can still mention level 1 or level 2 in their resume. Students from a non-finance background typically can use the CFA degree to come at par with students from a finance background throughout their MBA course. The perception issue that majority engineers have about lack of financial knowledge can also be altered after pursuing a CFA course.

Apart from CFA degree other things a student can do enhance his resume?

I have experience in working at a senior level at a fund management company. Used to do my MBA, FRM, CFA and CIA (an alternative investment certification) which has helped me gain a lot of knowledge. Around my MBA degree i also did a large number of NCFM adventures which overlap with CFA course load so because of this is not required for every candidate to pursue. Instead of running after random certification, I would advise students to concentrate on basics. If you have done your MBA from a top collection institute that is good enough. Also doing live financial projects adds a lot of practical knowledge and helps in establishing industrial contacts which can be useful during positionings. Independent of the mentioned financial certification, I really do not believe any other course will add significant value to a scholar’s resume. Also the CFA society networking events may be useful. They open up good networking opportunities.

What questions should MBA students who have successfully cleared CFA or are pursuing CFA expect in job interviews?

Equities is very big in the Indian market and given that many back-end and front-end fairness research firms hire from top management schools hence being thorough with your valuation concepts, relative P/E multiple, DCF valuation. Understand corporate finance concepts like cost of capital and WAC should be revised well. NPV, IRR are questions which every candidate must expect in the job interviews. Concentrate on basics and then go to advanced terms. Majority of the students will be fresher’s in financial domain hence interviewers expect clarity of basic concepts which a student must be well-versed with. Value a company on your own using P/E or DCF model and grow deep with it. Do the easy things well.

The writer, Aditya Ahluwalia is a lead instructor at Finstructor, Mumbai. He’s cleared all numbers of the CFA and FRM assessments with top sectional performance across levels. Aditya is a computer engineering graduate from Punjab Engineering College, Chandigarh. He’s subsequently completed his MBA from the School of Management Studies (FMS), University of Delhi. Aditya currently works in the Indian fairness markets in the collection management team of one of the largest domestic fund houses. He brings with him invaluable experience from the fields of fund management, fairness valuation, collection management, risk management, quantitative analysis and attitudinal finance. Aditya has over 2000 hours of teaching experience to his credit. He’s been try really hard to doing training classes for the CFA and FRM programs for over three years.