Update! I finally passed all the CFA exams and wrote an eBook about the program. If you're interested, click here.

CAIA vs CFA

by Lumilog on September 7, 2012

I know! I promised I wouldn’t ever again consider signing up for any formal education programs, because after the CFA, I was D-U-N, done!

But in a moment of weakness – after one of those 7.2% ABV Sierra Nevada Torpedoes – I found myself at caia.org doing some recon. If the CFA essentially forged a raw, out-of-shape recruit into the investing equivalent of a Navy SEAL, maybe doing the CAIA afterwards could be like sending a SEAL to sniper school? Does that make sense?

…only if you’re thinking with your Sierra Nevada.

I eventually came back down to earth, but I did return with some good intel that I will share only with you, my platoon mates. Stand by to copy.

CFA CAIA
Prerequisites
Have a bachelor’s, be in the final year of your bachelor’s, or have any combo of college + work exp. that totals 4 yrs Apparently none, though they do say you should have a “basic foundation” in finance and quant
# of Exams
3
2
Minimum Cost: registration + exams only Level 1: $1080
Level 2: $640
Level 3: $640
Total = $2360
Level 1: $1550
Level 2: $1150
Total = $2700
And after I pass the stupid exams, before I get to put the letters after my name, I still have to… Accrue 4 yrs relevant full-time work experience, if you don’t have it already Accrue 4 yrs only if you don’t have a bachelor’s. Otherwise, only 1 yr of work experience required
Affiliate Members Haven’t done the program. They’re just professionals who want access to the publications, networking, events, etc. Have passed all the exams but haven’t completed the work experience requirement yet
Minimum Suggested Study Hours Per Exam
250
200
The exams are given how often? Level 1: 2x per year
Level 2: 1x per year
Level 3: 1x per year
Level 1: 2x per year
Level 2: 2x per year
Recent Exam Pass Rates Level 1: 38%
Level 2: 42%
Level 3: 52%
Level 1: 68%
Level 2: 58%
My impression about the program BEFORE reading about it
Delta Force
Basically just Volume 6 of every CFA Level
My impression about the program AFTER reading about it The Gold Standard. This is what you want if your inclinations are towards building & managing portfolios or doing research analyst work Good knowledge for a fund-of-funds sort of manager who’s looking for a skill set that will help him add non-traditional, low-correlation asset classes to a portfolio of traditional equities and bonds

And probably the biggest question is, what are the designations relatively worth? In forum-after-forum, the suggestions were that if you’re trying to decide between the two, want to open career doors, get respect, etc., there’s really no comparison: CFA all day. A caveat though is that there are no guarantees about it getting you a job. Many believe we’re starting to get an oversupply of CFAs.

As for the CAIA… it’s really something that you might want to add on top of a CFA to complement it. (I knew it! Sniper school!)

…but only in very rare situations, when one particularly needs alternative asset expertise, would one choose the CAIA instead.

And as one person succinctly put it, if you’re wondering how many of these FRM, CFP, CAIA, and CMT thingies to go after: CFA + MBA, then you’re done.

Now my wife already knows I’m a special operator, but I floated a trial balloon of maybe thinking about the CAIA, so that I can be really special. Instead of shock and awe at my ambitious pursuit of challenge and self-improvement, I got shock and disapproval.

So looks like this soldier of fortune will only fight in minor skirmishes at iTunes U and Coursera for the time being. The truth is, I was only pulling her leg. I think finishing the CFA program permanently cured me of the desire to prove something through long, difficult academic programs.

But I won’t be held responsible if you switch out my 12.5% ABV rioja with a 15.0% Zeven Deadly Zins

Update: I wrote an eBook about my experiences in the CFA Program. If you’re interested, click here.










{ 4 comments… read them below or add one }

aussie September 13, 2012 at 3:03 am

This is too funny. I also found myself looking at post grad research degrees (economics) lately… I took a cold shower.

Good to see your wife has taught you to use the vacuum. Now is the time to make up for those terrible CFA years!

Take it easy.

Emma Tameside September 24, 2012 at 6:15 am

I should really do some more research before applying to courses. Although I’m happy enough with CFA to be fair. Applied a few days ago to several CFA courses, and currently awaiting word back. I just happened to stumble across your blog while looking up some first-hand experiences of CFA.

Would it be possible to get your opinion on it? If you have a blog post about it, I’ll take a look around and surely find it eventually!

Lumilog September 27, 2012 at 1:52 pm

Hi Emma!

I only used the CFA Institute study guides for Level 1, and passed on the first try. But after attempting the same with Level 2 and failing on my first attempt, I quickly switched to using Kaplan / Schweser. To me the most important tools were the Qbank and the Practice Test volumes. I used a more expensive package for Level 3 with videos, mind maps, etc. but didn’t get as much out of them.

Best of luck to you and keep in touch!
lumi

TDawg March 22, 2013 at 11:56 am

thanks for the comparison on caia. i like the comment that someone had about considering a grad program in econ & took a cold shower. that’s where i’m at. i swore i would use my spare time after cfa to do anything but study anything related to what was on the exam. like classic roman & greek literature. anything. but i found/find myself considering the caia. i have an undergrad in physics, minor in math was an equity analyst writing buy/sell opinions on semiconductor & computer hardware stocks from ’97 through 2006 then did portfolio management til 2008. then got divorced and considered auto parts. auto parts are not in the news. auto parts have transparent price realization. auto parts can just be swapped out. anyway. auto parts don’t pay child support and healthcare. (i considered doing a franchise). i’m back in the investment game. considering caia. i think i’ll take a cold shower and practice my minor pentatonic blues scale and forget about investments again.

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