Whether the CFA (Chartered Financial Analyst) exam held on June 6, 2015 was difficult or not, if you took it in Asia, you're already in the majority. According to the latest data from the CFA Institute, the Asia-Pacific region is keeping hold of its world-leading position in number of examinees. Furthermore, China accounts for the largest percentage: 29,689 Chinese students registered for the exam last Saturday with a year-on-year growth rate of 16%. In fact, this number ranks second in the world after the US. We interviewed Mr. Dawei Xie, Executive Director and General Secretary of the CFA Society Beijing, about his views on the CFA’s exploding popularity in China.
Dawei Xie, CFA
Executive Director and General Secretary of the CFA Society Beijing
Q: Why has the CFA exam become so hot in China?
A: Actually its increase didn't just start one or two years ago. Over the past decade, the number of CFA candidates has maintained a high growth rate, which directly relates to the fast-developing domestic financial industry. As we know, what the CFA course teaches is not only investment-related professional skills, but also a kind of systematic and complete learning which is irreplaceable both at home and abroad. Currently, the domestic financial industry needs more and more professionals, and what these professionals need is systematic, professional and authoritative training. CFA meets this demand. So I think it’s very natural.
Q: Many Chinese students don’t know how to choose between the certificates of CFA, MBA or Master of Finance. Do you have any suggestions?
A: I think these three qualifications are quite different. Master of Finance and MBA are both degrees, while CFA is essentially a kind of personal learning outside school with a flexible learning schedule. It is suitable for some in-service workers, especially young people who have worked for two or three years and have plenty of time to take the course.
Q: Do most Chinese candidates only choose the CFA Level I exam rather than Level II or III? If so, why?
A: I don’t think so. People probably have such misconception because there are relatively few candidates registering for Level II. On general the number of people registering for Level II is small, since it is impossible for everyone to pass Level I and get qualified for Level II. This is an important reason. This phenomenon doesn't just exist in China.
Q: What is the pass rate for CFA Level III candidates in China? And the dropout rate?
A: In my impression, the CFA Institute can provide the pass rate data of all CFA candidates in the world, but it isn't specific to any particular country. As far as I know, the pass rate of Chinese candidates has no obvious difference from those of other regions in the world. It depends on the time and effort they put into their studies, not the country or region in which they live, and so does the dropout rate. When taking the Level I exam, many candidates could be studying for a master’s degree or only recently graduated, and they could be very busy or have other choices for their personal career development when they are able to register for Level II or Level III, and then it's natural to quit the exam. However, we've seen some impressive examples of people already in high positions in the industry completing the Level III exam. These are the people we admire.
Q: Between international banks and local securities dealers, which one values this qualification more in China? Which one employs more CFA holders?
A: I don’t think we can simply compare the two. Five or six years or even ten years ago, domestic institutes didn’t know much about CFA, so international banks valued it more. But in recent years, we've seen that domestic financial institutes - not just large banks and securities dealers but also many small, new foundations - have quickly accepted and valued CFA. These new foundations with few employees and on small scales give priority to CFA holders in recruiting staff. In my view, there's no great difference in the degree of recognition between these two kinds of institutions.
Q: If someone really wants to obtain good professional development, is it necessary to pass all the three levels of CFA?
A: I think it depends on one’s career development direction and decisions. Not everyone who passed all three levels has the same career development. As you know, from Level I to Level III, the CFA exams don't test you three times in the same aspect while enhancing the difficulty. On the contrary, each level covers knowledge and skills in different aspects, and matches a financial worker’s professional experience. For example, a fresh college graduate have to start as an analyst or assistant and do a lot of basic work, so he needs to know the contents of Level I; but if your work is related to investments and decision-making, you might need the knowledge and skills of Level III. Certainly, if you really want to work in a financial institution and enter a department or position related to investment management, I think it’s necessary to pass all three levels.
Q: What’s the biggest reason for the failure of Chinese candidates to pass Level I? Can you offer them some good advice?
A: I took the CFA exam, so I can tell you my personal experience. I think the biggest reason is lack of time and preparation. After all, it's quite difficult for those who have already been employed to engage in full time systematic learning for several months. Some institutions might support their employees to take this exam and offer them good conditions, but most people aren't so fortunate and they don’t have the time to read because of their busy work schedule. Actually, students have the same problem. Although they generally have more time, they are not sufficiently purposeful and may take too many exams to especially concentrate on CFA. In general, I think CFA is characterized by giving no chance to opportunists. The only possible way to pass the exam is by spending enough time to learn it systematically. I think that's the biggest problem.
Q: Is there any situation in which you would advise a Chinese candidate against taking the CFA exam?
A: Yes. If a student doesn't have a clear orientation of career development, I think it’s better to think twice. Of course, I won’t tell them straight out, “Don’t take the exam." I just think you need to decide what you really want. I heard that some undergraduates take as many qualification exams as possible because they have spare time from school. They think that more certificates means more choices for employment. In my opinion, certificates might not give them good choices if they don’t have a clear plan for the future. What if a student goes to an IT company after graduation? Then the CFA is useless to them.
