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Hot CFA Examination and Cold Financial Industry Employment

Dec 23, 2008: Macroeconomic

Just before the December CFA exam, 2008, all China CFA program candidates received a letter from CFA institute, the first sentence of which is” Practically overnight, it seems, the world has changed. ” In this letter, CFA institute reaffirms the basic investment principles: diversifying assets, taking a long-term view, holding a steady course, and resisting the urge to overreact to the inevitable ups and downs of economic cycles. Finally, CFA institute emphasized that in this upheaval in the global financial industry, “the path to professional excellence represented by the CFA charter is now more important than ever: it's precisely during periods of market turmoil that dedicated, ethical investment professionals are more urgently needed.”

The CFA institute's statement is verified in the coming CFA exam on Dec 7, 2008. CFA institute rented two big halls in Beijing to organize the exam; one is in Haidian Exhibition Center, and the other in International Trade Center. Besides Beijing, China has another two examination locations in Shanghai and Guangzhou. It's estimated that above 6,000 candidates take part in the exam in China. 6,000 is not a small number, compared with the total 1,200 Chartered Financial Analysts in China as of December 2008, and 80,000 in the whole world.

Three years ago, participating CFA exam is not popular even in the top Chinese business schools. The examination fees are rather costly; meanwhile, only a few joined fund management companies consider the CFA qualification important in the job application. Many in domestic financial institutions hadn't even heard of the CFA exam.

However, things are different now. Students in business schools and in financial department, employees in the financial institutions, especially in the asset management firms and funds all realized the importance of getting the CFA qualification in their career life. The hot financial industry also attracts many smart people in other industries flooding in.

In 2007, China stock market sees the historical increase, of which, Shanghai Composite Index increased 97%; meanwhile, direct finance booms for IPO and SEO, for share issues and bond issues. In 2007, there were 227 IPO cases in China, financing about Rmb447bn. All investment banks, fund management companies and financial institutions had a good harvest, which supported their aggressive expansion whereafter.

Only one year later, just as what is said in CFA institute's letter, the world has changed. At least 166 thousand employees in global financial industry lost their jobs since the beginning of Sub-prime Loan Crisis in July 2007. Although China hasn't such big-scale layoff, the whole industry is in its downturn. More job seekers are competing for fewer positions. Under such circumstances,, CFA exam attracts more and more people. In the recession periods, the CFA qualification is more important for job seekers.

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