How CFA will help you to get into Investment Banking/ Equity Research? Investment Banking: What is the buzz all about?

An Investment Bank (IB) has been one of the most coveted workplaces for financial analysts over the past decade. Prestige and glamour have become synonymous with investment banking. For some it is the profile, for some it’s the money and for some it is sheer pride. Let us scratch the surface a bit and unravel what’s behind an IB role and what it takes to get there.


A private limited company that looks after the financial concerns and needs for its clients is an singapore hdb bank loan interest rate Investment Bank. The main division that we’ll concern ourselves with is the advisory division. It is here that you’ll find yourself in the lucrative but demanding shoes of a financial adviser, source equity researcher (ER) and later move on to other prestigious careers in private equity, venture capital, and wealth management. Working as an equity researcher, your primary job would be to analyze your client’s performance ratio, financial concerns, forecast the financials (using financial modeling) and explore scenarios so as to make trade related recommendations.
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Having spoken to Mr. Allen Aravindan, a CFA Charter holder and currently the director-retail and institutional liaison at Ennovate Research Investment & Capital, at length about the various prospects and aspects of the field, we bring to you some excerpts from the interview:

go Proschool: What are some of the practical skills required for IB & ER?

get link Allen: In many firms, investment banking & equity research are interchangeable words. Most commonly, equity research is a subset of investment banking. The skills required depend on the function you get assigned. Assuming it’s an entry level job you require knowledge of financial statements, valuation techniques, industry/domain knowledge etc. Furthermore, you are required to practically apply and go beyond the analytics, mathematics, finances and economics you were taught in CFA. Proschool payday loans in waldorf maryland : Is it advisable that a plain MBA/ CA get into IB & ER?

gold loan guidelines rbi Allen : Well, no doubt that these qualifications will bring you the job you desire. However, you should be able to boast of an MBA degree from a top B school like the IIMs, Ivy League colleges etc. Furthermore, the same can be said for a CA. Alternatively, to get your hands on that dream job, completing the CFA will be beneficial. CFA holds so much value in this sector because you will be working in a pressure cooker environment. Thus, to prove that you can cope with it, you will be required to put in long work hours, be hard-working, diligent and self-disciplined. All this is proved when you complete your charter.

Proschool: What will be the skill gaps or how will they be lagging behind?

Allen: In an ever changing industry you have to continuously enhance your skills. If you are a plain MBA or CA, a major gap would be financial modeling skills and a sense of the industry. In addition to CFA, it would be advisable to enrol for some additional short-term financial modeling courses offered by institutes like IMS Proschool. Furthermore, investment banking requires a person to be broadminded and global. This is achieved marvellously through CFA. The high ethical and professional standards that are imbibed in the coursework, gain the confidence of the recruiters as they want international players who are capable of understanding nuances of business in different parts of the world.

Proschool: How can CFA bridge the gap?

Allen: CFA is a content program which caters to the entire investment industry and not just investment banking. Its extensive structure gives you a sound grounding in ethical and professional standards, quantitative methods, financial reporting, economics, financial analysis, corporate finance, portfolio management, equity, fixed income, derivatives and alternative investments.

Proschool: What is the path that a CFA can follow to get into IB & ER and what could be some possible interview questions?

Allen: Post CFA level 1 a candidate should actively try to get a job with a research profile with an investment firm. Questions are many and depend on the firm but mostly it will be related to financial statements and valuation techniques. Furthermore, you will continuously learn on the job.

How a CFA has an edge over others in the Investment Banking/ Equity Research Roles?

1. CFA Societies

Firms usually have “target” schools from where they recruit. For example, Pearson Specter from SUITS only recruits from Harvard Law. Therefore, if you want to become an investment banker and have not attended the required B school, it’ll be best to start networking at least 6 months before the recruiting season. This is where you benefit by becoming a member of the elite “CFA Societies”, where it is possible to network with investment bankers, portfolio managers, and equity researchers and get referrals from them. It is obvious that you would require an interview to get a job and since you have slogged for 900+ hours to get the certification, it is a good idea to attend these meetings!

2. CFA strengthens your profile, professionally and academically

Here we can look at two perspectives. First, if you are an industry professional working in finance, then a CFA can help you to enhance your career or bring about a switch in roles. The qualification would be particularly helpful in profiles like research analysts, portfolio managers, asset management roles, private bankers, relationship managers, fund of fund managers, financial strategists’ etc.

Secondly, if you are still studying then considering a CFA would be a good choice if you want to enter into investment banking. The CFA coursework will prepare you in quantitative techniques, derivatives, economics, corporate finance and other areas highly demanded by the recruiters. Thus, CFA would be a feather in the hat for a good resume which has a sound academic background and work experience in the form of internships.

3. It’s a real bargain!

Cracking the CFA or working in the investment banking sector is not for the weak hearted. However, your hard work and proper training will get you through. When compared to other professional qualifications, CFA demands more of your time than money. Usually, the preparation material is thorough, extensive and up-to-date. Additionally, since it is a global qualification you get mobility across economies and all in good time you get the returns!

4. Employers’ growing preference for CFAs

The following charts are from the CFA Institute’s pre- and post-exam survey of June 2016 which included approximately 85,000 candidates. They show the status of the “employment opportunities” in the coming 12 months in the U.S.A. and India.




The chart clearly shows CFAs are the hot preferences when it comes to employment, and most of these are usually in the Investment Banking/ Equity Research arena.

To CFA or not to CFA

It is definitely true that a CFA charter-holder is seen differently by the investors and industry professionals. This is mainly because the charter-holder has stood the tests of time and emerged with an undying capacity for learning, making serious commitments and she/he adheres to the highest ethical standards. Such qualities come as a blessing as most clients will depend on you to manage their financial affairs and these are what the investment banking community looks out for in the new recruits.

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