If you could sit in the comfort of your home, study for about two hours a day for five months, and pay approximately 20% of the fees of an MBA to get a credential that is acceptable across the globe, would you do it?
That would sound like a no-brainer. But, many young graduates who would agree with that question would still not take up CFA. For many reasons – the exams are difficult, they do not have the time, or ‘someone’ in their social circle told them an MBA is more important. These reasons are just different forms of avoidance statements.
However, if you are one of the determined young graduates looking to build a career in high finance and want to get your CFA, you should be very excited. A developed economy with a growing job market has become very attractive for CFA aspirants – Germany.
The Global CFA Job Market
Before we dive into what makes Germany one of the best job markets for CFA aspirants and charter-holders, we should establish some context.
1. Most Common CFA Roles
First and foremost – you should understand what your CFA prepares you for. It is easy to go for answers like ‘high finance’ and ‘investment banking.’ But, those answers will not help you develop a career strategy. Instead, you need a more specific understanding of the job market for CFA aspirants and charter-holders.
(Note for Aspirants: You should ideally aim to start your search in the job market after your CFA Level II is done and dusted. This is because you have a solid grounding in asset classes, basic accounting, and portfolio management.)
Here are the most common roles that CFA aspirants and charter-holders succeed in getting into:
- Equity or Fixed Income Research: CFA aspirants and charter-holders understand financial statement analysis, quantitative techniques, and different asset classes. These, put together, make them the ideal candidate for research roles in major investment banks, asset management companies, and even dedicated boutique research companies.
- Portfolio Management: While CFA has dedicated modules on portfolio management, jobs in the industry are available only for candidates who have a track record of generating alpha in a professional capacity or have worked in the research space for a while. Many wealth management firms hire for roles that include both advisory and portfolio management aspects.
- Wealth Management: Wealth Management roles are largely considered to be sales-driven. However, CFA can be a tremendous addition to your people skills if you choose to build a career in this space.
- M&A Advisory: The CFA program delivers several critical skills essential in an investment banker’s everyday life – financial statement analysis, corporate finance, and equity valuation. You can use these skills and get an edge in the competitive investment banking hiring cycle.
- Corporate FP&A: While these jobs generally require a background in accounting, CFA certainly gives a good theoretical and applied understanding of several key concepts which can help you deliver value in making and managing corporate finance decisions.
2. Global CFA Job Market: Most Common Hubs & Companies
Now you have a good understanding of the type of roles most suited for the students and graduates of the CFA program. The only other deciding variable in the job market is the location.
Since international trade is spread worldwide, you will see financial services companies in every major city across the globe. But, certain cities have become hubs for investment banks, asset management companies, and other companies that frequently hire CFA charter-holders and aspirants.
- New York City: Home to the famous Wall Street, the city is the home to many major American investment banks like JP Morgan Chase, Goldman Sachs, Morgan Stanley, and BNY Mellon. It is also the home to boutique investment banks like Evercore, Lazard, and PJT Partners.
- London: The city’s division between the City of London and the municipality has long given the financial services firms a fertile ground to grow their business. That is why major investment banks and CFA recruiters have offices in the Canary Wharf. The city has been the financial services trade centre for the European markets.
- Hong Kong: The city has long served as North American and European investors’ gateway to Asian markets.
While these three cities have dominated their share in the global markets, there are new markets and economies which have started growing at a commendable rate. One such market is Germany. And such growth translates into an immediate need for talent. That is where this gets interesting for the CFA aspirants and charter-holders.
CFA Jobs in Germany: Everything You Should Know
The German market is growing. But, there are several key areas where it stands out from its peers in the United States and the United Kingdom. For instance, the East Coast of the United States is the home to several financial services companies, from investment banks to hedge funds. Most tech companies have their headquarters located on the West Coast – which is literally in a different time zone.
On the other hand, Germany is opening a wide range of opportunities within one market.
1. Popular CFA Jobs in Germany
The website eFinancialCareers is a great platform for global listings of jobs across different pockets of the markets in different geographies. Its recent listings of the jobs for CFA charter-holders and aspirants showed over 923 jobs available across Germany.
To put that in context, the United States had over 2661 jobs. However, the working population in the USA is over 157 million – which is 3.8 times the working population in Germany. Compare that with the number of job listings, only 2.8 times that in Germany. And that gap shows – how the German financial services market is aggressively sourcing talent.
- Accounting & Finance
- Asset Management
- Investment Banking
- Private Equity & Venture Capital
- Risk Management
- Corporate Banking
Another trend in the German financial services job market is the number of jobs available for investment banking careers. Generally, these are the most coveted jobs in the financial services industry. They are high-paying and tend to offer a great career trajectory.
However, the number of openings for investment banking roles in Germany is higher than in several other key verticals like consulting, corporate banking, and compliance.
2. Educational and Professional Requirements
CFA, on a standalone basis, is an industry-recognized credential. It can deliver applicable skills, recognition, and employability – all at the same time.
However, if you want to increase your probability of employment or want to develop subject matter expertise, here are some other credentials you can use to complement your CFA studies:
- Master of Finance: MSF is becoming a popular program across the globe. The master’s degree allows students to get a deeper understanding of several fundamental concepts in finance and prepare for the CFA program at the same time. Germany is home to four of the world’s best MSF programs, as per QS Rankings – WHU, Frankfurt School of Finance & Management, EU Business School, and Goethe Business School. The programs generally last for two years.
- MSc Financial Engineering: For roles in quantitative finance, an MS in Financial Engineering is more suited. Such programs tend to demand academic background in STEM fields and focus on insurance mathematics, financial mathematics, statistical & quantitative modelling, etc. Alternatively, you can also focus on the mathematically rigorous CQF program.
3. CFA Job Comparison: Germany vs. India
- Number of Coveted Roles: A search query on eFinancialCareers shows India is home to just 30 comparable jobs relative to Germany. While the Indian job market is home to several financial services roles, many of these roles do not come in the range of salaries and career progression compared to their German counterparts.
- Front Office Roles: The Indian job market poses further challenges because many of the roles in India are back-office and middle-office roles that focus on operations or KPO functions. These roles are easier to get into but do not offer the salaries available to front office employees.
- Opportunity for Shifting to a Major Hub: Unless you attend the MBA programs at one of the old IIMs, FMS, or XLRI, there is very little chance that you will be able to shift to a global financial hub like NYC, London, or Hong Kong – even if a global bank employs you. On the other hand, German banks offer more proximity to the European markets and lateral hiring roles in London.
- Lifetime Earnings: Generally, people believe that native employees are often paid more than their immigrant counterparts in developed economies. The same trend is visible in Germany too. However, an academic study conducted on the salary data between 1994 to 2015 in Germany showed that individual industries and language proficiency could cover 80% of such wage gap. This means that if you can get the necessary language skills and be in an industry like financial services, which requires talent, there is a greater probability that you will be paid at par with the local talent at the German financial services companies. Once you have accounted for this idea, you can easily see how the exchange rate between Euro and INR can lead to better lifetime earnings in Germany.
How to Get a CFA Job in Germany?
Here is a framework you can adapt to target a job in Germany.
1. Get Your CFA
First and foremost – focus on finishing your CFA. You can start while you are still finishing your undergraduate education. Then, in due course, you can also take a full-time role and get the much-needed experience.
You have to focus on finishing your CFA as soon as possible and acquiring the skills required to excel in your chosen area of expertise. Many students get the CFA charter every year. And yet, these students have divergent career trajectories.
Focus on acquiring skills like financial modelling, financial statement analysis, and equity valuation early in your career. This will help you develop a strong foundation of applied knowledge and accelerate through the recruiting cycle.
2. Scout for Roles and Identify the Right Fit
Applying for all the jobs across all the companies mathematically increases your probability of getting hired. However, you cannot have the best fit for multiple roles. And hence, despite putting in the time and effort, you will get several rejections. This is why, despite its probabilistic appeal, applying to every available role is not the best idea.
Try to find out the roles that excite you. Do not go just by the salary data available for such roles. Instead, take online courses, acquire the requisite skills, and read the job descriptions to see what fits your long-term career goals.
3. Conduct Informational Interviews
Once you have defined your ideal goal, the next steps will start getting straightforward. First, find the people on LinkedIn who are currently in the role you want to be in a few years. Then, reach out to them with a cold message. Something in the lines of this should work:
“Hey, Ms. ABC. Much like you, I have a background in Engineering from India. I am curious to learn about your journey to Germany and how you navigated the job market there. I would like to pick your brains about your experience.”
(Note: Apart from educational background, you can use ‘CFA’ as a common ground to establish rapport.)
You can modify that template based on the common grounds between you and the person you want to connect with. Once you have connected with this person, schedule an informational interview. This is a form of networking where you try to learn more about the other person. Make a list of thoughtful questions that are not answerable with a Google search.
Conduct the interview over a call or video conferencing. Once you have built enough rapport, see if the person would be comfortable recommending you for a role in her company.
4. Apply with Referrals
Now comes the final stage – use the referral from your new connection to make a reasonable application for your targeted role. If the person is not comfortable recommending you, just ask for the next person from her team you can speak with.
Best Practices for Getting a CFA Job in Germany
The earlier-given framework is more of a general guideline on locating roles and finding the information necessary to target them. Use these steps to maximize your chances of converting such roles:
- Get Comfortable with HGB (German Accounting Standards): Germany uses a different set of accounting standards compared to US GAAP. In addition, these standards are aligned with IFRS. But, make sure you understand the key differences between HGB and other accounting standards.
- Acquire German Language Skills: Proficiency in the German language can make you more employable and be a more effective employee at work. Academic studies have established that language proficiency and the right industry can cover over 80% of the wage gap between international and native candidates.
- Prepare a 12-24-Month Timeline: The typical hiring cycle in India lasts for a few months. But, you are targeting a career change to a different continent with different laws and cultural backdrop. So, make sure you give yourself at least a year to go through the transition from the day you start applying for jobs in Germany.
The German job market for financial services is growing faster than many of its global counterparts. On top of that, it is home to some of the most coveted jobs in high finance and gives great access to a career in major financial services hubs like London. But, how do you finish your CFA and get the necessary skills to get a job in Germany?
You should explore the CFA program at IMS Proschool. This way, you can learn the fundamentals of the CFA curriculum from industry practitioners and acquire necessary skills in financial modelling, equity valuation, and financial statement analysis – all on one platform.
Take the first step toward a rewarding career in Germany with your CFA credential. Click here and explore the CFA prep program at IMS Proschool.