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Do CFA Holders Outperform the Rest?Feb 4, 2010

Jon Jacobs

When considering whether to pursue a credential such as a Chartered Financial Analyst (CFA) designation, the next question likely to come to mind

after "Will it upgrade my job prospects or compensation?" is, "Will what I learn improve my job performance?"

A review of published research "reveals a patchwork of studies that don't uniformly and unequivocally show outperformance by charterholders,"writes Christopher Wright in the January-February issue ofCFA Magazine, published by the CFA Institute. However, "The studies finding that thecharter produces demonstrably superior job performance so far outnumber the ones that dont. This m ay be a preponderance of the evidence but notclear and convincing evidence or proof beyond a reasonable doubt."

The question is more provocative than you might think. For one thing, the CFA Institute's own ethics rules specifically prohibit members from makingstatements such as, "CFA charterholders achieve better performance results," or "As a CFA charterholder, I am the most qualified to manage clientinvestments." However, the institute is updating its Standards of Practice Handbookand expects to publish a revised version later this year.

One reason conclusions on performance differ is that researchers didn't necessarily examine similar data sets or use similar performance criteria.Studies focused on different fund types, time periods and countries, and varied in how they defined return, risk and other key measures.

The Numbers, and More

Out of 14 published research studies summarized in the article, nine concluded CFA holders outperformed their peers in terms of returns, volatility,tracking error, or earnings estimates and three concluded CFA status is unrelated or negatively related to performance. (Three of those studies alsofound MBA degree holders outperform managers without MBAs, while three others found MBA holders underperform.)

But it's not as s imple as toting up numbers, the artic le notes. For instance, association isn't causation: if people who hold one or another credentialwere smarter than their peers to start with, then you shouldn't expect to become a better investor or trader if you go on to acqire that credential.

Aron Gottesman, a Pace University finance professor and co-author of a 2006 study that found mutual funds managed by CFA holders don'toutperform but those managed by graduates of top MBA schools do, told CFA Magazine he nonetheless views the CFA charter as "very useful forobtaining a career in finance." TheUniversity ofToronto's Gus De Franco, who co-authored a study published last year that found CFA-holdingsell-side equity analysts are ahead of the packin their earnings forecasts, said employers see the designation as a signal of knowledge andcommitment. And that, he said, is "very important for younger, less experienced professionals who want to enter or have just entered the investmentcommunity.

Tailoring Your Resume Isn't 'Cheating'

Jul 1, 2009

Jon Jacobs

Do you ever feel pigeonholed when you're looking for a job? Make sure you're not pigeonholing yourself.

Some job-seekers paint their skills and experiences in identical language whenever they send out a resume orgo to an interview. But talk to a career specialist, and they'll tell you candidates who don't modify theirpresentation to fit a specific employer's needs are shooting themselves in the foot."You should never lie, but you absolutely must re-position yourself. You have to say, 'What would be of mostinterest to this employer?'" says Kate Wendleton, president of the Five O'Clock Club, a nationwide careercounseling network.

"You don't have to say everything you've done" in past jobs, Wendleton explains. "You just have to say thosethings that are most im portant to your target market."

Career changers or recent graduates with li ttle experience may feel it's dishonest to play up those parts of their background that relate to the role theyseek. Commenting on our story Cover Letters: Not Extinct, Just Evolved, one eFC user wrote: "How do you tailor yourself to the needs of theemployers if you have never done what they are looking for? That, I think, falls within the category of cheating."

Yes, misstating facts is unethical. But candidates still have ample scope to decide how to present themselves, and which features of their work historyand personality to put forward. For instance, it's perfectly legitimate to rephrase past job titles, as long as your wording reflects either the actual functionyou performed or your level of responsibility. It's also legitimate to modify job descriptions, moving to the top those achievements or activities that relatemost closely to the specific role you're applying for.

Flexibility is Healthy

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Being flexible about how you view yourself and present your qualifications is natural and healthy, says Jay Gaines, chief executive ofJay Gaines &Co., an executive search firm focused on senior roles in finance, information technology and manufacturing. "Most people don't have deep, fixed ideasabout their careers," Gaines says. Especially if a candidate has limited experience, "You want to experiment, you want to explore, you want to see ifyou can maybe find your sweet spot. There is nothing unethical about looking at your background fluidly. Most people have the abili ty to performmore than one type of role."

For example, Gaines says a back-office professional may demonstrate exceptional interpersonal skills suitable for c lient-facing roles. He's seen peoplemove from information technology to sales on the s trength of how well they managed internal relationships. A background in product development ormarketing also can be a bridge to sales or relationship management.

Wendleton rattles off successful transitions by Five O'Clock Club members, including her own switch from technology specialist to counselor. Whenmaking her move, she played up her one year of experience training people to use computers, and de-emphasized the technical side of herbackground.

Adopt YourTarget's Terminology

Among the lessons she draws: "You have to use the jargon of your target market. That way, you're making it easier" for employers to see you in theproper light.

One club member wanted to return to sports marketing, where he had a 15-year career before spending five years at a mortgage unit ofCitibank.When he called sports marketing contacts, they were put off by seeing "mortgages" near the top o f his resume, Wendleton says. The solution was toplace a "summary" section right below his name and address, in order to spotlight his sports background, and re-word his most recent job title anddescription to emphasize his marketing skil ls and remove references to mortgages.

The summary began, "Fifteen years in the leisure / sporting goods industry." His last job title changed from "VP - Segment Director, Shelter Business"to "VP - Business Director." The initial line of its new description read, "Ran a $4.6 billion business."

Get Out of Your Pigeonhole

"De-emphasize the specialty area, and emphasize the accomplishments," Wendleton also says.

For example, another club member had worked entirel y in international divisions. At the time of his search, there were no job openings in internationalwithin his target i ndustry. So he purged his resume of the word "international." Still another member found her extensive background in sugar salescame off as too narrow when she sought positions with bulk foods businesses. T he problem disappeared after she changed her resume's mentions of"sugar" to "bulk foods" - which was accurate, since sugar is a bulk food.

Originally published Sept. 5, 2007.

Do you tailor your resumes and cover letters for each prospective employer? Share your advice by posting a comment below.