CFA vs Quant Masters
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- เผยแพร่เมื่อ 7 มิ.ย. 2024
- One of the most common question I get asked is, "can I get a a CFA instead of a quantitative masters such as a financial engineering degree?" Once I respond with, "no" which is the answer people don't want to hear, they continue to try and convince me that they are the same or the CFA is better. I'm not here to say one is better than the other. I'm here to show you the differences between the two.
A CFA is NOT a shortcut to working in quantitative finance and most quants don't care about the CFA. Quants who do get it either want it to show they can do traditional finance or as a way to help get promoted because they seem like a financial analyst and not a quant.
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Another great great video. Thanks Dimitri, greetings from Brazil.
I have my Msc In AI from Northwestern, I am now doing my second masters in Msc in Fin Eng at Stevens, the Maths is alot more tougher
As a CFA, I am surprised that this comparison is being made. On a standalone basis, a qualified CFA member cannot work as a quantitative analyst. A quant master cannot work as an investment professional or advisor. Really, there is no interaction.
i didnt know that, thats why its been made lol
I come to realize that. For people who wants to “do it all” you’re going to have to be a crazy genius.
Totally agree. Funny video...work experience matters at the end....!
Love how somehow you can read my mind and answer all the questions in my head 😀
I think it would be really cool if you could go through an example of using quantitative analysis on say a company/stock. Would be interesting to see the theory in action!
Agreed. Although quants do more of using models to sort through tons of different types of financial instruments, and then finding correlations with price action, and historical data. There is not much a quant could do for one stock, that someone that knows how to use excel couldn't do. I like the basis of the question though. It is always fun to see what algorithms quants are working on, and trends they see happening.
I come from a CS and data science background... I am pretty sure that quantitative finance has a very different and more theoretically rigorous perspective. This will really help many people with background like mine.
Great Video. Thanks Dimitri.
Excellent explanation!!!
Hi Dimitri, thank you so much for the great video. Do you recommend taking CFA paper before starting a masters in computational finance? And why?
If you want to end up on the investing side of quant finance the CFA can help. If you had it before you graduated with your MFE, it could give you a bit of an edge over other job applicants.
Hello Dimitri, first of all I want to say thank you for making these videos. You’re one of the only people on YT to go into such depth in this field, and definitely the best!
I’m currently undertaking a joint BSc in Mathematics and Comp Sci, and am also a full time FX trader. My uni has asked us to learn LaTeX as the predominant mathematics documentation software.
Is LaTeX widely used in industry, or am I better off getting to know something else that’s more widespread for white papers?
All the best
LaTeX is probably the best software for writing math. We use Word since our business colleagues use it but it's a pain for writing math.
Thanks for being a part of this channel!
it was good. really good. Thank you.
Very helpful. Many thanks.
Does the CQF course help?
Sir I am a regular viewer and a subscriber of your TH-cam channel
Sir could you please let me know that between Science and Commerce stream which should be taken by me for becoming a quantitative analyst.If you don't mind could you please let me know which bachelor's degree and masters degree do I need to pursue to become a quantitative analyst. Along with it which universities in the world provide these degrees.
I feel like the CFA is too broad a subject matter to compare with quant. CFA’s aren’t only quant enthusiasts, they are also leaders and advisors. To limit your path to only doing quant is perfect if you are entering a back office, research or quantitative role, but to understand the fundamentals of finance, and be able to apply your knowledge irrespective of role, is what’s key to the CFA, and items are continuously added to the curriculum to match industry trends.
Dimitri, are you a CFA?
Hi Dmitri! What are your thoughts on jobs that want a CFA? I noticed when looking at jobs some require it and some do not. As a quant finance student looking for finance experience should I be able to find something stats based that doesn’t require a CFA? I feel like HR likes to see CFA for certain jobs. As in, some job postings want you to be “quantitative” and have a CFA, a hybrid of sorts.
This is a great question which I did not cover in the video but should have!
There are jobs that do require the CFA or highly prefer the CFA. These companies are almost always ran by business/MBA grads or those who are older. For them the CFA indicates "quantitative" ability and has been a long time tradition in finance. These jobs are usually investment based positions and it is worth getting the CFA if you want to work in this area. I have actually considered getting the CFA but it has fallen low on my to-do list.
There are a lot of quant finance jobs that do not require and do not care about the CFA. Risk management, research quant, development quants, and stats arbitrage are some of them. The reason these areas don't care is because the CFA wouldn't add a whole lot of value for their jobs. Most finance can be learned on the job and I'm saying this as someone who has a finance undergrad and has worked in corporate finance and accounting. Of course having the CFA is helpful however for most quant finance jobs it isn't necessary unless you are working in investments or with business/MBA managers.
A lot of the business ran MFE programs really push getting the CFA as they feel this differentiates their graduates. Personally I feel this is a way to make their grads more marketable because they can't compete in the higher end quant jobs.
Wow this is interesting and good to know! I figured they were sort of two distinct job regions. Do you think it would be best to tell employers the CFA is something I am working toward in addition to my masters? Are most of the entry level quantitative roles going to be in middle office? Like something that can be done with a undergrad in stats. Are these positions I should try to target? I just wish to get some experience and money saved during school. I did see a fixed income trader role that wanted a CFA though.
Wont a stats degree teach me almost sll the math needed to be a quant? I've seen that stats requires calc1-2 and some calc3, probability, set theory, linear algebra, stochastic calculus when they go over stochastic processes.
Thank you Dimitri for all your videos, i'm a Finance student applying for a Quant master and i've been binge watching your videos and they help me a ton! But i am also considering about Quantitative Management as I love business strategy and managing as well. Do you have any ideas about what Quantitative Management do and its career path? is it like Quantitative MBA? Thanks!
I'm not too familiar with it but from looking online it looks similar to business analytics or operations research.
Thanks for the Video mate, wondering Do u think it’s redundant to pursuit both the ms finance and cfa charter ?
Nope. The CFA is almost always required to work with investments regardless of your education.
Is that only in Us? How about Australia ? Thanks
Dimitri Bianco thanks for answering my qs, the reason I am asking is I’ve done my ms finance 2 years degree and that also ba fs, when I enrolled in CFA Level 1 I find it pretty much similar with my previous degree, based on ur answer what’s the point to pursuit master degree if employers only look at cfa? Much appreciated
The CFA is required as it guarantees everyone has the same understanding to start with. For traditional finance you don't need a masters but you should get an MBA for the networking contacts.
Traditional finance is the same everywhere but the US always has the highest standards due to our regulations.
CQF x Quant Master or ARPM x Quant Master?
Hi Dimitri! I know this doesnt have much to do with your video which I have a lot but hey maybe you can still help me. I am currently trying to decide between 2 schools for my bachelor studies in business mathematics (I want to specialise in stochastics and mathematical finance and do a masters in quantitative/mathematical finance, financial engineering or whichever way you want to call it). One school seems to be more business oriented with a distribution of about 60% math and 40% business and some programming/cs courses whereas the other one is a technical university with more than 80% math. I dont really want to become a diehard mathematician because I am also interested in the business side of things and the application of the theory behind mathematical finance. I dont really know yet if I want to work in risk, trading, structuring or quantitative asset management yet (altough i think from the outside quant. asset management seems to be the most appealing to me). The more business oriented school has more to offer in terms of finance clubs, workshops, recruiting events, company presentations and partner universities. It is also a really famous uni in the finance world in my country and many students who go there are drawn towards these jobs. The other school is in general much more geared towards engineers (mechanical, electrical engineers, computer scientists) and technical topics which I am not really that interested in. The students also dont seem to care about the aforementioned things like internships as much. However this school offers more specializations (how relevant is this for a bachelors?) and seems to be more mathematically rigorous (-not saying the course at the other uni isnt- I know this is probably a good thing for quant roles but of course it also means the degree is harder and it will be more difficult to score good grades).
The degree from the business oriented school is offered by the faculty of business mathematics and the other one by the faculty of mathematics.
To be honest the first school is kind of my favourite due to the many things the uni offers around the programme and its good brand in the financial industry, but I have a slight concern that it doesnt go deep enough in some areas like stats or cs, altough it covers most important topics (i suppose i can dive in deeper in the masters degree; also i spoke to students of this degree and they told me that the abilities that they acquired would be sufficient for 90% of the jobs - i suppose the other 10% of the jobs is just pure diehard math which i dont want to do anyway).
Which uni would you recommend?
Also I wanted to ask you what would be the difference between a course in mathematical finance offered by the faculty of mathematics and a course in derivatives by the business faculty? I think you made an example with the black scholes formula in a math class and in a business class. So basically the math class would give me the theoretical and mathematical background which I need to model derivatives and the business class would teach me how to use them? Depending on the role I want to fulfill one is more important than the other, but in any case it would be helpful to know both sides of the coin, right?
Thanks, big fan of your videos
Thanks for watching my videos!
I'm glad you are putting a lot of thought into the question as it will make a difference later down the road for you.
Almost all business programs are focused on very light math and usually gloss over the important aspects of financial engineering (I'm yet to find one that has good rigor). But that being said the real question is what do you want to do, and I think you've already answered that question. It sounds like you want to do more financial analytics (asset management). Asset management and general financial analytics will want business students who are quantitative in a business sense. The networking and school reputation are far more important in this traditional finance area than the quantitative side. Every finance person claims to be very quantitative however this term is very relative.
On top of the undergrad degree you need to think about whether you want to do a masters (or Phd) degree or not however I feel it is almost required these days. If you want to get a real financial engineering degree than you should get a heavy math degree over a business focused program. The real financial engineering programs usually only accept math, engineering, and science students. The financial concept can be taught in one class and other details picked up on the job.
As for business derivatives vs financial engineering derivatives, there is a HUGE difference. Business programs will take an entire semester to explain what futures, fowards, real options, and options are. You will get the Black-Scholes formula and put it into Excel. You will learn how corporations and traders use them in an unrealistic way. Financial engineering on the other hand will take multiple classes on the math and theory behind the Black-Scholes as well as other derivative models which all have similar theories. This is important because anyone who actually uses derivatives (maybe besides corporations) won't just use the Black-Scholes model. Trading companies for example will modify the equation to get a more accurate price. The issue with getting a more accurate price is that it is more complex and can take longer to calculate. Why is this important? Because in the real world market making is done by high frequency trading where the fastest make money.
I digress but I think the question is how quantitative do you want to be? If you don't enjoy spending hours writing out math and looking at theory than you would be better off in the quantitative business program. I even considered going into the financial analytics(business) side as I have a finance undergrad. Many of my friends work in this area and love it but the deeper I got into financial engineering I knew I would be happier doing math, statistics, and computer science than working in Excel.
Where are more job opportunities in traditional finance or quant? Can anybody help?
Traditional finance has more opportunities because it's more general.
What do you think about the CQF ?
I have a CFA, but don’t have a masters. Will it help to get a CQF if I want to move to a Qunat Finance role?
If i can give my feedback this video is spot on. I have a masters in finance (traditional you can say) and sat the lvl 1 CFA recently. I am also working in asset servicing and studying the CFA helped develop my general finance culture and knowledge so I could hold conversations with my senior colleagues and understand the business better. I do find quant finance really interesting but it is way more math focused than the CFA.
I am pretty much in same situation as you but I am in Australia , do u think it’s gonna be redundant to pursuit both the ms finance and CFA charter?
@@easonwang3275 i would say it depends. The added value of doing an ms in finance is the chance to work on case studies in depth with professors, have access to the uni's network and an official degree. This is from a French point of view though as degrees are the key most of the time to get an interview.
Eric Monin I’ve done my ms finance already at Melbourne business school. And the hand book said at least 70% of the cfa knowledge was covered by my degree , so I wouldn’t expect learning something totally different from cfa. But in terms of job seeking, do u think ms finance and cfa valued by employers differently or are they pretty much the same?
@@easonwang3275 MS in a quant based degree is far more advanced than CFA
CFA plus Masters in Quant ? Great idea?
For the buy side it's a good idea.
CFA is far easier compared to a Quant Masters like Masters in Financial Maths - I have both. CFA has just a lot of accounting material and is broad without going into much detail. To be honest was a waste of my time taking CFA
I agree! Thanks for the perspective.
But a CFA is required for so many jobs that make 300k+
What your goals?
I don't think that it was a waste of time.
You now know how companies function internally (financially!) and it will only make you a better analyst.
But I guess it all depends on the field you want to work in.
I envy your brain lol what do you do for fun? Are you still in Finance?
You look like the guy from Set it up man
In which of the two does Financial Modeling fit?
The term is almost always used for CFA style of work.
Thank you Dimitri
Can a financial engineer applied CFA in his job?
Yes. The CFA provides a good foundation on how companies function financially (corporate finance and accounting). It also provides you with a better understanding of how traditional finance would value assets which can improve quant theories as well.
What do you think of CQF?
Do you think it's good for someone who doesn't qualify for MFE?
It depends on what your goals are and what country you want to work in. In can add value if you want to live and work in a country without quant finance masters. It is fairly expensive though. If you want to work in the US...there are very few firms that would consider it the same as a masters.
@@DimitriBianco Understood. Thank you.
The Kac in Feynman-Kac is pronounced Katz, not Kack.
hi dimitri
i really like the way you explain things, i am from india, and your videos are always on the top of my playlist whenever i want to gain some insights into these domains. A huge fan of your videos, kindly do make more such videos and with such contents....
Thanks for the feedback!
Can you please make a video about how quants are being paid and are in demand in US vs UK and European union?
I want to see a comparison of present opportunities in these places. Also, how is the scope for quants at Singapore and Hong Kong?
@@ayushbanerjee4442 I'll consider making a video on this however it gets fairly complicated. The US pays differently than Europe due to the different types of governments and taxes. In general the US pays more and has a lot mote quant jobs compared to anywhere else.
Thnx a lot
@@DimitriBianco would be a great topic to cover!
First!
Video is good. Only problem I encountered was the typical hardcore American accent at a non-stop high speed.
Dear Dimitry, (something outside the box)
You don't have Christ in you, do you?