13 Apr 2016
There was a time when a university degree was a golden ticket into the job market, a point of differentiation that would set you apart from your peers. But as the proportion of Australians completing tertiary study continues its march upwards, the post-graduate degree of today is becoming the bachelor’s degree of our parent’s generation. In itself this is not a bad thing, the Australian economy is becoming more sophisticated and school leavers are increasingly recognising that the best jobs in a skills-based economy do indeed go to those with skills. The trend of up-skilling isn’t confined to school leavers and university students. Within the finance industry, there has been a noticeable increase in employees pursuing professional designations such as the Chartered Financial Analyst program (CFA), the Chartered Alternative Investment Analyst program (CAIA) or the Institute of Chartered Accountants program (CA) to name a few. So what’s driving the increased demand for these programs & how relevant is a professional designation as careers become less linear?
Global Financial Crisis
Many young professionals of today were either studying, job seeking or starting their careers as the GFC took its toll on the global economy. I can personally attest that as a final year Bachelor of Economics student applying for graduate finance positions in mid-2008, it was very challenging environment. This cohort of graduates clearly remembers the struggles of breaking into the job market, so it’s not a surprise to see this same cohort recognising the importance of continuing education as a means of differentiating themselves in the workplace.
When you break it down, the cost of professional designations is fairly minimal when compared to school or university. The CFA program for example has three levels, each of which would set you back less than $2,500 including textbooks. Furthermore, many employers offer to subsidise or completely cover these expenses where the qualification has direct relevance to an employee’s role, which may entitle the employer to claim a corresponding tax deduction. As such, the most significant ‘cost’ facing prospective employees looking to enhance their qualifications is time – the CFA Institute recommends a minimum of 300 hours per level, which means sacrificing much of one’s free time outside of work for 3-6 months at a time.
It’s easy to get caught up in the day-to-day targets and objectives in the workplace, so undertaking a professional designation presents an excellent opportunity to brush up on knowledge and broaden your skill set. The process of completing one of these programs can help ensure that your skills are on par with the best of the industry.
One of the most valuable outcomes of completing a professional designation is the signalling impact it has on your current and future employers. It demonstrates to your current employer that you’re committed to your chosen career path and allows an employer to demonstrate to clients that their employees are suitably qualified and have achieved a certain level of knowledge. Importantly, the global standardisation of these designations demonstrates to prospective employers that you have a base level of knowledge, which is particularly important for those wishing to work overseas, where familiarity with Australian universities may be lower.
While some may question the ongoing value of professional designations in an age where careers are becoming less linear, I would argue that an increase in career changes will only boost the demand for professional designations. I regularly hear stories of candidates undertaking the CFA or CAIA with the primary goal of moving between different sectors of the finance industry.
There has been a significant growth in finance professionals undertaking professional designations in recent years. As employees strive to broaden and deepen their skill set and demonstrate their commitment to employers and clients, I suspect that completing a professional designation will continue its evolution from being the exception to the norm.
Marcus Clitheroe (Linkedin) is a Senior Associate at PIMCO, an avid skier and is passionate about fintech.
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