Engineering into CFA

[dandia89]

Wondering what everyone's thoughts on the ability to transition into a financial industry from an engineering background. I have little experience in the financial sector, but seeing how engineering jobs are slim to none, I was considering moving into the finance sector.

With little to no background in finance, but a strong interest in personal investment and budgeting, I want to explore the possibility moving over.

Any engineers out there who moved over? Would a CFA help?

[Super_Geo]

Networking is key. The CFA definitely helps. The engineering to equity research or A&D path is well trodden.

[The_Rural_Juror]

Personal investment and budgeting = CFP.
Investment analysis = CFA

[Buster]

I think it's a good idea. Can probably knock it off over a long weekend.

[TYMSMNY]

what kind of eng are you? with what area of expertise? it could give you an edge.

budgeting and personal finance.... sounds more retail so a CFA won't give you much on that end.

[jwslam]

Originally posted by Buster
I think it's a good idea. Can probably knock it off over a long weekend.
:nut: :nut: :nut: :rofl: :rofl: :rofl:
Doubtful even if you graduated with honours in Finance, let alone most eng having no idea what debits/credits mean and how they fit into statements.

[bjstare]

Originally posted by jwslam

:nut: :nut: :nut: :rofl: :rofl: :rofl:
let alone most eng having no idea what debits/credits mean and how they fit into statements.

I graduated from engineering, with a minor in business. Not sure what engineers you've talked to, but contrary to yours, my experience was the finance and accounting courses we took were significantly tougher on the actual business students in our classes than they were for us silly engineers. My semester of 6 business courses was the only semester I ever got straight A's :rofl:


OP, start networking now, and that will help you decide if/what to go to school for.

[ickyflex]

Regardless of the choice i'd say do a CFA level one as it will challenge you in new ways and you'll learn a lot of good basic information that you'll likely not ever go out and read about in your spare time.

Best way to learn sometimes is to be forced to

[killramos]

I think if you want to make a transition into finance you need to be leaning on your engineering experience pretty heavily for the first little while to get your foot in the door. A&D, evaluations etc. to start with. Can branch out once you are established and learn the business. Otherwise you might as well be starting at ground zero as an into analyst and can throw your engineering degree and experience down the drain.

I say get started and do level 1 ( I know a guy who did all 3 levels without a university education, its doable though maybe a bit more than a weekend of studying. Keep in mind that failure rate for CFA exams is VERY high for a reason. ) and start trying to talk to people in that area of the business and ask THEM what they want to see out of your for qualifications. Then when you come to them prepared and with the right background they can see you are serious. Fitting in is a huge part of those kinds of roles from what I hear due to the sheer amount of time you spend with your coworkers.

Other option is MBA if you want to spend the $$$ and dedicate 1-3 years of your free time to making this transition.

[Buster]

For some reason, the CFA has gained a reputation as a "door opener". It's not really what it is meant to do. The CFA is a designation for people who have or are pursuing a finance career in a much narrower range than is appreciated. Outside of that, it's utility is limited, and the information isn't really "skill" based as much as just a ton of stuff you need to know.

Also, a CFA requires relevant work experience, and often benefits people who are on a particular career path and are being sponsored to do it. In short, the CFA is meant for people who are already dedicated and on a career path to be a portfolio manager, or otherwise involved in investment decisions on an institutional level. It's utility beyond that, while not absent, drops off significantly.

Also, saying "finance industry" is a bit general. Is a retail teller at a bank in "finance"? Do you want to work in the capital markets? In commercial banking? Corporate banking? Do you want to be in accounting or work for the valuations department of KPMG/MNP/EY etc?

If personal investing is your thing, do you want to go get your CSC or go work for a wealth management/ wealth advisory?

This whole CFA thing is so tired.

[Illusive 4-2]

As small as the O&G industry is here, investment banking is even smaller. Like others have said, continue to network as that is really your best shot at making the transition; more often than not someone knows somebody that knows you who will help you connect or may be a resource for an arms length reference in the future.

Try to grab a coffee or beer with individuals from all facets of the industry to get their take on what they do and whether or not it interests you. Every group operates differently and one might be more appealing than another; most are collaborative, but like E&P's, some operate different than others (i.e. big banks vs. boutiques).

A CFA would help if you are looking to get into certain parts of the business like Investment Banking; it would have less value in A&D based on my personal experience. With an engineering background, you'll likely have a better chance landing in Research or A&D like Super_Geo noted above.

If you are considering Research or A&D to leverage your engineering background, some considerations are what industry/part of the industry you have experience in (i.e. in O&G, were you working upstream, midstream, downstream?), which company(ies) you've worked for (small, mid or large cap?) and what experience you have acquired to date.

[Buster]

Originally posted by Illusive 4-2
As small as the O&G industry is here, investment banking is even smaller. Like others have said, continue to network as that is really your best shot at making the transition; more often than not someone knows somebody that knows you who will help you connect or may be a resource for an arms length reference in the future.

Try to grab a coffee or beer with individuals from all facets of the industry to get their take on what they do and whether or not it interests you. Every group operates differently and one might be more appealing than another; most are collaborative, but like E&P's, some operate different than others (i.e. big banks vs. boutiques).

A CFA would help if you are looking to get into certain parts of the business like Investment Banking; it would have less value in A&D based on my personal experience. With an engineering background, you'll likely have a better chance landing in Research or A&D like Super_Geo noted above.

If you are considering Research or A&D to leverage your engineering background, some considerations are what industry/part of the industry you have experience in (i.e. in O&G, were you working upstream, midstream, downstream?), which company(ies) you've worked for (small, mid or large cap?) and what experience you have acquired to date.

The CFA is not particularly useful or encouraged in the ibanking world.

[Illusive 4-2]

Originally posted by Buster


The CFA is not particularly useful or encouraged in the ibanking world.

Agree, but based on the O/P's background as an engineer, it would at least help show some sort of interest in this industry if they were to complete CFA level 1 and show that they are willing to put in the time and effort to work through it.

After that, from what I've been told by colleagues, finishing levels 2 and 3 are geared more towards portfolio management and research positions. A couple of guys I work(ed) with in iBanking have their CFA designations, but most do not.

[Buster]

Originally posted by Illusive 4-2


Agree, but based on the O/P's background as an engineer, it would at least help show some sort of interest in this industry if they were to complete CFA level 1 and show that they are willing to put in the time and effort to work through it.

After that, from what I've been told by colleagues, finishing levels 2 and 3 are geared more towards portfolio management and research positions. A couple of guys I work(ed) with in iBanking have their CFA designations, but most do not.

I don't disagree. But banking and the interesting areas of "finance" are, in my opinion, the ones where you have to demonstrate a couple of critical skills: a) an overwhelming desire to generate profits (which I think is different from most engineering careers), and b) the ability and desire to sell/communicate/manipulate. There are areas where highly technical activities can also be interesting and profitable, but they are more niche.

While the CFA shows you can pound out the hours on some books, it doesn't necessarily demonstrate the things that people are interested in within financial services.

Honestly if you spent the 1000 hours or so networking, instead of worming through some chapter on derivatives, you will probably be better off - while ALSO demonstrating the type of skill that actually is useful in most of the finance world. Again, it depends on your goals, and what type of work you want to do.

[Illusive 4-2]

Originally posted by Buster


I don't disagree. But banking and the interesting areas of "finance" are, in my opinion, the ones where you have to demonstrate a couple of critical skills: a) an overwhelming desire to generate profits (which I think is different from most engineering careers), and b) the ability and desire to sell/communicate/manipulate. There are areas where highly technical activities can also be interesting and profitable, but they are more niche.

While the CFA shows you can pound out the hours on some books, it doesn't necessarily demonstrate the things that people are interested in within financial services.

Honestly if you spent the 1000 hours or so networking, instead of worming through some chapter on derivatives, you will probably be better off - while ALSO demonstrating the type of skill that actually is useful in most of the finance world. Again, it depends on your goals, and what type of work you want to do.

Yep, that sums it up quite well. You're right, most engineering careers aren't profit oriented, highlighting how critical it is to have the right experience to be able to make that kind of transition. b) is probably the biggest hurdle for most engineers and you're on point, it's a very niche skill set for engineers.

The time spent on the CFA is more of a proof of concept that you're willing to put in the time which is usually a big change/challenge from an engineering job. It's not a normal 8-5 job anymore that most engineers are used to as you'd be required to spend most evenings and weekends in the office to push through modeling, etc. for presentations and projects for the first couple of years; I don't see many engineers making that transition comfortably, especially those with kids or other family situations. Most of the analysts I work with are younger and can push through this part of their career while they're young, then move up to Associate/VP roles where they aren't staying till midnight on weekdays. As most engineers have time invested already into their career, they're unfortunately going to face some additional hurdles than those who have chosen this career path early on.

Like Buster said, I think this is most critical at this point in your consideration: "Again, it depends on your goals, and what type of work you want to do."

[The_Rural_Juror]

Originally posted by killramos


I say get started and do level 1 ( I know a guy who did all 3 levels without a university education, its doable though maybe a bit more than a weekend of studying.

Who is this? Unheard-of unless this person has a lot of work experience.

[Pacman]

My wife went down this path. Electrical engineer for 8 years and then did the 3 levels of the CFA. Now she's in the M&A group at one of the big E&P companies.

[killramos]

Originally posted by The_Rural_Juror


Who is this? Unheard-of unless this person has a lot of work experience.

You want his name? :rofl:

He works in our finance department, crazy smart dude.

He definitely has all three levels, and he definitely doesn't have a bachelors degree. Not sure entirely what his background is before here but hes ~30?

:dunno:

[argent]

If memory serves me right, when I took the exam before, they required you to have an undergrad degree or equivalent, or at least close to finish it... unless they changed the rules recently, or they have multiple different pathways to enter.


Originally posted by The_Rural_Juror


Who is this? Unheard-of unless this person has a lot of work experience.

[Buster]

The CFA institute can waive the degree requirement if you have "equivalent work experience".

[Env-Consultant]

Originally posted by killramos


You want his name? :rofl:

He works in our finance department, crazy smart dude.

He definitely has all three levels, and he definitely doesn't have a bachelors degree. Not sure entirely what his background is before here but hes ~30?

:dunno:

There's only one way to be certain he isn't pulling the wool over your eyes.... https://www.cfainstitute.org/community/membership/directory/Pages/index.aspx#section-1

You can definitely do your CFA without a degree, as per the CFA Institute's website....

To enroll in the CFA Program and register for your first Level I exam, you must have:

One of the following:

Undergraduate education: A bachelor's (or equivalent) degree or be in the final year of your bachelor's degree program (when you register for the Level II exam, you will be required to update your education information), or

Work experience: Four years of professional work experience (does not have to be investment related), or

A combination of professional work experience and education that totals at least four years (part-time positions do not qualify, and the four-year total must be accrued prior to enrollment).

[The_Rural_Juror]

To become a Charterholder: Have four years of qualified work experience in investment decision making.


At least four years (48 months) of experience in: Evaluating or applying financial, economic, and/or statistical data as part of the investment decision-making process involving securities or similar investments (e.g., publicly traded and privately placed stocks, bonds, and mortgages and their derivatives; commodity-based derivatives and mutual funds; and other investment assets, such as real estate and commodities, if these are held as part of a diversified, securities-oriented investment portfolio). Supervising, directly or indirectly, persons who practice these activities. Teaching such activities.

[The_Rural_Juror]

oops

[killramos]

^ Yup he's on there, never said i didn't believe him I was just trying to give an example to OP. Getting 4 years of experience in that doesn't seem too out there, but OP has a degree so its not really relevant.

[The BMW Guy]

I'm on a similar path. Engineer for 3 years, landed a job as a market analyst at a trade shop. Networked to get the job, no CFA.

[dandia89]

I've been working as an Mechanical EIT within the pipeline industry (O&G) for 3ish years doing Project Management and Project Estimating and I've always been more interested in the financial aspects of how a company operates rather than how a facility was built. I enjoy both, but working at a major pipeline company, the most engaging part was the energy trading aspect between different lines.

I really don't know many people with CFA. What careers do you non-engineers have?

[Marsh]

As a finance guy, I'll shed some light on this. Especially in calgary, most of the Ibanking and Equity Research, corp banking is focused on o&G. The last two years have seen ALOT of downsizing on this side (keep in mind, Ibanks here only have 7-8 people on average) and ER teams with similar numbers. The path from engineer to ER used to be a well made one, but recently given the shitty environment here, almost no finance firm or bank is adding headcount. The only postings/openings are rare, and are usually just replacing someone who has left.

Finance is one of the most difficult areas to break into in good times. Given how shitty things are in Calgary, and keep in mind finance has very lean teams to begin with (just a few people, never seen more than 10), bringing in a unknown/experienced person is a huge commitment for them.

If your serious about it, networking is key. But its a tough nut to crack, its not something your going to get your feet in a couple weeks...expect months if not up to and over a year to break in.

Not sure about energy trading, haven't kept up with that area much lately.

[dandia89]

Thanks for the responses. Maybe I romanticized the idea that I could switch over easily. Might be a passive transition until then. From the networking I've done in person, since I made this post, people have mostly said it's an uphill battle and I should just stick to engineering, which is a little frustrating.

[Marsh]

Originally posted by dandia89
Thanks for the responses. Maybe I romanticized the idea that I could switch over easily. Might be a passive transition until then. From the networking I've done in person, since I made this post, people have mostly said it's an uphill battle and I should just stick to engineering, which is a little frustrating.

It is a competitive field to get into. But if you are seriously interested in it, its definitely worth pursuing. If it was more of just "engg is flat now, look for something else" then it may not be the best way to go. Only you can decide that though.

[The_Rural_Juror]

Don't be discouraged. If you are serious and passionate about it, worry about passing the exams first. That's what stops most people.

Non-engineer here. I am a janitor who solves marth problems while engineers look down on me. :(

[BrknFngrs]

Originally posted by The_Rural_Juror
Don't be discouraged. If you are serious and passionate about it, worry about passing the exams first. That's what stops most people.

Exactly this. If you're genuinely interested in the switch, CFA is a good way to start making the transition and will be good for networking as well if you make a point of interacting with others pursuing it.

[Buster]

Originally posted by BrknFngrs


Exactly this. If you're genuinely interested in the switch, CFA is a good way to start making the transition and will be good for networking as well if you make a point of interacting with others pursuing it.

It's of limited use in these circumstances.

[dandia89]

thanks a lot everyone!:clap:

[91_Integz]

I have the CFA designation and I agree with most of the advice given already. Buster has clearly outlined the pros and cons and highlighted where the designation makes sense. If you want to get into the industry sure the CFA would help but it's likely overkill to start out with.

Getting the designation is no walk in the park so I would suggest doing research on what area of finance you want to be in before dedicating 1000+ hours of study into something that may not be necessary to get to where you'd like to be.

[91_Integz]

Originally posted by Buster
For some reason, the CFA has gained a reputation as a "door opener". It's not really what it is meant to do. The CFA is a designation for people who have or are pursuing a finance career in a much narrower range than is appreciated. Outside of that, it's utility is limited, and the information isn't really "skill" based as much as just a ton of stuff you need to know.

Also, a CFA requires relevant work experience, and often benefits people who are on a particular career path and are being sponsored to do it. In short, the CFA is meant for people who are already dedicated and on a career path to be a portfolio manager, or otherwise involved in investment decisions on an institutional level. It's utility beyond that, while not absent, drops off significantly.

Also, saying "finance industry" is a bit general. Is a retail teller at a bank in "finance"? Do you want to work in the capital markets? In commercial banking? Corporate banking? Do you want to be in accounting or work for the valuations department of KPMG/MNP/EY etc?

If personal investing is your thing, do you want to go get your CSC or go work for a wealth management/ wealth advisory?

This whole CFA thing is so tired.

This is bang on

[BrknFngrs]

Originally posted by Buster


It's of limited use in these circumstances.

Why do ya say? I used it for exactly this reason (bridging into pure finance roles from a related but not directly comparable field) and it was very helpful.

[Mogg]

I'd like to bring this thread back from the dead.

Did OP do the CFA? Did you make the transition into "finance" ?

It seems many people were against engineers doing the CFA, do you still feel this way with the current economy?

thanks!

[killramos]

I feel like it’s economy agnostic. CFA is more useful for making a transition on a new career path than opening doors in a current position.

Having 2 careers is definitely better than 1 for a shady economic future.

Biggest question to ask yourself is do you love finance? If so I’m sure you will love the CFA.

[realazy]

I’m one of those engineers who realized they love finance, I’m writing Level III next June.

[Buster]

I’m one of those engineers who realized they love finance, I’m writing Level III next June.

What career path did you take

[realazy]

What career path did you take

In upstream oil and gas engineering right now, seriously looking into a career change given the outlook. I made it through three rounds of layoffs but the future looks bleak. Really interested in wealth management as I have a friend who’s a portfolio manager who has been showing me the business.

[ExtraSlow]

In upstream oil and gas engineering right now, seriously looking into a career change given the outlook. I made it through three rounds of layoffs but the future looks bleak. Really interested in wealth management as I have a friend who’s a portfolio manager who has been showing me the business.
Somewhat related, but in the last two year, my LinkedIn has been flooded with "wealth managers" and "financial advisors". Lots of O&G folks went into this apparently. I get minimum 2 sales pitches every month.

[killramos]

In upstream oil and gas engineering right now, seriously looking into a career change given the outlook. I made it through three rounds of layoffs but the future looks bleak. Really interested in wealth management as I have a friend who’s a portfolio manager who has been showing me the business.

Is CFA the right cert for Wealth Management?

Is that that more of a CIM thing?

There are way too many certs these days I can see why the accountants amalgamated.

[Buster]

Somewhat related, but in the last two year, my LinkedIn has been flooded with "wealth managers" and "financial advisors". Lots of O&G folks went into this apparently. I get minimum 2 sales pitches every month.

Shares a lot of traits with real estate

[realazy]

Is CFA the right cert for Wealth Management?

Is that that more of a CIM thing?

There are way too many certs these days I can see why the accountants amalgamated.

The CFA is geared towards investment management, both institutional and high net worth. 40% of the Level III curriculum is portfolio management.

The CIM is a Canadian designation vs. the CFA being a globally recognized one. The CFA is generally considered to be much harder.

[ThePenIsMightier]

somewhat related, but in the last two year, my linkedin has been flooded with "wealth managers" and "financial advisors". Lots of o&g folks went into this apparently. I get minimum 2 sales pitches every month.

wfg?

[ExtraSlow]

wfg?

WFG, IG, Manulife, Edward Jones, and a couple of smaller firms. I have to assume they are shotgunning thier entire network, because anyone who follows me should know I have very little to invest.

[killramos]

The CFA is geared towards investment management, both institutional and high net worth. 40% of the Level III curriculum is portfolio management.

The CIM is a Canadian designation vs. the CFA being a globally recognized one. The CFA is generally considered to be much harder.

Cool. Good to know.

As for the career change, just know grass is not always greener especially if you intend to stay in Calgary. Our financial sector ebbs and flows with oil and gas and there is essentially nothing in the way of Capital markets business in Calgary over the past few years.

If you can completely break away from Calgary and O&G thats a different ballgame.

[realazy]

Cool. Good to know.

As for the career change, just know grass is not always greener especially if you intend to stay in Calgary. Our financial sector ebbs and flows with oil and gas and there is essentially nothing in the way of Capital markets business in Calgary over the past few years.

If you can completely break away from Calgary and O&G thats a different ballgame.

What you say about the capital markets is definitely true for Calgary on the research and sell side. Wealth management is a little more removed from oil and gas as it's more about managing the money of clients, especially wealthy people. There is still a lot of money in Calgary.

Buster is right that wealth management shares a lot or traits with real estate as it involves a lot of client relationships as well as essentially acting as the middle man for the transactions. It's getting people to trust you with their money to make decisions when they do not want to.

[The_Rural_Juror]

Somewhat related, but in the last two year, my LinkedIn has been flooded with "wealth managers" and "financial advisors". Lots of O&G folks went into this apparently. I get minimum 2 sales pitches every month.

Trust me with your money. I can manage both your alternative investments and your alternative lifestyles. Full discretion guaranteed.

[msommers]

Well that's good cuz God knows ES' hookers n' blow portfolio is a whole other "investment" with an interesting risk/reward calculation.

[ExtraSlow]

Short term gains are HUGE with my portfolio.

[birdman86]

Cool. Good to know.

As for the career change, just know grass is not always greener especially if you intend to stay in Calgary. Our financial sector ebbs and flows with oil and gas and there is essentially nothing in the way of Capital markets business in Calgary over the past few years.

If you can completely break away from Calgary and O&G thats a different ballgame.

Can confirm, I have CFA and did sellside research for a couple years before getting laid off, we just weren't making any money. We got I think one big deal per year while I was there, which doesn't go very far come bonus season. Couple that with the low salaries, sellside oil & gas is just long hours at minimum wage so if you go that route be absolutely sure you are passionate about the work, or have a solid exit plan. I always tell people - imagine a press release hits your inbox at 11pm Sunday night about some shitco that you don't even cover, are you the guy who jumps over himself to read and comprehend every word at 11:02? If you aren't, you probably won't stay in research very long. (I wasn't, and it burnt me out)

And if you want to go buyside, should also know that it'll almost certainly mean leaving Calgary. There's a few in Alberta, but they're all very small and very, very hard to get in. Everyone I know that made the change went to Vancouver or Toronto.

Saying all that, an engineer with CFA would be a strong candidate for a sellside E&P research gig.

[Buster]

What are you doing now?

[birdman86]

What are you doing now?

Farming, I’d been thinking about it for years just couldn’t get myself to walk away from salary and benefits.

[davidI]

Farming, I’d been thinking about it for years just couldn’t get myself to walk away from salary and benefits.

Awesome. I'm always envious of people who walk away from the office life (I'm planning to but haven't pulled the trigger yet).

[R-Audi]

Certainly sounds like a 'the grass is greener' type deal. I have a cousin who is at the top of a research department for a major IB bank and he is bored stiff as there is very little action or things to do. Started off as a Geologist and went back and got his MBA and CFA. Currently looking to various options to relocate. (Buy a business in the US or elsewhere)