Africa’s demand for chartered financial analysts on the rise

Rising demand for talent in Africa’s capital markets is pushing students to pursue the Chartered Financial Analyst (CFA) qualification.

The number of students enrolled for the June CFA exams in Africa increased 13 per cent to 4,275 from 3,776 last year.

In Kenya the sector has created demand for market researchers, analysts and investment bankers sparking talent wars.

The wars are bound to become more pronounced as large firms such as Old Mutual have recently acquired seats on the Nairobi Stock Exchange.

As a result, individuals working in the investment sector are positioning themselves for opportunities by enrolling for CFA qualifications.

“Overall, African interest in the CFA programme is growing” said Steve Wellard, a representative of the CFA Institute in London.

He said 427 Kenyans had enrolled for the exams.

CFA certificate holders are employed by investment companies, mutual funds, brokers, and investment banks as portfolio managers, research analysts, consultants, risk managers, financial advisors, financial analysts and investment bank analysts.

But even as demand for the course rises, less than half of the candidates who sit for the exams pass.

Announcing this year’s Level III results, the CFA Institute said that 42 per cent of the 111,731 candidates worldwide passed this year’s exams.

“While pass rates in the last decade are lower, there is a much larger pool of candidates pursuing the designation and today’s capital markets are more complex,” said Tom Robinson, a certificate holder and managing director of education at the CFA Institute.

High level

“Investment professionals need a high level of proficiency to practice in today’s environment, and this is reflected in the rigorous standard-setting process,” he added.

The organisation, which governs investment professionals around the world, said that Levels I, II and III global pass rates were 42, 39 and 46 per cent respectively.

The institute also said that enrolment worldwide went up 11 and 10 per cent for Levels II and III respectively.

In Kenya, 140 and 23 candidates enrolled for Levels II and III, up from 74 and 17 last year respectively.

Though the institute limits information on pass rates by region and country, it said that 1,533 candidates from South Africa passed various exams this year, up from 1,318 last year.

“The programme is very demanding, it has a wide curriculum that requires a lot of sacrifice,” said Peter Wachira, a CFA certificate holder and senior investment manager at Pine Bridge East Africa Limited.

The exam is rigorous with candidates having to study for as many as nine topics and failing one level means waiting till the following year for Levels II and III.

To enroll for the programme, candidates must be either university graduates or people who have worked for up to five years in the financial field.

The CFA Institute recommends that one has to read for a minimum of 200 to 300 hours to master the material.

Then there is the financial side to it. Level I costs between $1,020 and $1,040, with Level II and III fees ranging between $600 and $900. Other costs relate to reading materials.

Rising incomes

Denis Imonje, who passed Level III exams, told Business Daily: “There is a market for CFA certificate holders as incomes are rising and the industry becomes more sophisticated. The exams expose you to ethics which is key in business as we recently saw with the global financial crisis.” Mr Imonje added: “You also get to see how derivatives work and the curriculum is relevant in that it tends to evolve with current issues.”

Amish Gupta, a director at Standard Investment Bank, said CFA certificate holders will in future be in high demand.

Opportunities for CFA graduates are also available in private equity, real estate, and education fields.

But graduates from the school said there were no shortcuts, adding that consistent reading and sitting for exams, repeatedly in case of failure, were the only routes to success.

Some certificate holders include Centum Investment Company MD James Mworia, and Nairobi Stock Exchange chief executive Peter Mwangi.

The CFA Institute expects that majority of the 9,880 candidates who passed Level III exams will become “charter holders” later this year if they have the required work experience.