If you are looking to begin your foray into finance, or if you’re already knee deep in it, financial certifications can increase your employability, broaden your knowledge, hone your skills and improve your salary. Choosing the right certification can be quite tricky, as the cost for attaining these designations go well into the thousands, in addition to annual membership fees. Not all certifications carry the same value, and some of them are geared towards specific sub-industries in finance.
Analyst VS Accountant
There are two broad classifications of financial certifications that cater to the two of the most prominent careers in the financial industry – analysts and accountants. The role of an analyst would include investing, financial planning and portfolio management. On the other hand, the role of an accountant encompasses tax planning, compliance, auditing and bookkeeping. While there may be some overlap between the content of the courses, the general consensus is that the certifications that fall under these two categories are exclusive to their respective trades.
If you’re currently or aspiring to be an analyst, getting an accounting-related certification like the Chartered Public Accountant (CPA) wouldn’t be the best use of your resources. While it would be great for your personal development, it would do little for your career advancement. The same would go for accountants who choose to sit through the Chartered Financial Analyst (CFA) certification.
Between these two categories, the CFA and CPA designations are generally considered to be the gold standards for analysts and accountants respectively. Both courses have strict requirements and academically challenging exams. Here’s a brief rundown of these two highly coveted certifications.
Chartered Financial Analyst
The oldest and most prestigious certification for analysts, the CFA holders are deemed to be adept at portfolio management, investment analysis and institutional money management. It covers a wide range of academia as compared to other analyst-related certifications. This designation is most applicable to analysts, asset managers, fund managers and portfolio managers. The salary range you can expect for CFA-holders lies within S$50,000 to S$170,000.
- A bachelor’s degree or equivalent education/work experience.
- A passing score for the CFA Level I Exam or the self-administered Standards of Practice Examination.
- 4 years of professional work experience in investment decision-making.
- 3 professional references.
- Approximately S$3,700 for course and examination fees.
Chartered Public Accountant
Unlike the CFA, the CPA is not the clear winner in terms of certifications for accountants. The Chartered Management Accountant (CMA) is the other contender for the most desirable certification for accountants. What puts the CPA in the same category as the CFA is the breadth of topics covered, which covers auditing, taxation, business laws and ethics, strategic planning, economics, statistics and international accounting systems. In comparison, the CMA is more focused towards corporate accounting. This designation is most applicable to Chief Financial Officers, auditors and financial administrative personnel. The salary range you can expect for CPA-holders lies within S$50,000 to S$160,000. In Singapore, there is a separate designation issues by the Singapore Accountancy Commission – Chartered Accountant (Singapore).
- An accredited accountancy degree with a five-year validity period commencing from the date of conferment.
- Applicants with an accredited degree that exceeds the five-year validity period may have their working experience considered for direction admission into the Singapore CA Qualification on a case-by-case basis.
- An accredited degree or non-accredited degree that is recognised by the SAC as at least comparable to a three-year undergraduate degree using internationally recognised reference sources and complete the Singapore CA Qualification (Foundation).
- Employed with an Accredited Training Organisation (ATO) which issues a Training Agreement and assigns an Approved Mentor to their Candidates.
- Approximately S$3,600 for course and examination fees
On top of the two certifications mentioned (three including the CMA), there is a vast number of other certifications that are more specialised for specific professions in the financial industry. Many of them will have overlapping course content, and may be completely irrelevant to your career path. Here are some of the specialist certifications.
Certifications for analysts
- Certified Financial Planner (CFP) – covers more strategy-based skills than the CFA like estate planning, insurance, taxes, etc. The exams are considered easier than most certifications.
- Financial Risk Management (FRM) – covers risk analysis and management which is ideal for those looking for a career in financial advisory and risk management.
- Chartered Alternative Investment Analyst (CAIA) – similar to CFA with a focus on alternative investments such as hedge funds, and equity funds.
Certifications for accountants
- Chartered Management Accountant (CMA) – certifies expertise in financial analysis, budgeting and strategic assessment skewed towards corporate finance.
- Chartered Global Management Accountant (CGMA) – an internationally recognised designation that connects its holders to a global network of accountants
- Certified Internal Auditor (CIA) – the only international designation for certified auditors that covers information technology, governance and risk control.
Adding a few extra letters to your namecard lends extra credibility to your skills as a finance professional. However, don’t be duped into a never-ending paper chase for certifications. Paper qualifications are useful, but nothing beats good old work experience. This is especially true for current and potential analysts. Instead of spending your time reading textbooks and sitting for tests, go out and start working for a financial institution. Or better yet, if you have the funds, start building your own investment portfolio!