I read a Bloomberg article over the weekend that asserted that the CFA program is pretty worthless. I thought I’d add my take.

I entered the financial world in late 1978, as a trainee securities analyst. This was mostly because I needed a job and had had three serious black marks on my resume: I had been a soldier in the Vietnam War, I had studied philosophy in school and I was over thirty. But, as they say, Wall Street takes everyone.

After a short while I realized I liked the work and thought I could be good at it. I started an MBA in finance at night at NYU and at the same time began to prepare for the CFA exams. I did the first to get the accounting and economics background I needed to be an insightful analyst. I did the second as proof that my suspect background shouldn’t be fully taken against me.

Unlike today, at that time, the CFA program was only open to people actively working in the boiler room of the investment industry, either as analysts studying specific industries and companies and creating detailed spreadsheets projecting potential future earnings, or as portfolio managers (almost always former analysts) shaping packages of securities intended to generate better returns than a specified target index.

The CFA Institute and affiliated organizations focused mostly on the needs of analysts and PMs, generating papers, for example, that discussed the ins and outs of accounting for oil and gas leases or how to detect the scammy ways that 1970-80s-era tech firms artificially pumped up their earnings (and the accounting standards put in place to combat that).

Somewhere along the way, that all changed. Perhaps because practitioners (as the academics call us) weren’t paying enough attention, control of the CFAI shifted away from financial analysts to academics. Several changes resulted:

–the useful industry-specific information disappeared

–university professors with no practical knowledge or experience became board members and/or featured authors in the CFA publications

–dues went up a lot, as did the fees for taking the exams

–membership was widened to also include virtually anyone involved in marketing or administration of investment products.

As an analyst, I have to conclude that this was a brilliant move, akin to the new-management remake of a classic underachieving “value” stock. Tons more money for a watered-down product. As a former user of CFA services, I’m tempted to say this is like anti-vaxxers taking over the AMA. But that’s not right. Academic finance is crazy and irrelevant, not crazy and harmful.

My conclusion: for someone with no background in the industry, this is a good first step, like a set of online tutorials in pottery-making. Is it as useful for would-be investors as an MBA? No way, provided your school has a concentration in investments and lots of accounting and economics courses.

Me? I received my both CFA charter and my MBA in Finance (concentration in Investments) three years after I started in 1979.

Am I still an MBA? yes.

Am I still a CFA? I think I am. Unlike any institute of higher learning I’ve ever heard of, however, the CFAI requires that I pay it $275 a year to say that I am. In some sense, this is a brilliant stroke. At the same time, its scamminess says a lot about the current organization.