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Thread: CSC vs. CFP vs CFA

  1. #1
    Senior Member MoneyGal's Avatar
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    CSC vs. CFP vs CFA

    Oh dear. The Chum Bucket is a fictional restaurant owned by Sheldon Plankton, and located across the street from the much more successful Krusty Krab, owned by Eugene Krab. All on the Spongebob Squarepants show (I have two little kids, have I mentioned that? ) And...Spongebob lives in a pineapple under the sea!

    Back to Sponge_1. You know, if you want to learn about investing, I recommend you take the courses from the Canadian Securities Institute. The only problem is that they are ridiculously expensive. The financial planning courses which lead to the CFP exam are also another interesting thought. There are many course providers and these, too, are also expensive.

    But here's my rationale: which may not apply to Sponge, but could possibly apply to other posters. If you take the CSC or the CFP coursework, you might be out $1000 or even more. But amortized over your investing lifetime, that $1000 might actually be well-spent.

    Anyways. I am writing quickly and over my lunch break, and this isn't my most thoughtful post. But I do sort of wonder whether taking the CSC courses might be of interest to other people here. (Disclaimer: I hold the CFP certification and I am a former investment advisor, formerly working on the IDA [now IIROC] platform; i.e., not mutual funds only.)


  2. #2
    Administrator FrugalTrader's Avatar
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    MoneyGal, that's an interesting thought. I did the CSC as more of a hobby project, but I'm wondering, how much more challenging is obtaining the CFP?
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  3. #3
    Senior Member MoneyGal's Avatar
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    I'd say the CFP = 5 CSCs. Why? Because the CSC has a much, much narrower focus. The CFP requires competency in wide range of financial planning topics, beyond investing and "know your client," and including estate planning, family law, tax planning, and risk management (i.e., insurance) topics.

    Plus the CFP exam is related to as brutally hard. (And it is about to get harder: I'm on the item writing committee preparing questions for this year's candidates!)

    Fewer than half the people who sit the exam pass it, and the pass rate goes down, not up, with subsequent tries. The November 2009 pass rate was the highest it's been in years, at 44.7% (ouch!). (First-time writers did better, at just over 50%, in November.)

    IMO, it's a completely different thing passing two one-hour, multiple choice exams separated by time (the CSC exam) versus a six-hour, one-time, integrated exam, half of which is case studies (still multiple choice, though!).

  4. #4
    Administrator FrugalTrader's Avatar
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    Wow, thanks for the explanation. I had no idea that obtaining a CFP would be so challenging. What is the greatest value of obtaining the CFP? Greater industry recognition?

    Any idea how obtaining a CFP compares to obtaining a CFA?
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  5. #5
    Senior Member MoneyGal's Avatar
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    We could start a whole separate thread on this.

    From my POV, I am interested in financial planning *in addition to* investing - and the CSC is not a financial planning course of study or designation. You could almost think about the CSC as your "union card" for selling investment products.

    I had my own reasons for obtaining the CFP. I am not now working as an advisor, but I still work in the field of personal finance. The CFP is *the* designation of choice for me - a CSC would be of no use to me in my current role...it is not a professional designation, it is a licensing requirement. So when I left the advisor world, I let my CSC licence expire.

    As for the CFA: this is a quant designation. If you wanted to be a back-office staff member in an investment shop, you'd need this. For front-office (i.e., client-facing), you need the CSC (for your license). The CFP is the next designation in the stream for client-facing work.

    If you wanted to do more quant (back-office) work, you could also do a Masters of Finance. It's a toss-up to me whether one is preferable to the other...you could think about the CFA as a "professional" (or "hands-on") designation and the Masters of Finance as an "academic" (more "hands-off") designation.

    These are all generalizations and broadly speaking they apply to higher-end situations in which you are managing relatively serious piles of money. There are lots of people using the title "financial advisor" or "financial planner" who don't even have the CSC license, let alone the CFP or the CFA.

  6. #6
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    Quote Originally Posted by FrugalTrader View Post
    Wow, thanks for the explanation. I had no idea that obtaining a CFP would be so challenging. What is the greatest value of obtaining the CFP? Greater industry recognition?

    Any idea how obtaining a CFP compares to obtaining a CFA?
    Not sure if I'm adding or subtracting from what MoneyGal has said but my take on the CFA and CFP is that the CFP is exactly what the title says - financial planning. Budgets, investments, taxes etc - all the personal finance kind of stuff. Best suited for a...financial planner type who meets with people and helps them work on their finances.

    The CFA is far more hard-core investment oriented with lots of focus on investment theory (ie efficient market models etc), technical investment stuff like bond pricing, option pricing etc. It's better suited for someone who is exclusively doing some sort of serious investment work ie research analyst, portfolio manager etc.

    I found the CFA to be very interesting (I passed level I and took level 2 but didn't write the exam for level II when my career changed). I haven't taken any of the CFP although I'm somewhat familiar with the material. I took the CSC.

    I'm not really sure how useful either designation is unless you can apply it to your work. For an individual who just wants to improve their own knowledge I would suggest finding out the course material of a relevant course and just do the reading yourself.
    Mike Holman
    Money Smarts Blog Investing and Personal Finance

  7. #7
    Senior Member MoneyGal's Avatar
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    FP: you are adding.

    I happen to work with derivatives and options now (at a theoretical level) and believe me, none of that was covered either in the CSC or the CFP except at the most basic level (i.e., one or two paragraphs on how puts and calls work, so you can memorize the definition and spit it out in an exam question. Mos def no requirement to calculate the value of a put option or to decompose a financially-engineered product to find the embedded puts and calls that make it work...)

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    Administrator FrugalTrader's Avatar
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    CSC vs. CFP vs CFA

    Cleaner to have a separate thread discussing the issues of the differences between CSC, CFP and CFA.
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  9. #9
    Administrator FrugalTrader's Avatar
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    FP, how was the first level of CFA? Was it a killer exam like the CFP?
    Million Dollar Journey - Follow my journey to one million in net worth..

  10. #10
    Senior Member Spidey's Avatar
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    I've taken, and passed the CSC about 10 years ago (was considering a career change at the time). Even though I'm the kind of guy who is constantly reading about investing, I found the course to be extremely dry (possibly not appropriate for the casual investor).

    Last edited by Spidey; 2010-03-23 at 02:21 PM.

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