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The CFA Charter: The gold Standard for the Finance Industry

 

It was in 1963 that the first Chartered Financial Analyst® (CFA) exams were held with the aim of creating a benchmark for professional standards and a means through which to certify and raise the standards of the finance profession. With 2016 marking the CFA’s fifty third anniversary milestone, it also presents a time to reflect on where the profession is at today and where the CFA can still take you in the future.

 

Certainly a lot has changed in the last five decades and the finance world of today is still reeling from the implications of the global financial crisis and a series of financial scandals and disasters. This situation has only served toincrease the CFA’s relevance and demand in the workplace. As businesses have been made more aware of the need to protect their images and change their corporate culture, they are looking for human resources whonot only possess first-rate skills and competence but also integrity. Signing a commitment to abide by the CFA Institute Code of Ethics and Standards of Professional Conduct is one integral part of achieving CFA status; the other parts involve passing three exams, and completing four years of work experience in the investment industry. Noting that the financial community continues to face a crisis of investor trust, John Rogers, CFA, president and CEO of CFA Institute, says, “The next generation of investment professionals is instrumental in shaping the future of finance,” and that successful CFA candidates have “the opportunity to build the kind of industry culture that puts investors first and better serves society.”

 

The new reality of the post financial crisis world is also shaping the career opportunities available to CFA charterholders. Morgan International instructor Darren Degraaf teaches materials to candidates taking the CFA exams, and he is quoted as saying that charterholders are seeing a shift in the types of roles for which they are in demand.  “Job growth for candidates or members besides other front office roles are moving to mid office roles, especially in risk management and compliance,” he says. Indeed the CFA Institute notes that there has been a “hiring spree” for these functions, which are seen as critical by firms trying to rebuild reputations and comply with regulations.

 

Another shift that Degraaf notes is the high growth of candidates in Asia Pacific, especially in China and India – where candidates from this region are closing in other 50% mark, with roughly half of those students from either India or China. The United Arab Emirates is also among the top 10 in terms of student numbers from the 39 countries worldwide where the exam was administered. This shift in origin of candidates is an indication both of Asia Pacific’s increasing importance in the international financial markets and the globalization of the industry. In total 58,677 students around the world took the Level 1 CFA exam in June 2016 and recorded a 43% pass rate.

 

In addition to contributing to the ethical standards of the financial industry, those that pass the CFA Program can feel assured that they hold a globally recognized certification capable of opening doors in what is an increasingly competitive job market.

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Why Time Value of Money is Crucial to Any Business!

 

By John Alexander Adam

Financial management is a wide ranging field of knowledge but, as with any discipline, there are some absolutely central pillars of knowledge that are applicable across the board regardless of the nature of the business you are in. The concept of the ‘Time Value of Money’, undoubtedly numbers amongst those! Its central maxim is roughly equivalent to the old idiom ‘a bird in the hand is worth two in the bush’. That is to say that money a business has in its bank account now is always of significantly more value than the equivalent sum promised or expected to be received at a future date. The theory underpins the concept of interest rates and is central to financial modelling used to assess any ‘investment’ that has an interest component, such as cash reserves, loans, mortgages or bonds.

Cash that you have today can be invested in any number of ways that can earn a return on that investment. Marketing, additional staff, stock, or dividend payments if invested on the stock market, you name it. Calculating the Time Value of Money involves looking at figures such as what you would be certain of earning as a minimum if that money was put to work over a certain period of time. An approximate example would be looking at how much money you would have to deposit now to have $100,000 in 2, 5 or 10 years if it earned a return of 7%. The difference between that future $100,000 and what you would have to deposit now is the Time Value of Money, or opportunity cost.

Certain and Uncertain Payments

When calculation the Time Value of Money there is of course a significant difference between certain and uncertain payments. If the money is invested into a government backed bond, or placed in a savings account with a bank, the promised interest would be considered to be a ‘certain payment’. If it is invested in marketing or something other higher risk investment, then the risk involved must also be factored into the formula you use to calculate the Time Value of Money.

Time Value of Money is therefore an integral part of the financial management of any business. Its principles effect decisions from investment in R&D, technology, stock or staff to allowing clients credit facilities.

If you would like to improve your understanding of business and finance, why not take a qualification such as the CFA® Program. Morgan International offers a number of different professional finance, investment and accounting qualification programs at locations across the Middle East.

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What is Inflation, How Does It Work and Why is it Important?

 

By John Alexander Adam

In the classic novel Pride and Prejudice, set in 1813, Mr. Darcy is presented as one of the richest men in England. His income, however, is only £10,000 a year. In present day England, the official poverty line for a couple with two children is set at a little over £20,000, more than twice the exorbitantly wealthy Mr Darcy’s income. Someone with the equivalent of Mr. Darcy’s socio-economic standing today would be expected to have an annual income in the hundreds of millions of pounds. Of course, in 1813 £10,000 would provide purchasing power incomparable to that of the same sum today. The reason for that is inflation.

Inflation, the rate of increase in prices for goods and services, is one of the most important influences in economics and one of any government’s primary fiscal goals is to keep inflation at a controlled level. Inflation is caused by the demand for goods and services being higher than their supply, which over time gradually pushes prices up. If inflation is too low it indicates dropping consumer demand, usually the sign of a wider economic problem, and subsequently compounds that by encouraging individuals and business postpone purchases, harming sales figures.

It also increases the burden of debt as inflation goes some way to offsetting interest rates. However, if inflation is too high it moves faster than growth in incomes and the purchasing power of companies and individuals is impaired, which also has a harmful effect on economies. This is why central banks around the world target long term average interest rates of around 2%.

How is the Inflation Rate Calculated?

Inflation rates can be calculated using different formulae but essentially look at the average price increase of a ‘basket’ of things we commonly spend money on such as fuel, staple foodstuffs and widely consumed entertainment, such as cinema tickets. The most commonly quoted inflation indices are the Consumer Prices Index (CPI) and the Retail Prices Index (RPI). The main difference between the two is that the RPI also includes costs associated with housing such as rent levels, mortgage interest payments and housing-specific taxes. CPI also takes into consideration that certain goods and services may be substituted by cheaper alternatives when their prices go up. While the ‘basket’ of goods and services used to calculate inflation varies from country to country, it will include tens of thousands of separate items to provide an accurate overall picture not unduly influenced by factors that might cause price increases in isolated items. Items are also weighted based on an assessment of how much we spend on them.

What Are Inflation Figures Used For?

The main reason why governments so diligently monitor inflation rates is because of the harm that they can cause to the economy when they are too high or too low, as mentioned earlier. If they are too high or too low governments have a number of tools at their disposal to increase or decrease inflation. The most commonly applied of these tools are the control of money supply and interest rates. When inflation is considered to be too low central banks often decrease interest rates to encourage borrowing, and subsequently spending, which increases the demand for goods and services, pushing up inflation. The opposite approach is taken when inflations rates are too high. If this fails in the case of low inflation, or is not thought to be likely to have a strong enough influence by itself, central banks can increase the supply of money in the economy by printing more and feeding it into the economy through the purchase of financial assets from financial institutions, usually government bonds. This cash then encourages these financial institutions to increase lending by offering cheaper prices and cash flow around the economy increases, stimulating demand and inflation.

If you would like to improve your understanding of business and finance, why not take a qualification such as the CFA® Program. Morgan International offers a number of different professional finance, investment and accounting qualification programs at locations across the Middle East.

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Government Regulation: Does It Help or Hinder Business in the UAE?

 

By John Alexander Adam

When it comes to government regulation of the economic and business environment there are a diverse range of positions. Some postulate that any form of regulation inherently hinders business and that it flourishes best without any kind of government interference. However, the majority accept the need for some level of regulation to both support business development in overcoming particular obstacles and to ensure some degree of quality control and consumer protection.

In the UAE, the history of government regulation of the business environment has historically been one of stimulation rather than constraint. Governments across the region have made a concerted effort to invest the wealth that oil and gas have brought them into the long term project of building sustainable, diversified economies almost from scratch. The two-pronged approach to this has been the creation of regulatory environments which offer both support for local business and encourage foreign businesses to move to the region.

We’ll look specifically at government regulation that impacts businesses operating in Dubai here. While each Emirate has its own regulatory framework, these conditions tend to be similar across the UAE.

  • Free Zones

There are 35 ‘Free Zones’ spread across the UAE, not only in Dubai. These zones have special regulatory status and host particular categories of business which vary from zone to zone. The advantages of the UAE’s free zones are:

  • Exempt of Import and Export Tax
  • 100% Foreign Ownership of the Company is Permitted
  • Corporation Tax Waived for up to 50 Years
  • All Income and Profits Can Be Repatriated
  • No Personal Income Tax for Employees
  • Legal Framework

Dubai, and the wider UAE, has a special legal framework specifically catering to foreign companies. It has been set up to minimalize paperwork, and the time required for company set-up, registration, licensing and other procedures.

  • Investment Support

The Dubai government’s Department of Economic Development (DED) is tasked with the development of policy designed to support and encourage business in the Emirate, both locally and foreign-owned.

  • Open Trade

Dubai and most of the UAE has open trade agreements with the bulk of its trading partners, with 75% of goods coming in duty free and with an average tariff rate at just 4%.

In the case of the UAE in particular, it is clear that government regulation is generally a boost to business. It plays an active role in encouraging a financially friendly environment by stripping back taxation and administration rather than imposing it.

There is, however, opinion that increased government regulation of a different is required in some areas of business in the UAE. One area of particular concern is interest rates which many feel the governments need to step in to cap, with levels significantly higher than international averages.

If you would like to improve your understanding of business and finance, why not take a qualification such as the CFA® Program. Morgan International offers a number of different professional finance, investment and accounting qualification programs at locations across the Middle East.

 

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Understanding the Different Types of Financial Markets and Their Role

 

By John Alexander Adam

When we talk about ‘financial markets’, we most commonly think of the stock market. However, there are a vast array of different financial markets, some huge and some relatively small. In essence, a financial market is any regulated marketplace where assets are traded and prices set by the forces of supply and demand. Some financial markets are open to anyone while others have requirements around who can participate. There are, however, a handful of primary financial markets that the lion’s share of the global economy’s financial transactions take place through that we’ll explain in brief here:

Capital Markets

Capital markets are where private corporations and governments raise capital for long term investments through the sale of securities. These securities can be roughly broken down into two main groups: equities and bonds. Equities are an ownership stake in the company itself whereas a bond is a debt investment where the buyer essentially loans money to a company or government, repayable with interest. Primary capital markets are where these securities are sold initially and secondary capital markets are where they are subsequently traded.

Money Markets

The money market, sometimes referred to the cash market due to its high levels of liquidity and short term nature, is where securities with extremely short term maturity dates are traded. They are used for short terms borrowing and lending, normally up to a year at most and for as little as a week at the other end of the spectrum. Money markets are primarily used by large corporations and governments for short term liquidity and the main securities sold and traded there are U.S. Treasury Bills, Certificates of Deposit, Eurodollars, repurchase agreements, municipal notes, federal funds and commercial paper.

The money market is considered as about as safe as any investment can be due to its short term nature, high liquidity, and the financial solidity of the organizations selling the short term debt. Subsequently, returns are also small and money markets are generally viewed as a safe place to park cash in the short term, rather than as an ‘investment’.

Derivatives Markets

Derivatives are contracts whose value is based on an underlying asset. Common derivatives include CFDs (Contract for Difference), futures, options and swaps. When you buy a derivative you do not buy any actual physical asset, such as oil or equity in a company. Rather, what you buy is a contract which promises to pay the difference in price between the underlying asset at the point of the contract’s purchase and the price at the expiry of that contract. This means that you can buy a derivative that can allow you to profit from the decrease in the underlying asset’s price if you believe that is what will happen.

Derivatives, as you may have gathered, are complex financial instruments and are essentially used by traders to speculate on price movements of the underlying assets. They also often involve leverage, which means that profits, or losses, can be magnified by many times the initial sum invested.

Forex Markets

The forex market is the Granddaddy of financial markets, the largest in the world with average daily volumes of over $2 trillion traded. The market is open 24 hours a day and runs through different financial centers in different time zones around the world, meaning that the market never sleeps. When London and other European centers such as Frankfurt and Zurich finish for the day, New York and other cities take over with the baton then passing to Asia where Tokyo, Honk Kong, Singapore and Sidney before Europe wakes up again. Every transaction involving different currencies, from exchanging money for your holidays to trade between small and large enterprises around the world dealing in different currencies to debt swaps between governments and their buying and selling of currency reserves, pass through the forex markets every day. Unlike most other markets, this colossal market has no central marketplace like a stock exchange or other regulated body. Transactions take place ‘over the counter’ with exchange rates controlled entirely by global supply and demand.

As well as the four mentioned here, there are many other kinds of financial markets of various complexity and hosting different kinds of participants. They range from hard and soft commodities markets to spot markets and over-the-counter markets for penny shares.

If you would like to improve your understanding of business and finance, why not take a qualification such as the CFA® Program. Morgan International offers a number of different professional finance, investment and accounting qualification programs at locations across the Middle East.

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The What, Why and How of Business Forecasting

 

By John Alexander Adam

The use of business forecasting models is now regarded as a basic necessity in business management and planning. Setting up the plan for the months and years ahead always involves prediction of trends in demand based on factors such as seasonality, competition and wider economic factors. Management use these forecasts, which are essentially informed guesses, in their budget planning and things like HR strategy, capital investment and marketing spend are all shaped based on business forecasting.

There are two main categories of business forecasting methodology. Judgement forecasting, most commonly termed ‘qualitative forecasting’, is based on human judgement while ‘quantitative forecasting’ is data driven. Both have their common applications, strengths and weaknesses.

Qualitative ‘Judgement’ Forecasting

Qualitative Forecasting is essentially based upon ‘informed consensus’, either that of consumers themselves and harvested via market research, or ‘experts’. Qualitative business forecasting is most commonly used for shorter term decision making and in situations where there the scope of the forecast is more limited. It is generally accepted that its reliance on opinion over data means that judgement forecasting is not a reliable over the longer term.

Qualitative forecasting is generally most relied upon when calculating likely demand before a product or service is launched. Market research and focus groups are examples of qualitative ‘judgement’ forecasting based on a consensus of consumer opinion. The compilation of the opinion of a cross-section of relevant experts is referred to as the ‘Delphi’ method of qualitative business forecasting.

Quantitative Forecasting

Quantitative business forecasting methodology is founded on the principle that human opinion is both fickle and unreliable, at least over the longer term and when the scope of the forecast is not very limited. There are three main methodologies that quantitative forecasting relies upon:

  • The Indicator Approach

This approach looks at the various ‘indicators’ or influences that can impact upon demand. It isolates particularly important indicators which cause changes in demand even when all other influences retain their status quo. The influences are termed ‘lead indicators’ and tend to be big macro-economic factors such as unemployment rates and GDP, though different kinds of products and services will use different lead indicators depending upon their historical influence on demand. Historical data will show how changes to these indicators impact demand and will base sales forecasting on forecasted fluctuations in these lead indicators. The indicator approach will almost certainly not be used in isolation for business forecasting and is usually combined with the other main quantitative methodologies.

  • The Econometric Approach

Econometric methodology is essentially a more complex version of the indicator approach and incorporates all of the indicators that are considered to have been shown to impact upon demand. This methodology uses complex statistical models to forecast not only how changes to different indicators in isolation are likely to impact demand but how they work together. Indicator 1 may be shown to have historically impacted demand for a company’s category of product by x percent when it has changed by y percent. The same might be said of indicator 2. However, when indicators 1 and 2 have changed by these same percentages together, the impact on demand may have been different. Add in another several indicators and the model becomes a sophisticated algorithm based on frequency, probability and statistical inference involving large groupings of statistical data interacting with each other to produce different forecasted outcomes.

  • The Time Series Approach

The Time Series Methodology is more of an ‘editor’ to the other methodologies covered than an independent methodology in its own right. It takes the historical data used in the other methodologies and attaches greater weighting to more current data and can discount older data or less influential data as ‘outliers’ than can corrupt the forecast.

If you would like to improve your understanding of business and finance, why not take a qualification such as the CFA® Program. Morgan International offers a number of different professional finance, investment and accounting qualification programs at locations across the Middle East.

 

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Pass Your Level I CFA® Exam With Confidence

 

By Morgan International Staff Writers

Nobody ever sets out to fail their certification exams, but the inevitable reality is that some do. It’s only once the results are out that the soul-searching begins to pinpoint what exactly went wrong.

Another possible cause could be questions left unanswered because you were not familiar with the subject matter. The deeper issue here, though, would be your approach to revision before the exams and possible lack of question practice. In other words: poor preparation. Generally there are three main areas where students should direct their searching. Top of that list could be that not all the questions were answered, based on lack of sufficient time. If only the examiners had given you half an hour or an hour more, you might say, then you would have been able to answer them all. What this really points to, though, is a weakness in your time management and exam technique.

Perhaps you felt that you answered all questions correctly and came away feeling you passed, only later to find out you didn’t. Here, the issue is most likely a failure to address the specific requirements of each question in a succinct and clear manner. Again, preparation is the key word.

With a view to specifically help students overcome all of these issues, Morgan International developed a set of study tools prepared by subject matter experts designed to give students the most thorough preparation, all with the goal of passing. For the Chartered Financial Analyst (CFA) exam, Morgan's tools and resources gives you a combination of practice questions, mock exams and case study questions. Remember, these have been written by subject matter experts and therefore prime you in the best way possible.

With this valuable information to hand, your preparation should be honed to perfection and you should be well on your way to sitting your exam with confidence you did everything you could to pass.

Pass your Level I CFA® exam with confidence! Click here to view Morgan’s full range of CFA® Program packages.

 

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What is a Recession and How Long Does It Take to Get Out of One?

 

By John Alexander Adam

Anyone over the age of 20 will have experience of a recession, with the ‘Great Recession’ of 2008-13 still fresh in the memory. While the answer to the second part of our question may seem to be already apparent, with it taking 5 years for the global economy to officially come out of recession 3 years ago, the amount of time required to come out of a ‘recession’ can vary from anything to a few months to several years.

What is a Recession?

The obvious place to start is an explanation of what exactly a recession is. While there are different schools of economics theory, all those that we accept as having merit in explaining our modern capitalist economy have as a basic principle the cyclical nature of economies. As such, recessions are an integral part of the business cycle and essentially unavoidable. The official technical definition of a recession is two consecutive quarters during which economic growth is negative. The economic growth of a country is measured by its Gross Domestic Product (GDP), which is the combined value of things like manufacturing, employment, real income and the balance of trade in and out of the country.

A global recession such as the recent ‘Great Recession’, is a rarer event when recession impacts countries across the world simultaneously. In the lead up to a recession business activity slumps and this leads to a downward spiral in economic activity which can be difficult to reverse. Recessions can often be triggered by a significant shock to the world’s financial markets, such as the US subprime mortgage crises which triggered the Great Recession. Large banks in the US, and around the world, had exposed themselves to risky mortgage-based derivatives which lost value quickly when financial markets realised how risky they actually were. The significant negative impact this had on so many international financial institutions meant that lending around the world collapsed, and with capital so hard to access spending nosedived, plunging the global economy into one of its worst ever recessions.

Recovery from a Recession

While the technical definition of a recession is two consecutive quarters of negative GDP growth, it is a little more complex than that. A recession has leading and lagging indicators. Some results of a recession take longer to become apparent as companies take some time to fully appreciate the changed environment and react. The stock market is one example of a leading indicator as stock prices are largely based on future expectations. So when markets get nervous that trouble is afoot, falling stock prices quickly reflect that. Employment is a lagging indicator as companies generally reduce salaries and staff numbers at the point where they feel they have no choice but to do so.

Conversely, when an economy moves into the recovery phase and starts to come out of a recession, stock markets will reflect growing optimism quickly but companies won’t start to hire more staff until their turnovers and finances have recovered to a healthy level.

Momentum is key to both economic decline and growth. Economic contraction takes place as economies cannot, at least based on all historical evidence, remain on an indefinite trajectory of growth. At some point the growth slows and when it drops to a slow enough pace it begins to move backwards into negative growth. This is, according to most economists, a natural pattern of the economy finding equilibrium. Recovery happens when the pace of the decline is also reduced to the point where it can be pulled out of reverse and into growth again.

When an economy contracts, governments and central banks have a number of tools at their disposal to reduce the velocity of contraction and eventually drive it back to growth. The two most commonly utilized tools are interest rates and Quantitative Easing. When central banks reduce interest rates they reduce the cost of borrowing. This encourages companies and banks to increase borrowing and invest, which increases the overall flow of money and spending in the economy, the basis of economic growth.

Quantitative Easing also reduces the cost of money and increases its flow but through a different technique. Central banks print money and use this to buy bonds and other financial assets from financial institutions and banks. This provides them with a greater flow of cheap cash with which they can then lend to companies and individuals in greater volumes and more cheaply, stimulating spending and growth further down the economy.

How long the recession from recovery takes largely depends on the scale and success of such intervention and how long it needs to take hold. There is a school of thought that such artificial stimulation by central banks is gradually reducing the value of money and building up problems for the future.

If you would like to improve your understanding of economics, business and finance, why not take a professional qualification such as the CFA® Program. Morgan International offers a number of different professional finance, investment and other business-related qualifications at locations across the Middle East.

 

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Financial Information Analysis and Their Role in Strategic Decision Making

 

By John Alexander Adam

The upper management of any business are tasked with the responsibility to take the decisions which will enable to company to achieve the best financial results possible in the context of the external environment. They have to make judgement calls on how to achieve the best balance between the company’s costs, running and capital investment, and the income and profit that it can achieve as the result of these costs. It’s a careful and often complex balancing act and involves taking into account factors they can be sure of as well as anticipating potential changes to internal and external influences that they can’t be sure of.

Every business has three primary financial statements: the Balance Sheet, the Cash-flow Statement and the Income Statement. The information within these statements is entirely quantitative and neutral. While different kinds of business operate according to different principles, the management of those businesses draw objective information from its financial statements. Based upon the general principles that apply to the particular business, such as operating cash-flow requirements, management can come to the conclusion as to whether the business is in need of a cash flow injection and needs to borrow, or is in a position to be able to make investments.

The Balance Sheet

A balance sheet lists all of a company’s assets and liabilities side by side and will include liquid assets such as cash in the bank account, money owed to the company and fixed assets owned such as property, machinery and company cars. It will also list liabilities such as salary expenses, bank loans, outstanding sums owed to suppliers and so on.

The information contained with a balance sheet can give a good business manager valuable insights into how the company’s performance could be optimised. For example, company policy may be that clients are given six weeks to settle their invoices. If the company’s annual sales amount to a total of $100, 000 million, reducing the grace period for invoices to be settled within to 30 days would shift $4 million from accounts receivable into cash in the bank account. That $4 million could be put to work as operating capital that could help the company grow without any change to overall income generated from sales.

Cash Flow Statement

A company can look like it is generally profitable based on its balance sheet and other standard accountancy methods. However, a company that theoretically makes more money that its overall costs but doesn’t have cash in the bank to cover operating costs will not last long. It’s no use having $1 million in revenue due to come in after 3 months if you have $200,000 in the bank now and operating expenses of $400,000 over the next 3 months. Managers need the information available in the cash-flow statement to be able to make decisions such as the need to reduce operating overheads, inventory, debt, reassess credit facilities available to clients and so on.

The Income Statement

A company’s income statement shows what its forecast profitability is over a particular period into the future. In some ways it is more detailed than the cash-flow statement in that it takes into consideration subtleties such as value amortization of fixed assets and depreciation. However, it does not provide detail on specific dates when income will be received and expenses due, grouping income and expenditure together over quarters or a full financial year. The information contained in the income statement is used by management in macro decision making such as managing overall levels of operating costs and adjusting profit margins as required.

If you would like to improve your understanding of business and finance, why not take a qualification such as the CFA® Program. Morgan International offers a number of different professional finance, investment and accounting qualification programs at locations across the Middle East.

 

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CFA® charterholder Salaries in the UAE

 

By John Alexander Adam

An in-demand professional qualification such as the CFA® charter can open a wide range of doors when it comes to professional opportunities and increased earning power, especially in a region such as the UAE and wider Middle East. The developing economies of the region and growing financial centres are hungry for qualified finance professionals. While gaining the CFA® qualification at all three levels will take around 4 years, it is path that aspiring finance professionals understand is worth their while. So when all that hard work has finally paid off and you have earned you CFA® charterholder status, what are the main career paths open to you and what kind of salary level can you expect in the UAE?

CFA® charter Career Paths

CFA® charterholders are most commonly associated as working as investment analysts and portfolio managers, and in the UAE these two roles do indeed employ the join largest percentage of CFAs in the region at 13% each according to research published by the eFinancialCareers website. However, it is interesting to note that 13% of CFAs are also employed as Chief Level Executives, further vindication of the worth of attaining CFA® qualification. A full list of CFA® charterholder occupations in the UAE is given as follows:

  • Chief Level Executive: 13%
  • Investment Banking Analyst: 13%
  • Portfolio Manager: 13%
  • Research Analyst: 12%
  • Relationship Manager: 8%
  • Manager of Managers: 6%
  • Financial Advisor: 5%
  • Corporate Financial Analyst: 5%
  • Risk Manager: 5%
  • Trader: 3%
  • Consultant: 3%
  • Private Banker: 3%
  • Accountant/Auditor: 3%
  • Strategist: 2%
  • Other: 4%
  • Unemployed: 2%

CFA® charterholders Salary Levels

While salary levels for professionals holding the CFA® charter of course varies greatly depending on occupation, seniority level and company, it is safe to say that even at the lower end of the scale CFA® charterhlders are well-remunerated. Generally, salary levels in the UAE are higher than in other geographical regions, as well as being further boosted by the favourable tax environment. Positions requiring specialized professional qualifications such as the CFA® charter are particularly well rewarded in the UAE.

The Robert Half Middle East Salary Guide for 2014 puts the salary scale for financial analysts in the region at between $62, 500 and $97, 500. For Senior Financial Analysts the range is $ 72,750 to $ 109,750. These salaries also showed growth of around 4.5% between 2013 and 2014. The pay scale for Chief Level Executives is noted as being between $167,500 and $550,000.

According to the Morgan McKinley Banking and Financial Services Guide for the UAE 2014, Portfolio Managers in the region can expect to earn between $40,000 and $70,000+. The report also notes the influx of capital into the regions financial institutions and that over 2014 basic salaries in financial services rose by between 6% and 8%.

In terms of career prospects and salary levels, CFA® charterholders are undoubtedly at a strong advantage in the UAE and wider Middle East with the regions financial centers continuing to grow and in need of qualified talent.

If you would like to improve your understanding of economics, business and finance, why not take the CFA® Program! Morgan International offers a number of finance qualifications including the CFA® Program, at locations across the Middle East.