Chartered Financial Analyst

Levels, Program Benefits, Eligibility, Certification & Preparation Strategies

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Uncover all essential details about the Chartered Financial Analyst (CFA) designation credential. By passing the CFA exam, you can establish yourself as an expert in the field and open doors to new opportunities. The CFA Program offers a comprehensive curriculum that covers investment analysis, portfolio management, and ethical standards. With the continued growth of the financial industry, there has never been a better time to invest in your career.

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What is a CFA Charter?

CFA stands for Chartered Financial Analyst. A CFA® Charter is a certification given to individuals who have completed the CFA® Program and attained the work experience requirements the program demands. 

The CFA Program is a three-part exam: Level I, II, and III. The CFA Institute conducts it. In addition, you receive the CFA® Charter designation after program completion, application, and acceptance by CFA Institute.

Benefits of Passing the CFA exam

The CFA certification is highly valued in the job market. There are several reasons for taking up the CFA Program.

It's Globally Recognised

With over 60 decades of experience in training for investment careers, this program is recognised and respected worldwide, ensuring better visibility for a CFA Charterholder.

Builds Market Ready Skills

The focus of the CFA Program isn't just a knowledge-driven curriculum but acquiring skills needed in the real competitive world of the corporate universe. It pushes for developing analytical skills, investment analysis, quantitative methods, and economics—industry experts from different parts of the world reform curriculum to keep it industry relevant.

Gives Access to Many Career Paths

CFA Charterholders are in an enviable position to hold lucrative jobs in various sectors of the economy. They enjoy successful careers in asset and wealth management, investment banking, commercial banking, and consulting.

Relevance in the demanding job market

It assures your employers of your skill-set and explicitly keeps pace with the rapidly evolving industry. CFA® Charter globally conveys you are dedicated to maintaining a high standard of professionalism and believe in growth and constant evolution in the industry. CFA Charterholders find fulfilling careers in different spheres of the economy and can modify and adapt as per the market demands.

Saves time and money

Compared to programs like MBA, CFA is lighter on resources like time and money. Those aiming for a career in finance can skip MBA and concentrate on receiving the CFA® Charter by attempting the exams. Also, it is a niche specialisation that is in high demand.

What jobs can I apply to?

What jobs can I apply to?

CFA opens the path to many choices and openings. The list is long, and with the world as your playing field, nothing can stop you from availing them. The following are the areas you can be a part of after becoming CFA certified anywhere in the world.

  • Corporate Banking
  • Quantitative Analytics
  • Asset management
  • Equities
  • Private Equity
  • Risk Management
  • Research
  • Derivatives
  • Wealth Management
  • Capital Markets
  • Trading

Preparation Strategies for CFA

Getting ready to pass the CFA exams entails serious commitment and detailed planning. The CFA figures state the annual average pass rate for over a decade has been 44% for the CFA Level I.

Understand the exam format

You must know the format well to pass your CFA exam in the first attempt. Check the weightage given to each topic and plan your study time accordingly. Each candidate will have strong and weak areas. Dedicate time to each area accordingly , but don't lose sight of the syllabus weightage

Improve Time Management

You might already be multi-tasking daily; hence managing your time is crucial. During prep, time yourself and attempt the practice tests. Set aside your distractions. The CFA website reports that successful candidates study on average over 300 hours for each CFA exam level. Therefore, aim to put in those many hours.

Take a Prep Course

It is always a great idea to join a prep course to help you overcome learning obstacles, keep up to date regarding the topics, and offer fail-proof techniques to tackle each question in the exam. Classes on a platform like Edulyte allow you to learn anytime, with global experts, through live and affordable courses.

Practice and Practice

The CFA Institute will provide many mock exams and practice questions in their books, so start there. Then, find the topics you are weakest in and focus on reviewing those. From there, start doing the mock exams at least two months before the exam. Prep courses can provide even more practice questions.

Know your financial calculator well

On the test day, you can bring one of two specific calculator models. Practice with your chosen device to know exactly how to use it. You can save time and be quick during your exam once you get a hang of using the calculator.

Enrolment Criteria and Requirements for CFA Program

As per the CFA Institute website, a CFA candidate must fulfil the following   requirements:

  • Bachelor’s Degree: the candidate must have attained a bachelor’s degree or a degree from an equivalent program.

     

  • Final-Year Student: a final year student of a bachelor’s program or an equivalent program can enrol for the Level I exam. But it is necessary to complete the degree course before registering for the Level II exam.

     

  • Work Experience: a combination of 4,000 hours of work experience and/or higher education acquired over three sequential years by the Level 1 exam registration. If you have a combination of work experience and higher education to achieve the minimum hours and years, assume that higher education takes 1,000 hours per year. Paid Internships/articleships are accepted. Working for your own business or your family business counts only if you are paid for your work.

     

  • Note: Part-time work DOES NOT count.
Enrolment Criteria and Requirements for CFA Program
Enrolment Criteria and Requirements for CFA Program

Things You Should Know About the CFA Exam

  • Exams are in English: Ensure you are proficient enough in English to read, understand and answer the questions, including complicated financial problems.
  • Availability of the CFA exams in your country: Check the official website to know if the CFA Program is available in your country of residence. There are some countries where the CFA Institute does not function.
  • Have a valid passport: CFA Institute expects all its candidates to have valid travel passports. You cannot register for the CFA Program without it.

How do I register for CFA?

To become a CFA candidate, you must enrol on the CFA® Program and register for the Level I exam. 

  • The registration has to be done on the official website 
  • The CFA Institute is rather strict about its onboarding process, so you must carefully review the eligibility requirements on the website.
  • All important notifications regarding the exams and the Program are posted on the website regularly.
cfa institute

Master of Applied Finance vs Chartered Financial Analyst - Which is right for me?

The answer to this question lies in your personal and professional preferences. 

Entry-level requirements for Master of Applied Finance:

  • A bachelor’s degree in commerce or a related field; OR
  • A Related graduate diploma; OR
  • A bachelor’s degree with two years of related work experience

Entry Level Requirements for CFA:

  • A Bachelor’sBachelor’s degree in any discipline; OR
  • Four years of professional work experience; OR
  • You must have the requisite combination of professional work experience and education, totalling at least four years.
  • You can also begin your CFA study in the last year of your degree program. 

The requirements show that you can still start your CFA Program in the final year if you don’t have a bachelor’s degree in commerce. But, again, it is because both programs favour work experience. Also, you have to be sound in Mathematics to deal with the demands of the CFA Program.

Career Goal:

Suppose you aspire to work in a managerial position, in risk management or a generalist role requiring a broad knowledge of the financial landscape. In that case, the MAF will provide you with a solid grounding in these areas.

The CFA can provide more in-depth knowledge if you want to become a financial specialist, such as a securities analyst or portfolio manager. Both qualifications are accepted globally and give employers confidence in your skill set.

MBA vs CFA - which is right for me?

These two are much in-demand credentials, and deciding which one you should choose can be tricky. Your career aspirations can make that decision for you.

  • Career Scope for MBA degree holder: Master of Business Administration (MBA) is a broader program than Chartered Financial Analyst (CFA).CFA targets the niche skills of investment management, whereas MBA includes topics like marketing and management. MBA graduates may pursue careers as consultants, chief financial officers, financial analysts, or financial managers. However, they can switch career paths as their degree enables them.

  • Career Score for CFA Charterholder: CFA Charterholders are investment experts who have trained to be highly analytical. Investment analysis, portfolio strategy, and asset allocation are among the specialist skills provided by the CFA credential.

  •  Cost of an MBA vs. a CFA : An MBA degree will cost Master’sMaster’s degree costs can range from $30,000 to $120,000, according to Education Data Initiative data from November 2022. This data reports that the average cost of an MBA is $61,800.By contrast, a CFA designation will cost less than $5,000.

Also, an MBA usually takes 2-3 years to complete. The CFA certification has three exams—levels I, II, and III—and can take an average of four to five years to complete. Learn more about MBA vs CFA here

How much can I earn as a CFA?

The CFA Charterholders are seen juggling different roles. Hence their salaries can vary. Also, a significant amount of compensation in the investment industry takes the form of bonuses, so total compensation includes base salary, any bonuses, and long-term incentives. Here are some indicative figures.

Salary figures for CFA Charterholders in the US

DesignationSalary in USD
CFA® Charterholder Portfolio ManagerBase Salary $126,000
CFA® Charterholder Portfolio Manager

Total Compensation

$177,000

*As per the www.cfainstitute.org 

DesignationSalary (Average in USD)
Entry-level roles$72,644
Senior-level roles$127,783

*As per salaryexpert.com

Salary figures for CFA Charterholders in Australia

DesignationSalary (Average in AUD)
Entry-level roles$94,799
Senior-level roles$166,754

*As per salaryexpert.com

Salary figures for CFA Charterholders in UK

DesignationSalary (Average in Pound Sterling)
Entry-level roles£52,477
Senior-level C Designation£92,308

*As per salaryexpert.com

CFA Program Levels and Syllabus

CFA Level I 

Structure:

  • There are 180 multiple-choice questions,
  • The questions are split between two 135-minute sessions (session times are approximate). 
  • You get an optional break between sessions. You must take both sessions to receive the exam result.

Duration: 

  • The first session is 2 hours and 15 minutes. It includes 90 multiple-choice questions. They cover ethics & professional standards, financial statements, and analysis economics.
  • Second session is 2 hours and 15 minutes. It includes 90 multiple-choice questions covering corporate issuers, equity, fixed income, derivatives, alternative investments and portfolio management .

CFA Level II 

Structure

  • The CFA Level II exam has 22 item sets of vignettes 
  • There are  88 accompanying multiple-choice questions.

Duration

  • The Level II exam lasts for 4 hours and 24 minutes. It is split into two equal sessions. 
  • Each session is timed for 2 hours and 12 minutes, with an optional break in-between.

CFA Level III

Structure

  •  The CFA Level II exam has 22 item sets of vignettes.
  •  It has  88 accompanying multiple-choice questions.

Duration

  •  The Level II exam lasts 4 hours and 24 minutes.
  •  It is split into two equal sessions of 2 hours and 12 minutes, with an optional break.

Impact of Artificial Intelligence (AI) on finance

Perhaps no other sector stands to gain from AI in terms of speed, accuracy and efficiency as finance. The industry realises the huge gain it can make from software that self-improves and self-improvises. The ways AI in which is revolutionising finance include: 

Consumer Financial Services : Managing one’s finances is the core of adopting AI in personal finance. AI can offer finance management options based on a consumer’s wealth and spending habits. Therefore, creating suitable consumer spending, saving and investing styles are an excellent role for AI.

Corporate Finance : Assessing and predicting loan risks is an immense responsibility that AI can shoulder easily. Loan underwriting can be reduced, and suspicious activities can be detected with the help of machine learning. Certain banks have already started using AI to analyse the relevant data on consumers and safeguard themselves from foul play. 

Foresee Possible Financial Fraud : AI also allows for simulations of situations where cybercrime can occur. Hence financial services can be secured as possible risks and dangers can be predicted and avoided. AI also plays the role of a regulator, ensuring that all policies and security measures are being adhered to in creating a financial service. 

Top content providers of Chartered Financial Analyst (CFA) exam study materials

Passing the notorious CFA exam is challenging because the pass rates can lie between 40%-50%. If you are seriously considering passing the CFA exam, you should consider availing of every good prep resource.

Find out about some of the best CFA prep courses and classes below.

Wiley’s CFA® Program

It offers an integrated financial analysis course which is much in demand. You can choose between Self Study, Gold and Platinum courses. In their Gold and Platinum courses, you get professional online mentoring, video lectures, a personalised study schedule and more. Their study material can be stored offline too. 

Kaplan Schweser 

It relies heavily on test content and gets you well accustomed to the format and style of exams. Even in its Self Study program, you have access to instructors who can help you with learning roadblocks.

Analyst Prep CFA Course

CFA Charterholders have crafted this course, and its progress tracker lets you chart your progress. It even lets you know when you will be ready to take the exam. Its video lessons are the primary study source.

The Princeton Review CFA Study Materials 

The course is designed so that you can go through the essentials of the CFA exam in 120 hours. You also have access to the study material for an entire year. The Essential Course gives you access to study notes, video lessons and flash cards. The Ultimate course also includes live sessions and practice tests. 

Edulyte

Edulyte has partnered with the leading CFA study resources and mock exams material provider FinQuiz. Avail  guidance for the CFA Level I exam through qualified mentors from across the world. Flexible learning allows you to choose your class timings. Along with resource materials, and practice tests, you get tips and tricks to pass the CFA exam on your first attempt. The highlight is that the classes do not burn a hole in your pocket. Contact our team to get discounted study materials.

Top 5 Certifications in Finance

You might be contemplating a career in financial analysis or already working as one. Professional finance certifications can improve your financial analysis game, earnings and reputation. Consider the following finance certifications to stay ahead of your contemporaries in the job market.

CFA

The CFA designation is a coveted certification in the finance world. Having three levels, this demanding certification by the CFA Institute can take up to 4 years to complete. 

The main exam topics include ethical and professional standards, quantitative methods, economics, financial reporting and analysis, corporate finance, portfolio management, equity, fixed income, derivatives, and alternative investments.

The curriculum centres around portfolio management and investment analysis. 

CPA

The Chartered Public Accountant  is the gold standard in the accounting realm. The curriculum favours those who aim for accounting jobs. It includes auditing and attestation, business environment and concepts, financial accounting and reporting, and regulation. 

FRM

Financial Risk Manager Certification is for you if the profiles of a risk analyst, risk officer and other positions in risk management excites you. It is a niche certification and can be cost-effective. Candidates must pass two rigorous exams and also work two years in the field of risk management. Financial Risk Managers (FRM) are accredited by the Global Association of Risk Professionals (GARP). FRMs specialise in assessing risk for central banks, insurance companies, accounting firms, regulatory agencies, and asset management firms.

CFP

Certified Financial Planner Certification is for those aiming to do well in investment and wealth management. Managing high-net-worth clients is at the forefront of the course.

The Certified Financial Planner Board of Standards, Inc. issues the credentials of a CFP.  The education requirements comprise two major components. 

  • at least a bachelor’s degree from an accredited university or college.
  • CFP Board approved the completion of a list of specific courses in financial planning

CMA

Certified Management Accountant Certification can work in corporate financial accounting and strategic management. The Institute of Management Accountants (IMA) offers the CMA professional credential. It vouches for a person’s business management, management accounting, and corporate finance knowledge. To become a CMA, you must:

  • hold a Bachelor’s degree.
  • have two years of work experience in management accounting.

Related Content and Learning Resources

CFA vs MBA

CFA vs MBA

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Conclusion

Whether you’re an aspiring finance professional or a seasoned industry expert, the Chartered Financial Analyst Course offers valuable knowledge and skills to help you achieve your career goals. With a rigorous curriculum and a global community of professionals, the CFA Program is an excellent investment in your future. If you want to advance your finance career and demonstrate your expertise to employers and clients, consider pursuing the CFA designation.

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Frequently Asked Questions

What is a CFA Charter?

CFA® Charter is a designation awarded to those who have completed three levels of exams (Level I, II and III) and completed acceptable work experience requirements.

According to the CFA Institute, CFA charterholders are qualified to work in senior and executive positions in investment management, risk management, asset management, and more.

What is the duration for the Level 1 CFA® Program?

The Level 1 exam is self-paced. Each Candidate is unique; the time to pass CFA Level I depends on their situation and motivation. Candidates spend about 300 hours of preparation time at each level on average.

What are the Exam Dates, Costs and Registration Fees?

Please visit the CFA Institute’s website for the latest Exam Dates, Costs and Registration Fees.

What is CFA® Level I all about?

Level 1 is a computer-based exam consisting of 180 multiple-choice questions. There are two 135-minute sessions with an optional break between sessions. You will get results only if you take both sessions. Each Level one exam session has 90 multiple-choice questions.

How much time must I devote to the CFA® Level 1 Program?

All exams are self-paced. Each candidate is unique, and the time to pass CFA Levels depends on their situation and motivation. Candidates spend about 300 hours of preparation time at each level on average.

How many years does it take to complete a CFA Program?

Candidates can complete the CFA program in 4-5 years, depending on their prep time and clarity of concepts.

What are the career opportunities for a CFA Charter holder?

There is endless scope for work. What'sWhat's even better? It opens the global job market for you. Some of the careers you can think about are:

  • Corporate Banking
  • Quantitative Analytics
  • Asset management
  • Equities
  • Private Equity
  • Risk Management
  • Research
  • Derivatives
  • Wealth Management
  • Capital Markets
  • Trading

Can I attempt to pass all Levels in one year?

No, you cannot sit for all the exams in one year. CFA Level I and Level II are offered three times in a year and Level III it is available only once a year. You can check exam dates on the CFA website.

How do I register for the CFA exam?

You have to register on the CFA Institute website. Then, you must create an account on the website and check it for the latest updates.

Why is it essential for me to enrol for CFA exam coaching?

CFA exams involve gruelling preparation, and their competitive nature demands guidance and assistance. A bit of casualness can affect your chances of doing well in the exams. It is essential to receive expert instructions and absorb the knowledge well. We recommend starting your studies as soon as you can.

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