CFA (Chartered Financial Analyst) - The Gold Standard in Finance
“You can hire people with an MBA, but you don’t necessarily know that one MBA is the same as another MBA, whereas if you hire investment professionals with a CFA designation, you have confidence at the level of qualification.”
Jenny Johnson
Franklin Templeton
COO/President
Chartered Financial Analyst, popularly known as CFA is a professional postgraduate certification in the field of investment analysis offered by the CFA Institute. It is highly regarded as the “Golden career in Finance” because of its reputation. The curriculum of CFA is curated to provide students with the knowledge and skills necessary to make a successful career in finance or more specifically the investment banking industry.
CFA is a self-study certification that tests the knowledge of investment fundamentals, company valuation, portfolio management and wealth planning. The programme consists of three parts, CFA Level-1, CFA Level-2, and CFA Level-3 consisting of subjects such as Financial Statement Analysis, Corporate Issuers, Equity Investments, Alternative Investments, Fixed Income, Investment Analysis Portfolio Management and Wealth Planning.
It may seem all good, but earning a CFA Charter is an exhausting and difficult process. It is a prolonged, expensive, and challenging journey that may not suit every finance professional. But after you have completed all the levels, it can provide enormous benefits.
According to a report published by the CFA Institute in India based on a survey conducted in September 2022, “Impact Assessment of CFA Program in India”. Out of all the applicants, 43 per cent are postgraduates, and Finance is the most popular specialisation, with 53 per cent and 20 per cent coming from business and management disciplines. The highest average salary of Charterholders is Rs. 44.4 LPA and the average annual compensation is Rs. 19.3 LPA.
What is a CFA Charter?
CFA Charter is a designation given to the constituents who have cleared all three levels of the CFA programme along with the required work experience. It is generally pursued by people with a background in accounts, finance, economics, or business.
Who is Eligible for CFA?
The enrollment procedure for CFA is very defined. Those who meet these requirements are eligible for the charter. We have listed the general enrollment criteria for the CFA Level-1.
- Applicants must have an international travel passport.
- They should hold either a bachelor’s degree or equivalent from a recognised university/ should be at least 23 months from completing their undergraduate degree/ should have at least 4000 hours of work experience/ a college or a university education of at least three years achieved by the date of enrolling for the Level 1 exam.
Note: To be eligible for CFA Level-2, candidates have to clear the CFA Level-1. Similarly, to advance to CFA Level 3, students must hold CFA Level 2.
The Path to CFA Charter
The path to the CFA Charter is very difficult, it requires a fixed amount of study hours, work experience and a decent amount of money. To get a CFA Charter, applicants must pass the three levels of CFA, achieve qualified work experience, submit reference letters, and finally apply for the CFA Charter Membership.
Benefits of the CFA Charter
There is no doubt that CFA is one of the gold-standard careers in investment industries. Holding a CFA charter comes with its benefits. Though clearing all three levels of CFA is very difficult, however, the charter holder earns a lot of reputation and respect. We have listed some of the benefits that the charter holder can experience.
- Expansive Investment Knowledge- The CFA curriculum focuses its curriculum on investment and portfolio management. It also provides real-world skills and is constantly updated to stay relevant to industry standards and requirements.
- Respect- CFA professionals are among the most respected in the finance and investment industries. The exhausting process and difficult curriculum of the programme come with its reputation and higher earning potential.
- Global recognition- The CFA charter is globally recognised and considered a golden finance and investment career. It allows the CFA constituents to work in any country and any industry.
- Excellent alternative to an MBA degree- CFA is one of the best substitutes for an MBA degree. An MBA focuses on a broad business curriculum, while a CFA focuses on a specific area of finance: investment analysis and portfolio management.
All About CFA Exam
The CFA exam has computer-based testing, which enables them to adjust their curriculum to meet global standards. It has exam centres in over 400 major cities worldwide. Students can appear for the CFA exam twice per calendar year with a maximum of six attempts per level. Registration cost also varies depending on whether the candidate is early or late.
CFA Exam Syllabus
The CFA Charter has three levels, and the curriculum of each level is built on the framework of previous ones. The difficulty level also increases as a candidate advances to higher levels. It requires a total of 300 hours of study time which includes 10-20 hours of practical skills module.
CFA Level-1 is conducted four times in February, May, August, and November. CFA Level-2 is conducted three times in May, August, and November, and CFA Level-3 is conducted two times, in February and August. Students can check the complete syllabus of all the CFA Levels in the table below.
CFA Level-1
| Particulars | Values |
|---|---|
Exam Topics | Ethics and Professional Standards Quantitative Methods Economics Financial Statement Analysis Corporate Finance Equity Investments Fixed Income Derivatives and Risk Management Alternatives Investments Portfolio Management |
Format of the Questions | MCQs |
Exam Results availability | Within 60 days of taking the exam. |
Enrollment Requirements | Applicants must have an international travel passport. They should hold either a bachelor’s degree or equivalent from a recognised university/ should be within 23 months from completing their undergraduate degree/ should have at least 4000 hours of work experience/ a college or a university education of at least three years achieved by the date of enrolling for the Level 1 exam. |
CFA Level-2
Particulars | Values |
|---|---|
Exam Topics | Ethics and Professional Standards Quantitative Methods Economics Financial Statement Analysis Corporate Finance Equity Investments Fixed Income Derivatives and Risk Management Alternatives Investments Portfolio Management |
Format of the Questions | Vignette-supported multiple-choice questions |
Exam Results availability | After 60 days of appearing for the examination |
Enrollment Requirements | Pass CFA Level-1 |
CFA Level-3
| Particulars | Values |
|---|---|
Exam Topics | Ethics and Professional Standards Derivatives and Risk Management Portfolio Construction Asset Allocation Performance Measurement + Choice of Pathway: Portfolio Management Private Markets Private Wealth |
Format of the Questions | Vignette-supported multiple-choice questions and constructed response (essay) questions |
Exam Results availability | Within 90 days of taking the exam |
Enrollment Requirements | Pass CFA Level-2 |
CFA Application Process
To register for the CFA exam, candidates should ensure they have met all the eligibility requirements. Once candidates have fulfilled these requirements, they can apply for the admission procedure. Listed below are the application guidelines to register for the CFA exam.
- Students can register themselves through the official website of the CFA Institute.
- After the registration is complete, a list of available testing centres will appear with the specified date and time.
CFA Course Fees
The tuition fee for the CFA varies depending on when a candidate applies for the exam. There is an early registration period for all three levels which reduces the course fees for levels 1 and level 2. Also, in level 1, a one-time enrollment fee of $ 350 is charged, which is not charged in later levels. Listed below are the CFA course fees for Level 1 to Level 3.
| Particulars | Level-1 | Level-2 | Level-3 |
|---|---|---|---|
Early Registration | $ 990 (excluding one−time enrollment fees of $350) | $ 990 | $ 1090 |
Standard Registration | $ 1290 | $ 1290 | $ 1390 |
CFA Job Roles
CFA provides candidates with a range of career opportunities. Students learn in detail about the investment analysis and portfolio management industry. Some of the job roles one can apply for are listed below.
Key Aspects of the Chartered Financial Analyst (CFA) Charter
Till now, candidates must be aware of the CFA Charter, its eligibility requirements, syllabus, benefits, and its scope. India is one of the biggest markets for the CFA Institute. Listed below are some of the key facts one should know about CFA.
- As of 2023, there are approximately 4000 CFA Charterholders in India.
- China, India, and the USA are amongst the top markets for the CFA programme
- CFA designation is also recognised by the Securities and Exchange Board of India (SEBI) to be a Registered Investment Advisor (RIA). Students need to pass the XA XB exam conducted by NISM to be RIA.
- There are around 23 CFA test centres in India, and they are planning to expand further.
- CFA Institute also supports candidates through job listings, career-related content on the website, and networking opportunities. They also organise Financial Talent Summits and Career-day events.
Conclusion
To conclude, a CFA is indeed one of the best certifications to make a career in the finance and investment industries. It is an excellent alternative to an MBA, provides a good reputation and high earning potential, and diverse career choices. Some of the job roles one can choose are Portfolio Manager, Equity Analyst, Private Wealth Manager, Financial Analyst, and Investment Banker.
Frequently Asked Questions (FAQs)
As of 2023, India has around 4000 active Charterholders.
China, India, and the USA are amongst the top markets for the CFA programme
CFA designation is recognised by the Securities and Exchange Board of India to be a Registered Investment Advisor (RIA). Candidates need to pass the XA XB exam conducted by NISM.
CFA charter holders generally work in asset management industries, wealth management, and private markets. They mainly work in the financial services industry which involves management of funds or wealth. risk management, and understanding of financial markets.
As of now, there are 23 test centres and they are planning to expand more in the near future.
CFA Institute actively supports the candidates through job listings through the career centre, career-related content on their website, and networking opportunities. They also organise Financial Talent summits and Career Day events.