What Is a CFA in Finance Careers?

Chartered Financial Analyst

CFA Institute

What Is a CFA: The Chartered Financial Analyst (CFA) designation is a valuable credential certifying you as having in-depth knowledge of security types and investment vehicles. It also indicates that you are expert in quantitative methodologies for analyzing securities, such as assessing their value and identifying their underlying risks.

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Earning a CFA: You must pass three levels of exams, while also meeting certain professional and ethical requirements. The self-study curriculum changes yearly, in keeping with new developments in the securities markets and in the investment profession. The time needed for study and exam preparation will vary based on your educational background, experience and prior knowledge, but the absolute minimum required of most candidates is estimated at 250 hours.

Difficulty of CFA Exams: As of June 2009, the CFA Institute indicates that about 35% of those who take the Level One exam pass, and about 50% of those who take Level 2 and Level 3. The higher pass rates on the later exams probably results from the stronger pool of candidates that remains after Level One.

Why Get a CFA: For a number of years, the CFA has been demanded by major employers for senior positions in Securities Research and Investment Management.

It also can be required for certain Financial Advisor roles. More recently, leading financial services firms have started demanding the CFA as the ticket to a growing number of positions and career paths (including financial advisor career paths. Even where it is not necessary, the CFA is a prestige credential that enhances your worth and credibility as a financial professional, increasing your upward mobility.

While the vast majority of CFA charter holders in North America and Europe already have an MBA, the much lower out-of-pocket costs for books and fees (about $3,600) and investment of time (around 900 hours over four years) associated with getting a CFA is leading cost-conscious people, especially in the Asia-Pacific region and Africa, to pursue a CFA instead of an MBA, not in addition to it. The number of CFA charter holders has seen explosive growth, from 15,500 in 1987 to 59,750 in 2002 to nearly 100,000 in 2007. Most of this growth has been in the Asia-Pacific region. See "Get me into Goldmans," Financial Times, 8/16/2010.

For More Information: See the CFA Institute website. Also follow the links below for more detail on careers where the CFA is useful, other credentials, and more.

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