In order to become a Chartered Financial Analyst (CFA), you need to have the right skill set and knowledge. There are many programs and one of them that is well known and recognize is the Chartered Financial Analyst (CFA) Program. It is a professional credential offered internationally by the American-based CFA Institute (previously the Association for Investment Management and Research, or AIMR) to investment and financial professionals. The process to become a CFA by joining the CFA Institute is so difficult that it is estimated that only 1 in every 5 potential members will actually make it all the way to the prestigious title of Chartered Financial Analyst. However, those who do will harvest the benefits of being in such a respected international organization.
In general, how to get the title you need to pass all three levels of the CFA exam in succession. In addition to that, acquire 48 months of “acceptable professional work experience”. Lastly, you need to join the CFA Institute, which includes completing a professional conduct statement and affiliate with a local chapter.
For many people, the most complicated part of earning a charter is fulfilling the educational requirements. The CFA program consists of three exams encompassing a “candidate body of knowledge” (CBOK) that the CFA Institute believes is essential for those in the investment profession and it is divided into three levels in order to become a CFA charter holder.
- Level I: Focuses on a basic knowledge of the ten topic areas and simple analysis using investment tools
- Level II: Emphasizes application of investment tools and concepts with a focus on valuation of all types of assets
- Level III: Focuses on synthesizing all of the concepts and analytical methods in a variety of applications for effective portfolio management and wealth planning
The CFA Program is organized into three levels and each level involves a six-hour exam. To complete the program you have to pass the exam for each level. There is no limit to the number of times you can take each exam. Successfully complete the three exams consecutively and collect 48 months of approved work experience. The CFA Institute states that on average, the process of becoming chartered through the program takes four years.
In term of getting the work experience, fortunately, the CFA Institute’s definition of acceptable experience is somewhat broad, around areas such as trading, economics and corporate finance.
Over the course of becoming chartered, it is a prerequisite for candidates to become members of their local CFA society for the purposes of training, networking and collaborating. There are currently societies in 135 countries throughout the world.
According to the CFA Institute, to become a Member of a local CFA society at least need to fulfil requirements as follows:
- Hold a bachelor’s degree from an accredited institution or have equivalent education or work experience
- Pass Level I of the CFA exam or pass the self-administered Standards of Practice Examination
- Have 48 months of acceptable professional work experience in investment decision making
- Provide professional reference statements
- Apply for membership in a CFA society. Society membership is voluntary and highly recommended.
- Agree to adhere to and sign the Member’s Agreement and the Professional Conduct Statement
- Pay annual dues
- Adhere to the OFAC Compliance Policy. Residents of certain countries may be prohibited by law from becoming a CFA Institute or Society Member.
So, is it a good idea to become a CFA? The pros of having charter are you will get reputation boost from the education and experience that you received from the program. People in the business know the time and dedication it takes to earn the charter. When they see that you have earned it, they will likely believe you have the ability, dedication, ethical grounding and the hard, transferable analytical skills necessary to do the job in question. Another is the financial benefit as you may see your salary increase after you’ve earned the charter or you may surpass other applicants who don’t have the charter when competing for a new job. Having the charter it will also open to other finance and economic profession that highly regard the charter, apart of the profession of the investment management related profession. The cons are the time and cost that you invest in order to gain the charter. You have to be at least commitment to getting the charter. In addition to that, you have to remember that having the charter doesn’t mean that the career will boost right away.