The Chartered Financial Analyst (CFA) is a professional designation administered by the CFA Institute. The designation signifies an advanced level of competence and integrity in financial analysis.
The CFA curriculum covers a wide array of financial topics such as investment management, retirement planning, stocks, bonds, derivatives, and financial analysis.
Major investment banks and asset management firms are typically the largest employers of CFA holders. Some of the most popular job titles among CFA holders include portfolio manager, research analyst, chief executive, financial advisor, and corporate financial analyst.
The CFA charter is seen as the most desired professional designation in the financial analysis field. It began the United States, but professionals all over the world are now obtaining charters. By 2003, fewer than half of all CFA candidates were based in the U.S. and Canada.
Who Can Become A CFA?
In order to become a CFA, you must have completed at least four years of experience in the investment industry. You must also hold a bachelor’s degree at the time you begin the qualifying requirements.
There are three exams that must be passed in order before the CFA charter is granted. Each is exam is six hours long. They are not easy, and the rate of successfully passing all three exams in a row is roughly 8.6%. It takes an average of four years to obtain a CFA charter.
Once the charter is granted, annual dues must be paid to the CFA Institute in order to keep the charter active. Also, a yearly attestation must be made that CFA Institute Code of Ethics and Standards of Professional Conduct are being followed. Failure to adhere to the CFA Code of Ethics may result in the charter being permanently revoked.
Level One Exam
Currently, the CFA Level One examination is only offered twice per year – on the first Saturday in June and the first Saturday in December. The 10 topic areas of the Candidate Body of Knowledge are covered in the Level One exam.
These topics are corporate finance, economics, equity investments, ethical and professional standards, financial reporting and analysis quantitative methods, fixed income, derivatives, alternative investments, and portfolio management and wealth planning.
Approximately 42% of Level One exam takers pass the exam.
Level Two Exam
After Level One is the CFA Level Two exam. The pass rate for Level Two is 39%, but keep in mind that all Level Two candidates have already passed Level One.
The CFA Level Two exam is only offered once per year, on the first Saturday in June. Areas of focus on this exam include the valuation of various assets and the application of investment concepts and tools in contextual situations.
Level Three Exam
The capstone of the CFA qualifying exams is the Level Three exam. The pass rate for Level Three is 53%. Offered only once per year – the first Saturday in June – Level Three focuses on effective retirement planning and portfolio management comprehensively testing on all of the methods taught in the entire curriculum.