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The CFA (Chartered
Financial Analyst) designation is an internationally respected professional
designation, currently administered by CFA Institute. Chartered Financial
Analysts are often featured in the Wall Street Journal, or on CNBC as
specialists in the investment industry. Many CFA charterholders work for Wall
Street firms in New York, or for firms in Boston, Chicago, San Francisco, Los
Angeles, Toronto, Baltimore, Hong Kong, Singapore, Tokyo, and other financial
centers. Other CFA charter holders are also MBAs who work for brokerage firms,
investment banks, mutual funds, and portfolio management firms. Many CFA
candidates are also CPA, CAIA, FRM, and/or ACCA candidates.
The charter is awarded to
professionals in financial analysis who have completed a comprehensive course
of study including three sequential exams. Additionally, charterholders must
have worked for a minimum of three years in a decision-making capacity in the
investment profession. They must also comply with the Code of Ethics and
Standards of Professional Conduct, and register for membership in a local
professional society.
The CFA charter is a
mark of achievement as well as dedication to the continuing pursuit of
knowledge, experience, and ethical principles that makes charterholders
competitive in any market. The charter opens doors to greater job possibilities
and career advancement for you. Moreover, the charter signifies your commitment
to helping your clients reach their investment goals. As a charterholder, you
can increase the world's standard of living by promoting greater understanding
of global capital markets for your clients and the larger investing public.
Who
is the CFA designation for?
The program is designed
for professionals who are currently practicing in the financial industry, or
other individuals, including students, who would like to become investment
professionals.
The program is a
"post-graduate" course of study; it is not a "basic"
introduction to the field of financial analysis. Candidates for the designation
must have a bachelor's degree or an equivalent of four years of qualified work
experience in the investment profession. No investment experience is necessary
before you take any of the tests. Many candidates enter the program with a
business school education; many candidates have a liberal arts background. No
specific "major" is required as a prerequisite for entering the
program. However, the material in the study program and the examinations are
designed for "master's" level individuals.
What
is on the CFA exam?
To pass, candidates
take three sequential exams. Exams for Level I, Level II, and Level III.
Candidates for the charter must pass each sequential test before advancing to
the next level. A candidate who is making excellent progress can finish all
three levels and be awarded the charter in three years.
The three levels cover
different aspects of the CFA Candidate Body of Knowledge (CBOK). Level I
emphasizes tools and inputs and includes an introduction to asset valuation and
portfolio management techniques. Level II emphasizes asset valuation and
includes applications of the tools and inputs (including economics, accounting,
and quantitative techniques) in asset valuation. Level III emphasizes portfolio
management and includes strategies for applying the tools and inputs in
managing equity and fixed-income securities. Ethical and professional standards
are emphasized in all three levels.
Topics covered in the
required materials include: investing; ethics and fiduciary duty; statistics;
economics; accounting; income statements; corporate finance; equity securities;
bonds; debt valuation; derivatives; real estate; portfolio management;
calculation of earnings per share; technical and fundamental analysis; futures,
options, and swaps; venture capital; Capital Asset Pricing Model (CAPM);
Arbitrage Pricing Theory (APT); asset allocation; stocks; foreign exchange;
money and banking systems; Gross Domestic Product (GDP) and Gross National
Product (GNP); inflation; and trading.
How
difficult is the CFA exam?
The difficulty is
perhaps best illustrated by past years' pass and fail rates. Over the past few
years overall pass rates have dropped to 40%, 40%, and 50% overall, for levels
I, II, and III, respectively.
When
are the exams given?
The Chartered Financial
Analyst exams are held in December (Level I only) and June. Candidates are
notified of results within 8 weeks of the exam. New charterholders, those
candidates who have completed all three tests and have satisfied the program's
other requirements, are announced each year in September.
Answers
about CFA exam registration.
If you are a new
candidate, you must register with the CFA Institute. Registration and
enrollment for the CFA exam is now open and if you register early, you will
save money.
