What Is A Chartered Financial Analyst (CFA®)? 

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Anyone aspiring to join the best investment analysis teams has to clear the three-part CFA examination. These individuals are the best fit for decision-making roles in industries that deal with investing. In addition, being called a CFA makes a person a versatile professional.

Key Takeaways

  • Chartered Financial Analyst (CFA®) is a credential that ensures the one acquiring it is an expert at investment analysis and can be trusted to help clients make wise investment decisions.The exam has three levels, and the students must clear all the levels one by one to be eligible for the CFA license.The candidates clearing the exam can join as an investment banker, portfolio manager, credit analyst, chief investment officer, etc.The examination tests everything from the candidates’ theoretical knowledge to their practical exposure.

CFA Explained 

Chartered Financial Analyst (CFA®) is a program that demonstrates the expansive knowledge and skills of people who complete it successfully. The professionals are the most competent resources for their capabilities and reliability with respect to the company code and ethics. 

Being globally marked, the credential gives the professionals possessing it an opportunity to stand out. Investment firms and financial organizations consider the ones with this designation professional of higher standards. Moreover, the charterholder has the skills to adapt to the transforming investment industry, which makes them an ideal match for the sector.

An aspiring candidate must adopt a step-wise approach to become a CFA charterholder, which is as follows:

  • Clearing CFA examsCFA ExamThe Chartered Financial Analyst (CFA®) Program offers a graduate-level curriculum and examination program designed to expand your working knowledge and practical skills related to investment decision-making. read more Acquiring required relevant work experience Submission of reference letters Applying for regular membership as a charterholder

CFA checks the expansive knowledge and skills of the candidates, their willingness to remain updated with the latest best practices adopted in the industry, their familiarity with real-world scenarios, and other relevant aspects covering their aptitude.

The curriculum covers ethical standards, economics, quantitative methods, financial statement analysis, equity investments, corporate issuers, fixed income, derivatives, portfolio managementPortfolio ManagementPortfolio management involves overseeing a set of investments, including securities, bonds, exchange-traded funds, mutual funds, cryptocurrencies, etc., on a personal or professional levelread more, alternative investments, wealth planning, etc.

Requirements

Before one fills up the application for the Chartered Financial Analysts program, one must fulfill one of the following requirements:

  • Have a bachelor’s degree or equivalent credential, orThe selected CFA exam date must be 23 months or less from the graduation examination date that the aspirants are about to appear for, and candidates must have received their bachelor’s degree before sitting for the CFA Level II exam, orPossess 4,000 hours of work experience and/or higher education involving a minimum of three years with the credentials acquired before the candidates sit for the Level I exam. The days of education and the days of work experience must not overlap.

Examination

The Chartered Financial Analyst exam comprises three levels:

  • When the aspirants fulfill the criteria mentioned above, they can apply for CFA Level I, a multiple-choice test. Once the candidates clear Level I, they appear for CFA Level II, Vignette-supported multiple choice questions. After clearing the second level, they appear for the Level III exam, a Vignette-supported essay type, and Vignette-supported multiple choice questions.

Candidates can register for the exam and schedule it on the official website.

Cost

Candidates must pay USD 350 as a one-time enrollment fee while registering for the CFA Level I examination. This charge will not apply to other levels of this exam. If one requires rescheduling the exam, an extra charge of USD 250 applies.

Jobs & Responsibilities 

As stated above, professionals with Chartered Financial Analyst licenses are trusted with assisting clients in making investment decisions. Investing is an essential affair in an individual’s life. A CFA lends hands to investors and ensures they have exposure to all aspects of an investment before deciding on an asset to invest in.

The roles of a Chartered Financial Analyst range from trading and asset management to developing and managing investor portfolios. The person also takes care of the proper regulation of the investment vehicles.

The niches and sectors where CFAs are employed include portfolio management, research and consulting, risk analysis and risk management, private wealth and asset management, etc. In addition, a CFA can be an investment banker, credit analyst, auditor, chief investment officer, etc.

Salary & Compensation

The compensation of a CFA varies in terms of employment, experience, specialization, and employment sector. However, the average base salary for a CFA is USD 126,000, leading to a total compensation of USD 177,000.

This article has been a guide to what is Chartered Financial Analyst (CFA). We explain its requirements, examination pattern, cost, jobs & responsibilities & salary. You may learn more from the following articles –

CFA is one of the most critical financial qualifications that one must need to have to enter the field as an analyst. However, when it comes to becoming a financial analyst, CFA is a desirable qualification in most financial organizations. In short, someone doesn’t need CFA certification to become a financial analyst.

Clearing CFA exams opens many doors for those who aspire to have well-reputed and well-paying jobs. Being a trustworthy individual for helping clients make wise investment decisions is a huge criterion. The charterholders prove to have the knowledge and skills required to undertake investment analyses and, based on the same, suggest to clients where to invest and when. This is what makes CFA a worthy certification.

First, the candidates must check if they fulfill the eligibility criteria to appear for the CFA exam. If yes, the next step is registering on the official website. The registration is done at a fixed cost and makes one eligible for the Level I exam. Once cleared, they would require appearing for the following two levels. After the candidates clear all the levels of the examination, they need to acquire the relevant work experience, submit referral letters and obtain a regular CFA membership.

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