What is CFA?

The Chartered Financial Analyst program commonly known as CFA course is the most decorated professional course offered by CFA Institute for finance and investment industry. It has the highest level of global legal and regulatory recognition of finance-related qualifications. CFA course incorporates financial analysis & investment management skills in the aspirants.

The course study includes in-depth learning about wide ranging subjects including but not limited to advanced investment analysis, equity investments, fixed income, derivatives, economics, ethics, portfolio management etc. A candidate has to pass three levels of exam namely Level I, Level II & Level III to get a CFA certificate. Once a candidate successfully completes all the levels & other needful requirements as per the Institute, he/she is awarded the “CFA Charter” and becomes “CFA Charterholder” .

Eligibility to enrol

To be eligible to pursue CFA program under CFA institute, below are the key eligibility criteria that every CFA aspirant shall fulfil:

  • Have an international travel passport AND,
  • Have a Bachelors (or equivalent) degree (undergraduate education) or the aspirant can be in final year too while registering for the exam OR
  • Have professional work experience of 4 (Four) years OR
  • A combination of both: Education and professional work experience that meets the minimum of 4 years.

Process of Registration or enrolment

Any CFA aspirant needs to follow below steps in order to register themselves for CFA program exam:

Step 1: To register oneself for the Level I exam, you need to create an account at the CFA Institute Website.

Step 2: The next step of registration involves fee payment. In case you are given a scholarship, the fees would be substantially reduced. You can explore more about the scholarship program on the CFA Institute Website. The exact amount of fee would depend upon the time of your registration. There are 2 registration fee deadlines, one being early birds and it amounts to USD 700 and the second is called standard which amounts to USD 1000.

Important Note: There is a one time enrolment/registration fee of USD 450 applicable when you register for your Level I exam, which is waived off in case of scholarship awarded by CFA Institute.

CFA Curriculum details

The CFA program is divided into 3 levels i.e. Level I, Level II and Level III.

Level I: Introduction to Equity, Fixed Income, Derivative etc. along with high regards to ethics. It also includes Detailed learning of tools like Financial reporting & analysis, Quants, Economics etc.

Level II: This level exam dives deeper into valuation of assets like Equity, Fixed Income and Derivatives. It also includes higher learning aspects of learning of tools like Financial Statement Analysis.

Level III: Last level study program emphasizes portfolio management, and includes descriptions of strategies for applying the tools, inputs, and asset valuation models in managing equity, fixed income, & derivative investments.

CFA Program Curriculum at Glance:

CFA Program Curriculum at Glance

Examination Details

Once the candidate has registered for the exam, he or she needs to schedule the exam date. The previous CFA regime did not have a system of online exams for all the Levels, but with changing time the CFA Institute has also changed it’s structure of examination from offline to completely online wherein exams at all the 3 levels would be conducted online. Let us understand the examination details about all the levels of CFA in detail:

Level I

  • Exam Month: February, May, August and November
  • Question Type: 90 Multiple Choice Questions (MCQs) each in morning & afternoon session
  • Duration: 2 hours 15 minutes per session.
  • General Passing Rate: 43-45%

Level II

  • Exam Month: May, August and November
  • Question Type: 44 multiple choice items based on caselet each in morning & afternoon sessions.
  • Duration: Approximately 4.5 hours split into two sessions.
  • General Passing Rate: 44-46%

Level III

  • Exam Month: May, August and November
  • Question Type: Essay + MCQ’s based on caselet wherein Morning Session includes 8 to 11 constructed essay type questions while afternoon session includes 44 Multiple choice items.
  • Duration: Approximately 4.5 hours split into two sessions.
  • General Passing Rate: 50-56%

Important Note:

  • There is no negative marking in any exam.
  • There is no limit on number of re-attempts but the exam fees needs to be paid separately for each attempt (fees being non-refundable)
  • After each exam administration, the CFA Institute Board of Governors sets the minimum passing score (MPS) for each level. The purpose for this approach is to ensure fairness to candidates across administrations as the difficulty of each test is taken into account when setting the MPS.

Study CFA in India vis-a-vis Study CFA Abroad

CFA is a legally recognized course and holds global accreditation in countries like the USA, Canada, Australia, India etc. CFA is not a local professional course, but a globally accredited & recognized program valid in 135 countries across the globe. The institute of CFA was established in 1947, which is headquartered at Charlottesville, Virginia, United States. So, the aspirant can choose the place from where he/she wants to appear for the exam. You can appear Level I in India and Level II & III from the USA. The finest aspect of the program is that all the study material of exams is provided online which can be downloaded free of cost from the institute website and physical copies too can be ordered by payment of additional amount. If not modules, there are a number of options available online easily to prepare for your exams, namely Schweser’s reference material, Irfanullah’s material and many other online + offline coaching centres aided with expert CFA faculties. The CFA program takes around 1.5 to 4 years for completion.

Scope of CFA & Salary of CFA

CFA is a program specifically crafted for candidates aspiring to be Financial Analysts & Investment Advisors. Enrolling in the CFA Program and earning the CFA charter prepares and positions you for a variety of career paths in the investment management industry. Widely considered the apex for professional development in investment management, the CFA designation is valued by employers for roles and functions in every sector of the global finance industry, including portfolio management, analysis, private wealth, and consulting. A CFA has the benefit of working in various fields like:

  • Portfolio management
  • Research
  • Consulting
  • Risk analysis and risk management
  • Investment strategy
  • Asset management
  • Private wealth management
  • Commercial banking
  • Investment banking
  • Insurance etc.

Top CFA recruiters may include HSBC, JP Morgan Chase, CitiGroup, Ernst & young, Pricewaterhouse Coopers, Crisil, Morgan Stanley, etc.

CFA charterholders can be found in a variety of roles across the investment industry. Therefore, compensation can vary based on job function and region. Compensation differs widely in the investment industry and is influenced by many factors, including the specific industry sector, an individual professional’s seniority and area of specialization, and broad regional differences, yet base compensation of CFA in USA may start from anywhere around USD $ 70,000 as per study while in India CFA salary may start from Rs. 4-5 lakh and may go upto Rs. 10-15-20-25-30 lakh & beyond.

Why & why not to pursue CFA

CFA charterholders are employed by top investment banks, asset managers and even accounting firms as discussed above. CFA charter demonstrates dedication, ability, analytical skills, and ethical grounding required for multiple roles. Considering above facts, reasons why you should go for CFA program, which may include below points but not limited to these:

  • Leading global accreditation & legal recognition.
  • Time & cost efficient as compared to other competitive programs.
  • Exposure in various finance related roles.
  • Makes your CV stand out and opens you up to various opportunities.
  • Great Scope & attractive salaries in India as well as abroad.
  • Chance to learn Big Data Analytics & Artificial Intelligence via CFA syllabus.
  • Higher Credibility, associated with greater industry respect.
  • Exposure to globe best practices of varied skills with high ethical values.

The CFA program may be a gold-standard for the Finance & Investment industry, but not a sure shot way of getting rich & earning success. Pursuing CFA would not be a solution to your every career related question, and would not guarantee a bright future. You must check the viability of CFA as your career with regards to the amount of time, money & energy to be invested for becoming a CFA and then make a rational decision. A recommended minimum of 300 hours per year over three years—or more is required for passing the Levels and if you fail and decide to re-take an exam, the exam fees worth USD 700 has to be paid again. You would have to prepare yourself to sacrifice your personal & social life for the program, still without the surety of actually earning the CFA Charter as the pass rates are not 100%.

Considering all the above facts, information & all the other details, the final decision upon venturing into the most sought after financial course or not should be an individual choice after checking all the related aspects.