Those looking for an edge in the competitive world of finance should consider the benefits of obtaining the Chartered Financial Analyst (CFA) credential. Earning the globally-recognized CFA charter demonstrates a high degree of specialized knowledge and skills used in investment analysis and decision making.
The CFA credential is considered the gold standard in the field of investment management. Many CFA charter holders go on to have successful careers as portfolio managers or research analysts at hedge funds and private equity firms. The difficulty and low pass rate of the three required exams ensure that this qualification will remain a sought-after distinction in the future. We have compiled the following information to help you make the decision.
CFA Exam Registration
Several requirements must be met before candidates can enroll in the CFA Program and register for the CFA Level I Exam (the first of three separate, 6-hour exams). Prospective candidates must:
- Have a US bachelor’s degree or equivalent, or be in the final year of their bachelor’s degree program at the time of registration; or
- Have four years of work experience; or
- Have a combination of work and college experience that totals at least four years
- Be sure they understand the Professional Conduct Statement and Candidate Responsibility Statement
- Be prepared to take the exams in English
- Have a valid international travel passport (required for exam registration and admission to the test center)
After you have fulfilled the requirements above, you should create an account, and then enroll in the CFA program and register for an exam.
The CFA Certification
Those who meet all the certification requirements are referred to as CFA charter holders. To obtain the CFA charter, a candidate must:
- have completed a university degree (or equivalent)
- have four years of qualified, professional work experience
- agree to follow the CFA Institute Code of Ethics and Standards of Professional Conduct
- pass all three levels of the CFA exam
- become a member of the CFA Institute, and
- apply for membership in a local CFA society
The CFA exam tests a large curriculum that is divided into three separate levels. The three tests must be taken in order, and they can be taken as many times as necessary. The exams increase in complexity according to level. Level I tests basic knowledge of the standards and some analysis, Level II tests how to apply those standards to typical situations and involves more complex analysis along with valuing assets, and Level III tests how to synthesize and apply the standards in a portfolio management and compliance context. See more about the CFA exam here.
The Level I exam consists of two three-hour sessions that include 240 multiple choice questions based on the Level I Learning Outcomes Statements (LOS) developed by the CFA Institute.
The Level II exam consists of a 10-item set in the morning session and a 10-item set in the afternoon session of the exam. Each item set includes a case-statement and six multiple choice questions. Candidates must refer to the case-statement for information in order to answer six multiple choice questions correctly. There are a total of 120 multiple choice questions, as compared to 240 on the Level I exam.
The Level III CFA exam consists of essays in the morning session and item sets in the afternoon session. This exam has 10-15 questions that may have multiple parts. The Level III exam has a maximum score of 180 points.
The CFA Institute offers the Level I exam two times per year at test centers in many locations around the world. Although the Level I exam is held twice a year (June and December), the Level II and III exams are only held once a year in June. The CFA Institute recommends preparing for each exam at least 6 months in advance and studying for at least 300 hours for each level. It takes the average candidate 4 years to obtain the credential.
You must enroll as a CFA candidate and register for the exam in order to sit for it. Those who register early have the option of a discounted rate ($630 for Level I); those who register on time will pay more ($930), and those who register late will pay the most ($1,380). Enrollment and registration fees include access to some study and curriculum materials. You can also lower the overall cost of becoming a CFA through great discounts on the best study materials available.
Given the large curriculum and many preparation hours that are required to pass this challenging exam, candidates should seriously consider enrolling in a CFA exam review course. These courses can help identify strengths and weaknesses, provide opportunities for consistent study and completing practice questions, give candidates peer and/or instructor support, and result in a higher chance of passing each exam on the first try. Compare the different CFA study materials today and get started on your journey to becoming a CFA!