The two most significant obstacles you’ll face on your quest toward earning the Chartered Financial Analyst (CFA) title are the CFA exam and the work experience requirement. The CFA exam contains three increasingly difficult levels and can take several years to complete, so it’s clearly a challenge. The work experience requirement is also quite strict. Learning more about the CFA exam pass rates helps you understand the nature of the CFA exam, but for now, we’ll focus on the work experience requirement. We’ll explain the qualifications for CFA-approved work experience and provide tips for proving you have such experience.
The criteria for work experience that meets the CFA requirement includes:
According to the CFA Institute (CFAI), a person must spend at least 50% of their work experience involved in the investment decision-making process and in work that informs or adds value to this process. This CFA Institute-provided list contains job titles typically considered relevant:
As you can see, this list refers to investments a few times. The CFA Institute defines investments as:
If you don’t hold one of these job titles, your work experience can still qualify if it satisfies one of these specifications:
As a CFA candidate, you must have at least 4 years of relevant working experience, which can be gained before, during, or after you pass the CFA exam. Only full-time positions count toward this work experience.
The CFA Institute asks candidates to include specific details about their jobs and responsibilities within their membership application. The Institute explains that you must describe your responsibilities for each position in order to prove that your work experience is valid. To assist you in this process, the Institute offers insight into the features of a good description. Each description must explain how your job duties relate to investment decision-making and in the process,
The Institute even provides examples of acceptable and unacceptable descriptions.
|Qualifying Description||Non-Qualifying Description|
|Example||“I prepare financial models based on reviewed information, analyze fundamentals, and value acquisition targets to provide recommendations to the investment committee.”||“I conducted an annual actuarial valuation process and benefit calculations.”|
|Why It’s Good||1. The applicant describes the types of independent analysis involved in this position.|
2. The applicant creates financial models and investment recommendations as work products that influence investment decisions.
|The applicant describes the types of independent analysis involved in this position.|
|What It’s Missing||Nothing! This is a good description of qualifying work experience.||This applicant needs to better demonstrate how the analysis created a work product that added value to the investment decision-making process.|
|Improved Description||This is a good description of qualifying work experience and doesn’t need improvement.||“I conducted an annual actuarial valuation process and benefit calculations which included performing projections, cash flow analysis, and durational analysis of individual health insurance policies. These analyses had a direct bearing on the investments chosen to back the reserves for these blocks of business.”|
Is there a way to verify your work experience before you take the CFA exam? Yes, having your work experience verified beforehand is possible. This process varies depending on your years of experience.
The CFAI can validate your experience prior to your passing the exam as long as you are a member. To become a member, you can either pass Level 1 or pass the Standards of Practice Exam. You can take this exam online and receive your results immediately.
The CFAI provides an online self-assessment tool that helps evaluate the relevancy of your work experience. It doesn’t spit out a definite yes or no answer, but it gives you a good indication of your status and reveals how you can work towards fulfilling the requirements.
If you hold the title of research analyst, portfolio manager, or any of the other position labels listed above, you are all set. A couple of standard descriptions of your role will be acceptable.
But for those of you with experience that may or may not seem relevant in the eyes of the CFA Institute, what can you do to convince them? Follow these steps:
In some cases, a job title says a great deal about the nature of your role. But in others, it doesn’t explain your duties and obligations nearly enough. If your job title is vague, it could betray the relevancy of your work, so shift your attention toward the activities associated with your position instead.
The job description section is very important to the CFA Institute. It should be equally important to you because it affords the opportunity to illustrate that function of your job is perfectly relevant even if the nature of your job isn’t.
As you’re crafting your job description, focus first on the work that fits the CFA criteria: that is, anything directly related to investment decision-making. Specifically, highlight the duties that closely relate to the Learning Outcome Statements (LOSs) of the CFA exam. We suggest referring to the Level 3 exam LOSs in particular.
Then, write about the indirectly related responsibilities, such as how the work supports and adds value to investment decisions. The research and analysis you did for clients or your team is a good example. Think creatively about how you’ve been helping your colleagues in their work.
Leave out other non-related tasks. You want to minimize the noise and distractions that irrelevant work may create. There is no need to list everything you do.
Just to be clear, managing your own investment portfolio is not permissible as CFA-approved work experience.
Approved work has to be full-time. Part-time jobs and internships don’t qualify regardless how glamorous or pertinent the work was.
The CFAI also asks you to submit 3 professional references, or just 2 if one of them is a CFA society member. Getting a society member to write the reference helps your case considerably. Ideally, this person is your supervisor or, at the very least, someone with whom you work professionally.
Yes. Denying an application is common if the applicant fails to state clearly how at least 50% of their role involves decision-making.
Working in operations or the middle/back office of a financial institution is an example of a borderline case. In these scenarios, spinning the job description the right way is even more critical. We do have readers who earned the CFA charter with a back-office role, so it is possible.
You will be classified as an affiliate member with a “charter pending” status. From this position, you can enjoy all the benefits of CFAI membership except the right to vote.
From there, you can work towards getting into a role where your duties directly affect the decision-making process. Then, reapply after reaching the 48-month requirement. Good luck!
We hope this analysis gives you a better idea of how you can fulfill the CFA work experience requirements. Please let us know if you have any questions, or continue to learn more about the exam by discovering what the Level 1 exam covers, getting answers to CFA exam FAQs, or reading our recommendations for the best CFA study materials.
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