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The 2 most significant obstacles you’ll face on your quest toward earning the Chartered Financial Analyst (CFA) charter are the CFA exam and the work experience requirement. The CFA exam contains 3 increasingly difficult levels and can take several years to complete, so it’s clearly a challenge. Additionally, the CFA 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 CFA work experience requirement. So, 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:
CFA candidates must prove that they have 4 years of work experience before they can earn the CFA charter. 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.
Furthermore, work experience should pertain to evaluating or applying financial, economic, and/or statistical data as part of the investment decision-making process. Additionally, work experience counts toward this requirement if candidates supervise employees who conduct the activities above.
Lastly, your work experience does not have to be continuous so long as you have 48 months of combined work experience. But, the work still has to be relevant, of course. Also, many candidates are thankful for the fact that the CFAI is not going to second-guess any employment gaps on their resume or CV.
However, it is important to note that both the CFAI and local CFA society to which you are applying need to approve your work experience.
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. However, only full-time positions count toward this work experience requirement.
For this reason, part-time positions or internships don’t count. And, non-professional experience (e.g., managing you or your family’s investment portfolios) also can’t satisfy the requirement.
The CFA Institute asks candidates to include specific details about their jobs and responsibilities within their membership application. The Institute also explains that you must describe your responsibilities for each position in order to prove that your work experience is valid. So, 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,
What’s more, the Institute even provides examples of acceptable and unacceptable descriptions.
|Qualifying Description||Non-Qualifying Description|
|CFA Work Experience 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.”|
So, is there a way to verify your work experience before you take the CFA exam? Yes, having your work experience verified beforehand is possible. Consequently, this process varies depending on the number of years of experience that you have.
In this case, the CFAI can validate your experience prior to your passing the exam as long as you are a member. Therefore, in order to become a CFA 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.
For candidates in this position, 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 does give 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, then you are all set. A couple of standard descriptions of your role will be acceptable.
However, you must objectively outline the ways in which your role facilitated the decision-making process. That’s because the CFAI may reject vague and incomplete job descriptions that do not show this contribution, even if your role was that of a financial analyst.
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. Therefore, if your job title is vague, it could betray the relevancy of your work. So, you must shift your attention toward the activities associated with your position instead.
The job description section is very important to the CFA Institute. For this reason, you should find it equally important because it affords the opportunity to illustrate that the function of your job is perfectly relevant even if the nature of your job isn’t.
So, 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. Also, you should 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. For example, you should mention the research and analysis you did for clients or your team. So, think creatively about how you’ve been helping your colleagues in their work.
Because your goal is relevancy, you should leave out other non-related tasks. By doing so, you can minimize the noise and distractions that irrelevant work may create. So, for this reason, you don’t need to list everything you do. The CFAI focuses only on your relevant work experience.
Just to be clear, managing your own investment portfolio is not permissible as CFA-approved work experience.
Approved work has to be full-time. Consequently, part-time jobs and internships don’t qualify regardless of how glamorous or pertinent the work was.
Additionally, the CFAI also asks you to submit 3 professional references. Or, you can submit just 2 if one of them is a CFA society member. For this reason, 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.
For some CFA candidates, acquiring the work experience the CFAI requires is the most difficult part in the entire CFA process. So, how can you get this experience? You can obtain all the CFA job experience you need by following these steps.
The fact that you are actively taking the CFA exam or have passed the CFA exam shows potential employers that you are committed to a job in finance even if you don’t have any previous finance job experience. For this reason, you should include your CFA exam status on your resume. Then, you can add details about your CFA exam experience as appropriate (e.g., how many sections you have passed, where you are in the process, etc.).
A front office position in which you aid traders in the decision-making process is a great first step towards a long-term career in finance. And, what’s more, this job totally counts toward the CFA work experience requirement. Additionally, other jobs you may want to consider are middle and back office jobs as well as research positions. In order to land any of these roles, you must ensure that your resume demonstrates your analytical and evaluation skills. So, consider providing employers with concrete examples of how you’ve applied these skills in the past.
Until you’ve landed a finance job that will enable you to meet the CFA experience requirement, you should network every day you can. You’ll need to make finding a finance job your top priority, especially if you’ve never had one before. Consequently, the more work and dedication you put into finding this job, the more likely you’ll be to get one that’s both a good fit for you and meets the experience requirement.
Yes. Denying an application is common if the applicant fails to state clearly how at least 50% of their role involves investment decision-making.
Possibly, if you work toward developing new products that add to the investment decision-making process. But if you instead work in an administrative position (e.g., managing employees who process the payroll), your work experience would meet the requirement.
Therefore, 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. However, 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. Then, 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. So, 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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