Why CFA is Important: 9 Reasons Why You Can’t Afford to Wait

Shares

What are the benefits of doing CFA, considering the time and effort you need to participate in the program?

5 CFA Benefits Important to Your Career

Among the countless finance degrees around the world, the Chartered Financial Analyst qualification has become the gold standard.” ~ Financial Times

Most people agree that the CFA designation is the most widely known and respected qualifications for finance and investment professionals. But why is this important to you?

1. The Most Prestigious Designation in Finance and Investment

why cfa is important

The CFA designation provides the most value for research analysts and asset managers — professionals involved in portfolio management, pension funds, hedge funds, fund of funds, as well as private banking and financial advisory.

For these professionals, the CFA title is almost a must.

At the same time, professionals who work with these finance people are also interested in the CFA charter to broaden their knowledge and help them stand out from their peers. These professionals include accountants, auditors, lawyers and senior management in operations.

According to CFA Institute statistics, these are the most popular career among CFA charterholders:

  • Portfolio managers: 22%
  • Research analysts: 15%
  • Chief-level executives: 7%
  • Consultants: 6%
  • Corporate financial analysts: 5%
  • Financial advisors: 5%
  • Relationship managers: 5%
  • Risk managers: 5%

2. The CFA Curriculum Fills the Holes of Your Finance Knowledge

If you’ve made a decision to aim for a long-term and successful finance career, taking the CFA exam and studying the curriculum is an excellent way to ensure strong knowledge base and technical skills.

The CFA program is designed to cover everything — I mean everything that is directly or indirectly related in the finance and investment field.

In Level 1, candidates must get themselves fully immersed in a huge range of topics, ranging from financial accounting, ethics, statistics to corporate finance, fixed income and alternative investments.

The base is so broad that no candidates are good in all of these topics.

I believe this is precisely the examiners’ goal to force accountants to learn about finance, and finance professionals to study accounting.

Once you reach Level 2, the curriculum gets into more detail and slightly more specialized in finance topics. In Level 3, it becomes very specialized in half of the syllabus on portfolio and wealth management. The exam also adds the essay format to ensure testing in a more thorough and deeper level.

Once you pass all 3 levels, the knowledge gives you the confidence to work towards expertise in your field.

3. The CFA Charter Provides Unique Networking Opportunities

0 ,000
charterholders
0
countries

There are now 128K CFA charterholders around the world in 145 countries.

Not only that CFAs can be found in all major cities around the world, CFA societies are present in more than 70 countries giving you an unparalleled network that you can leverage for your career.

There are job postings from CFA societies with companies specifically looking for charterholders. The success of landing this type of job is much higher.

Also, unlike the accounting qualifications that are more geo-specific (e.g. ACCA in UK and CPA broadly in the US), the CFA charter is truly global. When your work takes you from Mumbai to New York to London to Singapore, the value of your CFA designation remains the same.

4. You can Waive Licensing Requirements as a CFA

Because the CFA charter is globally recognized, 19 countries have waived part or all of the requirements as licensed professionals, mostly in the field of investment and trading.

5. Ticket to Work for Major Investment Firms

While no finance or accounting qualification can guarantee a job, getting the CFA designation helps to land you in some of the biggest player in the finance field.

The top employers of CFA charterholders are global investment banks, mostly in their asset management and research divisions, as well as the Big 4 accounting firms.

Top 10 Companies that Employ CFA Charterholders

Source: CFA Institute

If you aspire to work in these companies, the CFA designation will give you a distinct advantage in your interviews.

6. CFA Charterholders Enjoy Higher Salaries

Part of the reason is that many CFA charterholders are hired by global financial institutions which tend to pay at a premium.

But then, even if you work in boutique shops and small specialty hedge funds, as long as your firm values the CFA charter, you will be given better projects and consequently better pay.

If you are looking for hard statistics, the CFA Institute used to run annual surveys on CFA salaries, but they stopped 10+ years ago given the numerous factors that may affect the salary level across members.

In any case, according to the last CFA salary survey in 2005, the premium was substantial at 54%:

 US$ CFA charterholdersNon-holders
 Annual median salary $180,000 $116,850

3 More Reasons Why Not Getting the CFA Designation May Hurt You

Here are the more pressing reasons on why studying for CFA is a good idea — now:

The Fear of Being Left Behind

If you are working in the investment industry, not have the CFA designation puts you at distinct disadvantage. There were 85K CFA charterholders in 2003. There are now 128K charterholders and 200,000+ candidates working hard towards the designation.

At the same time, passing rates are stagnant at a low level. If your current or future position requires this title, should you get this done now or wait?

It’s Harder to Pass This Exam When You Get Older

Your “booksmartness” starts to depreciate the day after graduation. The longer you procrastinate the study, the harder for your brain to adjust to the study mode. Physically your body can’t stand as many late nights as before. Also, when you have a wife/husband, a kid, another on the way, a house with a mortgage, and a yard to mow every week… it’s going to be even tougher.

If you plan to take the CFA exam sometime in your career, you should take it as soon as you can.

It’s Arguably More Cost-Effective than an MBA

Many professionals pick CFA because they don’t want to incur the time and cost to go through an MBA. This is understandable as the CFA investment will cost you anywhere from US $3,000 to $9,000. While expensive, it is still much more affordable than a typical MBA program.

Adding to the fact that you can continue working and earning while taking the CFA exam, the difference in terms of cost is even bigger.

MBAs are great for networking and for breaking into certain industries. However, for certain career paths, CFA is more useful than an MBA, especially if you cannot get into first-tier MBA programs.

Why CFA is Important to YOU?

Whether it’s the pull or push factors that lead you to thinking about this designation, it’s worth doing more research to make up your mind once and for all.

Here is a summary in video format:

If you are ready, here are the next steps:

Can We be More Helpful?

To learn about how to study and pass the CFA exam in the most efficient manner, check out our e-course for CFA Level 1, which is completely free. You can learn about the e-course here or sign up directly below.

  • Meghan D says:

    Hello! Currently, we do not have an opportunity for a guest blogger, but if we do find the need, we will definitely reach out 🙂

  • Rahul says:

    Hi John, Stephanie,

    Greetings of the day. Well i am working for an IT company for past 5 years now. I am looking to change my field from technology to finance domain, so that i can fetch some job related to Business Analyat or consultant or any finance related job.
    Is CFA a valid option for me. Can u also suggest some other certification which i should go for.
    Thanks in advance.

    • John / Stephanie says:

      Hi Rahul, if it is finance, it’s worth a try taking a closer look. You might want to borrow a book in introductory finance and see if the materials are at least somewhat interesting to you. You don’t need to understand them at this stage, of course, but if you don’t click with what’s discussed there, probably not a good idea to jump into finance / CFA exam.

      Another thing you might want to check out is the opportunity for someone with dual IT/finance background. I am sure there is quite a bit, but if it is possible for you to arrange an internal transfer, it would be the best way to make the transition. Good luck and let us know how it goes!

  • naru says:

    hi
    john/Stephanie
    I am just landed into banking job in india .
    whuch courses are there for me so that u can earn well.I am thinking to prepare for cfa is it a wise decision to go for it or should u go for something else

  • Rajiv Sagar says:

    Hi John / Stephanie,

    I been part of Asset Management Company for last 10 years, however I have always handles the back office operations, Fund Accounting and Fund Operations (Hedge Funds and Mutual Funds).

    I am confused whether I should take CFA or CPA to add just not the knowledge but also an edge in my career. Since I am middle management level . What would you suggest?

    Appreciate your thoughts and advise.

    Thanks & Regards
    Rajiv

  • Maddy says:

    Exactly!
    I’m into equity relationship service.
    Just wanted to Check if this experience would be treated as a prerequisite for being a cfa charterholder(in lieu of the 4 years experience).
    Regards.

  • Maddy says:

    Hi,
    I am a B.Tech and i have pursued my PGDM in Finance.I am currently working as a Equity Research Advisor-HNI for a reputed stock broking firm in India.
    What career prospects would i have after becoming a CFA.

    Regards

    • John / Stephanie says:

      Hi Maddy, CFAs work in a wide spectrum of professions as you will see from the link below:
      https://ipassfinanceexams.com/cfa-jobs-careers/

      But portfolio management and equity research (sell-side) are the most popular.

      Sounds like you are more of a relationship manager (i.e. as an advisor to clients, rather than on the product side)? You can move towards the investment product side with CFA if you are interested. If you like to stay as an advisor, having a CFA does help in the eyes of sophisticated clients who knows about the CFA title. Hope it helps! Stephanie

  • tara says:

    eligiblity for cfa..?

  • Tushar Ghosh says:

    Sir, I have completed graduation from Patna university with distance. And I have graduation certificate but I got marks in graduation 57%. However, I am student of ca ipcc .so is it ok for cfa

    • John / Stephanie says:

      Hi Tushar, as long as you pass and graduate with good standing from your university, the marks shouldn’t be an issue. Regards, Stephanie

  • Tushar Ghosh says:

    Hi I want to know am I eligible for cfa because I have completed my graduation from distance.so please suggest me.

    • John / Stephanie says:

      Hello,
      It should be ok as long as you have proof of graduation certificate and/or your transcript. Regards, Stephanie

  • >

    Save up to $300 on Wiley CFA Courses!  ​