What are the benefits of doing CFA, considering the time and effort you need to participate in the program?
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?
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:
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.
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.
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.
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.
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.
Top 10 Companies that Employ CFA Charterholders
If you aspire to work in these companies, the CFA designation will give you a distinct advantage in your interviews.
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%:
|Annual median salary||$180,000||$116,850|
Here are the more pressing reasons on why studying for CFA is a good idea — now:
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?
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.
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:
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.
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