The Chartered Financial Analyst® (CFA) credential or designation regarded globally as the Gold Standard of investment management and research is a professional credential offered internationally by the United States-based CFA Institute to investment professionals who have successfully completed the requirements set by the CFA Institute which include: pass 3 rigorous 6-hour exams; have 48 months of qualified work experience; adhere to the CFA Institute Code of Ethics and Standards of Professional Conduct; and become a member of the CFA Institute and apply for membership to a local CFA member society. The program is widely acclaimed to be grueling and requires a significant dose of focus, perseverance and energy to pull through. It takes four years on the average to complete the CFA® Program. According to CFA Institute, there are currently over 120,000 CFA Charterholders globally.
The top employers of CFA Charterholders and CFA candidates include JP Morgan Chase, PricewaterhouseCoopers, HSBC, Bank of America Merrill Lynch, UBS, Ernst & Young, RBC, Citigroup, Morgan Stanley and Wells Fargo.
Salary of CFA Charterholders
According to compensation research firm, PayScale, the table below shows the compensation of CFA Charterholders in US compared to the MBA.
|Degree and Certifications||Average Pay (0 – 5 Years of Experience)||Average Pay ( 10+ Years of Experience)|
|CFA and MBA||US$87,200||US$148,000|
|CFA and No MBA||US$72,900||US$132,000|
|MBA in Finance and No CFA||US$63,100||US$119,000|
|MBA and No CFA||US$57,700||US$105,000|
A CFA Charterholder with no MBA that has up to 5 years’ experience earns on the average 25% more than an MBA without a finance background and this difference surprisingly holds up even with over a decade of experience that we expect that experience should matter more.
Occupation of CFA Charterholders and CFAI Members
According to the CFA Institute, the popular Job Titles of CFA Charterholders and members are as shown below.
|Corporate Financial Analyst||5%|
The curriculum is drawn from a broad-based set of skills and topical areas referred to as the Candidate Body of knowledge established by the CFA Institute which include Ethical and Professional Standards, Quantitative Methods, Economics, Financial Reporting and Analysis, Corporate Finance, Equity Investments, Fixed Income, Derivatives, Alternative Investments, Portfolio Management and Wealth Planning. Full grasp of this body of knowledge is tested in three successive levels:
The Level 1 emphasizes a basic knowledge and grasp of investment tools, and inputs used by investment management professionals
The Level 2 focusing on much more complex analyses emphasizes application of basic inputs in asset valuation
The Level 3 focuses on the synthesis of inputs and analytical models from previous levels for effective management of equity, fixed income, and derivative investments portfolios and other investment strategies of individuals and institutions.
CFA Pass Rates
It is generally acknowledged that the CFA exams are rigorous and demand dedication, focus and the ability to endure pressure. Pass rates vary from year to year. On the average, about 1 in 5 (that is 20%) pass all three levels in one attempt. It takes on the average 4 years to finish all three levels. Recent 10-year average pass rates for level 1 is put at 39%, 44% for Level 2 and 53% for Level 3. This is obviously a screening process at every stage that is aimed at producing the very top and best candidates at the end. The statistics show that dedication, focus and passion for Investment management and finance are significantly required to pull through the program.
More information about the CFA® Program can be found on the CFAI website at www.cfainstitute.org
CFA Vs. MBA
This is a common question, however the table below clarifies the key differences:
|Skills Set||Finance and Investment Skills||General Business Management Skills|
|Key Courses||Equity, Derivatives, Fixed Income, Corporate Finance, Portfolio Management, Quantitative Analysis, Ethics, Alternative Investments, Economics, and Financial Reporting and Analyses.||Human Resource, Marketing, Finance, Operations Management, International Business etc.|
|Mode of Study||Self-Study||Classroom-taught|
|Levels/Time Required||3 Levels (1.5 to 4 years)||2 Years|
|Cost||$3,300 to $5,500 Excluding private tuition||$60,000 to $100,000|
|Study Hours||300 Hours/Level on the Average||2 Years|
|Jobs/Industries||Investment Management & Research, Financial Services||All Industries: Technology, Finance, Energy, Media, Public Sector, Manufacturing, etc|
|Completion Rate (Start to Finish)||20%||About 90% Excluding Acceptance Rate|
|Perception||Rigorous and Grueling||Fairly Demanding|
At Finance Analytics Group, you will be mentored by a team of tutors who are CFACharterholders and have gone through this journey before and are in a better position to lead you.