What is a Chartered Financial Analyst?

Chartered Financial AnalystTaking your finance career to the top in today’s competitive business world often now involves becoming a Chartered Financial Analyst (CFA). The Chartered Financial Analyst is a prestigious certification credential offered worldwide to experienced financial and investment professionals. It’s granted through the CFA Institute, which is a global professional association consisting of over 100,000 finance gurus across 135 countries. Becoming a CFA certifies that financial analysts have the in-depth knowledge of investments and securities necessary to add value to their organization and the greater economy. Even though it’s not required, the CFA is one of the world’s most highly regarded credentials for enhancing credibility in finance. Let’s take a closer look at what you can expect from being a Chartered Financial Analyst.

Reasons to Get a CFA

Many financial analysts return to school for an MBA, but some argue that earning the CFA credential is more valuable. Firstly, it’s a cheaper alternative because the three tests only cost up to $1,500 each, which is much lower than MBA tuition. It’s easier to study for the CFA tests while working full-time than attending college classes every week. Chartered Financial Analysts need to adopt important skills needed for Wall Street to pass the tests. A higher salary is another major benefit since those with a CFA make a median pay that’s $27,000 more than finance professionals with only an MBA. Last, but not least, the CFA credential provides global recognition of your thorough grounding in finance.

Steps to Become a CFA

Becoming a Chartered Financial Analyst isn’t for the faint of heart because only about 35 percent of test takers pass the first exam. Earning a CFA will require that you pass three levels of examinations sequentially, according to the CFA Society. Applicants must have a bachelor’s degree in finance, at least four years of professional work experience, or a satisfactory combination of the two. Level I exam tests basic knowledge on investment tools. Level II exam requires more complex analysis in valuing assets and securities. Finally, Level III exam synthesizes all analytical methods involved in effective portfolio management and wealth planning. The CFA Institute advises candidates to study at least 300 hours for each segment of the exam with practice tests and study guides.

CFA Career Opportunities

Many employers will prefer candidates with the CFA for fulfilling their company’s senior-level management positions in finance. The majority of professionals becoming Chartered Financial Analysts work within portfolio management. That being said, CFAs can also use their fine-tuned financial skills as financial analysts, risk managers, investment bankers, accountants, finance managers, private bankers, stock brokers, securities traders, asset managers, auditors, and financial consultants. Around seven percent of CFA professionals have obtained chief executive roles as CEO or CFO too. Since the Chartered Financial Analyst is a qualification of long-term prestige, it’ll open doors of opportunity in virtually any money-related profession.

Related Resource: Become an Actuary

Overall, the CFA is considered the gold standard of excellence in financial and investment management that can be used to advance into executive-level roles. Obtaining your CFA is no easy feat though, because the self-study program usually takes at least three years, according to Investopedia. If you’re looking to earn the CFA, choose a business school that incorporates the CFA curriculum to begin your preparation. Investing your time into being a Chartered Financial Analyst can pay off with lucrative job offers, improved marketability, and long-lasting career success.