Some brands tell you immediately what they are when you hear their names. For example, the name Netflix tells you “prominent streaming service and content provider,” while Coca-Cola signals “leading soft drinks and beverage company.”
Now, don’t you wish something about your name will immediately tell people what you are, particularly your skill sets and expertise? Well, if you are an investment management professional, sign up for that CFA course and become a chartered financial analyst.
Once you are a CFA charterholder, you won’t need to say anything to tell people about your particular expertise. That CFA designation after your name will do all the talking for you.
How do you earn a CFA designation? Read on to find out.
Eligibility Requirements
To become a CFA charterholder, you will need to enroll in a CFA program, pass three CFA exams and fulfill other requirements. The following are the CFA enrolment eligibility requirements.
1. Education
To enroll in the CFA program, you must satisfy one of the following conditions:
Holder of a bachelor’s degree
If you have a bachelor’s degree with proof of the same, you can register for the CFA program.
Undergraduate student
You may apply to join the CFA program if you are, at most, 11 months away from graduation (and thus a bachelor’s degree conferment). You must have a bachelor’s degree before taking your CFA Level II exam.
Have professional work experience
If you don’t have a bachelor’s degree or are not gaining one anytime soon, you may still enroll in the CFA program as long as you have 4,000 hours of professional work experience accumulated in three years or longer.
Professional work experience, in this context, can be a combination of hours spent working for pay and hours spent in higher education. However, the inclusive dates for actual paid work and higher education cannot overlap.
Paid work experience can qualify even if it’s not investment-related. However, it must be something that requires business skills and the application of high-level judgment.
2. International Passport
CFA candidates must have an international travel passport before registering for any CFA exam.
3. English Proficiency
English is the medium of the CFA exams. You will need to be proficient in English to sit for CFA exams.
4. Professional Conduct
CFA candidates must conduct themselves in a manner becoming of a CFA charterholder. Applicants to the CFA program are thus required to fill out a professional conduct statement form. CFA applicants are expected to divulge any incidents, investigations, and proceedings related to their professional conduct in the PCS form.
5. Country of Origin
Applicants to the CFA program must come from a country where the CFA Institute is allowed by U.S. law to do business or provide its services.
Steps to Obtaining a CFA Charter
To become a CFA charterholder, you will need to do the following:
1. Pass the 3 CFA Exams
There are three CFA qualification exams: CFA Level I, CFA, Level II, and CFA Level III. Each higher-level exam requires passing the lower-level exam that immediately precedes it. For instance, you will need to pass your CFA Level II exam to sit the CFA Level III exam. Only after passing all three exams can you become a CFA charterholder.
CFA Level I Exam
The CFA Level I exam takes place in two sessions of 135 minutes each. It covers a total of 180 multiple-choice questions, with 90 questions per session.
CFA Level II Exam
The CFA Level II exam is also split into two sessions of 132 minutes each. Vignettes will be given, followed by four to six multiple-choice questions that you must answer based on the accompanying vignette.
The CFA Level II exam has 88 questions, split equally between the two sessions, and each one is worth three points.
CFA Level III Exam
The CFA Level III exam is also divided into two sessions of 132 minutes each.
The first session will consist of eight to 11 vignettes, each accompanied by questions that may require selecting an answer from multiple choices, writing an essay, or providing a numerical response (with or without space to show work).
The second session consists of vignettes, each one followed by four to six multiple-choice questions for a total of 44 questions, each of which is worth three points.
CFA Exam Curriculum
Each level of exam corresponds to a clear-cut curriculum. However, all exams touch on specific portions of the following functional areas:
- Alternative Investments
- Corporate Issuers
- Derivatives
- Economics
- Equity Investments
- Ethical and Professional Standards
- Financial Statement Analysis
- Fixed Income
- Portfolio Management and Wealth Planning
- Quantitative Methods
2. Acquire Relevant Work Experience
While studying and sitting for the CFA Level exams, you should also complete the required hours of relevant work experience.
To become a charterholder, you must have done at least 4,000 hours of work in the field of investment decision-making or an area that “informs or adds value” to this process. Employment as an analyst in an investment and capital market services firm should help fulfill this work experience requirement.
Additionally, you must have acquired 4,000 hours of work experience in a period no shorter than 36 months.
You can include past professional experiences in your computation of work experience hours. However, they must be relevant to investment decision-making.
3. Submit References
You will need to provide either two or three professional references. Two references will suffice if at least one is an active member of the local CFA society to which you are applying. Otherwise, you will need three professional references.
4. Apply to Become a Charterholder
Once you have fulfilled all the requirements — you passed the CFA exams, have acquired all 4,000 hours of relevant professional experience, and have two or three professional references — apply for regular membership with the CFA Institute.
This entails applying for membership with a local CFA society.
Your application will be reviewed for around 10 business days, then passed on for review by the local society in which you are applying. Your local society may take one month to complete the review process.
If the CFA Institute approves your membership application, you will be notified. At this point, you will pay your CFA membership dues to activate your membership.
Painstaking, but Worth It
The journey to becoming a CFA charterholder is a long and difficult one. However, it is worth it. A CFA designation is the mark of an accomplished investment management professional, and it works so wonderfully well as a calling card and introduction. It tells people about your investment analysis and management prowess without you having to say anything.
AUTHOR BIO
Nikhil Vachani is Senior Tutor for Phoenix Financial Training, a leading provider of professional accountancy and finance qualifications throughout the Middle East and India as well as of bespoke finance courses to a wide and varied portfolio of corporate clients. Nikhil is a fellow member of the ACCA and UAECA and has 11 years of experience as a specialist trainer in the areas of Financial Accounting, Corporate Reporting and Taxation across all levels of ACCA.
