As financial markets evolve and the investment banking sector continues to grow, professionals with a chartered financial analyst (CFA) designation are in high demand. The CFA certification — recognized worldwide — is a testament to an individual’s comprehensive understanding of the complexities of financial analysis and investment management.
In this CFA Salary article, we are going to take a look at CFA charterholders salaries in each state and explore how the CFA designation can significantly boost your career trajectory in the world of finance.
Average CFA Salary
The average salary of financial analysts depends on several factors, such as their location, experience, and sector of focus.
Below we’ve broken down the average CFA salary in each state.
|State||Average Annual Salary ($)|
Recommended Study Materials
Interested in commencing your CFA studies? We recommend having a look at Kaplan’s in-depth study materials.
Alternatively, you can have a look at our What is a CFA overview for more information.
How to Become a CFA
In order to become a CFA charterholder, you’ll need to complete the following six steps.
1. Understand the Requirements
If you’re thinking of becoming a CFA charterholder, you need to ensure you meet this professional qualification’s minimum requirements. Here’s what you should have:
- A College Degree: If you’ve already earned a college degree, you’re good to go. You also can sign up if you’re just one year away from finishing your degree
- Work Experience: Don’t have a degree? No problem. You might still qualify if you’ve been working in the finance sector for a while. Any combination of school and relevant work experience that totals at least four years will also suffice
- A Passport: This might sound odd, but you also need a government-issued passport. It doesn’t matter where you’re from; it’s just a way to verify who you are when you sit for the exams
So, make sure you meet these requirements before you dive into the world of the CFA certification process. Once you do, you can move forward on this exciting path.
2. Enroll in the CFA Program
If you’re ready to get started with the CFA journey, you should kick things off with these tasks:
- Set up your online account. Just like signing up for a new social media platform, you’ll need to start by creating an account. Go to the CFA Institute’s website and follow the steps to create your personal profile
- Pay the enrollment fee. After you set up your account, you’ll need to pay a one-time fee to join the CFA Program.
- Pick your exam date. Next, you’ll get to choose when you want to take your first exam. Just pick the date that works best for you
- Disclose any past issues. If you’ve ever had any issues at work or related to your profession (e.g., if an employer ever let you go from a job or if you ever faced any official complaints) you’ll need to disclose this information on your application
Once you tackle these simple steps, you’ll be on your way to getting a CFA certification.
3. Prepare for the Exams
The CFA exams aren’t something you can breeze through. They require a lot of dedication and studying. Here’s a brief overview of each level:
- Level I: Think of this as the foundational level, which covers a broad range of topics. It introduces you to the world of finance. You’ll learn how stocks and bonds work, the basics of accounting, and even some economic principles
- Level II: This level takes you beyond the basics, diving deep into the nitty-gritty details. You’ll look closely at financial reports, learn advanced ways to value companies, and figure out how global economies can impact investments
- Level III: This is the final — and toughest — level. Here, you’ll focus on how to actually manage money for others. This includes learning investment strategies, understanding how to minimize risks, and conducting financial planning for long-term goals like retirement. It’s not only about knowing the theories, but also how to use them in real-life situations
In addition to traditional studying, taking mock exams can be one of the most powerful tools in your arsenal for obtaining your CFA designation.
To learn more about how to use this tool to prepare for these rigorous exams, check out our Mock Exam CFA Level 1 article.
4. Pass the Exams
The CFA Institute structures its CFA Program in a way that ensures candidates gain a comprehensive understanding of finance and investment. Each level builds on the knowledge gained from the previous one, and the culmination of each level involves a challenging exam that assesses a candidate’s knowledge.
Here’s a brief overview of each exam level:
- Level I:
- Format: Multiple-choice questions
- Focus: The exam for this foundation level tests your knowledge of basic financial concepts. It’s about picking the right answer from the options given based on the situation described
- Level II:
- Format: Item set questions
- Focus: This exam poses questions based on short stories or financial scenarios. It asks you to analyze the data and information more closely.
- Level III:
- Format: Item set and constructed response questions
- Focus: The exam for this advanced level tests your expertise in portfolio management and wealth planning. You’ll not only need to analyze situations like you did in the Level II exam, but also write out your answers to show how you’d handle real-world financial situations
Note: Don’t forget that, across all of these levels, you need to know your stuff as well as apply your knowledge ethically in real situations. This means doing the right thing even when no one’s watching.
5. Acquire Relevant Work Experience
In addition to passing all the necessary exams, you’ll also need a minimum of four years of relevant, professional work experience to obtain the CFA charter.
This doesn’t necessarily mean four years post-exam because you can include prior work experience. This ensures that a charterholder brings both academic prowess and practical expertise to the table.
6. Join the CFA Institute
Once you pass all the exams and meet the work experience requirements, the final step is to become a regular member of the CFA Institute.
Membership not only allows you to begin using the CFA designation, but also provides access to a wealth of resources, continuous learning tools, and a global network of financial professionals.
Ready to get started? StateRequirement recommends having a look at Kaplan’s study materials and resources.
CFA Salary FAQ
Do CFAs make good money?
Yes. CFAs typically earn a substantial amount of money. Per the CFA Institute, the median annual salary for a chief investment officer is $177,000 with a base salary of $126,000. Keep in mind that the average pay can differ greatly due to a variety of factors, such as location, experience, and finance speciality. For more information, have a look at our CFA Salary page.
Is a CFA charter better than a CPA?
Which certification is “better” can depend greatly on an individual’s career goals; this is because the two designations cater to different areas of finance. A CFA charter is typically more relevant for those seeking a career in investment management, financial analysis, or equity research while a CPA designation is generally more suitable for individuals seeking careers in public accounting or corporate finance.
Is a CFA still prestigious?
Yes, the CFA designation remains prestigious and highly respected within the finance and investment industry, and can be used to indicate a high level of competency, ethics, and professionalism. Having said that, the exact value of a CFA designation for you will largely depend on your specific industry, work experience, and professional aspirations. For more information, check out our What Is a CFA article.
Is the CFA exam hard?
The CFA exam is considered tricky because it demands a comprehensive understanding of various aspects of finance, ethical standards, and quantitative methodologies. The Level II exam delves deeply into asset management and valuation, for example, and presents case-based questions that require a high level of application and analysis. To help you pass on your first time, make sure to check out our CFA Mock Exam Level 2 article.
What’s the average CFA salary?
According to data from the CFA Institute, the median total compensation for CFA charterholders serving as portfolio managers is $177,000 per annum, while the median annual salary is $126,000. Note: The average salary for chief financial officers can vary based on several factors, including experience, role specificities, and location.
If you’re interested in getting a CFA designation, check out our Mock Exam CFA Level 1 article.