How to Become a CFA

Written by: Nik Ventouris

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How to Become a CFA

Considering a career in finance and investment? Our article on “How to Become a CFA,” outlines the steps to achieve this prestigious designation.

From understanding the rigorous CFA exam process to fulfilling the necessary work experience, this comprehensive guide offers essential insights for aspiring Chartered Financial Analysts.

Keep reading to explore the requirements and benefits of becoming a CFA today.

Becoming a CFA

Obtaining a Chartered Financial Analyst designation is no small feat. It’s a globally recognized professional certification provided by the CFA Institute that verifies the competency and integrity of financial analysts.

It’s widely regarded as the top honor in the investment management profession, often opening up vast opportunities in the world of finance. We’ve broken down the steps to becoming a CFA below.

Step 1: Understand the Entry Requirements

In order to become a Chartered Financial Analyst (CFA), you’ll need to ensure that you satisfy all of the necessary prerequisites.

These include having a bachelor’s degree or being in the final year of your degree program. The flexibility of the CFA means your degree could be in any field, from finance and economics to arts or science.

Keep in mind that even if you don’t hold a bachelor’s degree, the CFA Institute offers an alternative entry point through a blend of professional work and academic experience that totals four years (e.g., two years of education and two years of professional experience, etc.).

Note: This experience does not have to be related to the finance or investment fields.

For more information on these requirements, have a look at our in-depth What is a CFA overview.

Step 2: Enroll in the CFA Program

Once you’ve ascertained that you meet the entry requirements, the next step is enrolling in the CFA Program. The Program includes three distinct levels:

  • Level 1: Level I focuses on developing a strong foundation in ethical and professional standards while introducing you to investment tools. It’s the first of the three steps to become a CFA
  • Level 2: Level II takes you further into the world of a financial professional, providing a deeper understanding of asset valuation and risk types
  • Level 3: Level III rounds off the program by exploring portfolio management, as well as financial reporting and wealth planning in greater depth. This is the final academic hurdle you’ll need to clear to qualify as a CFA

Note: Each level requires you to pass an exam before you can register for the subsequent level, so remember to prioritize your studies accordingly.

Step 3: Prepare for the Exams

Now comes the challenging part — the CFA exams.

On average, CFA candidates spend around 300 study hours preparing for each level of the exam. While this may sound overwhelming, it’s important to remember that these are spread over several months. A disciplined and consistent approach to studying can therefore make this process a lot more manageable.

We recommend employing a diverse range of study materials in order to aid in your preparation. The official CFA Program curriculum, study guides, practice exams, and additional resources available online from various publishers are all incredibly beneficial.

Additionally, you should consider joining a study group or finding a mentor. Such collaborative efforts can not only offer motivation but also provide unique insights that enhance your understanding of the more complex concepts.

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Interested in commencing your CFA studies? We recommend having a look at Kaplan’s in-depth study materials.

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Step 4: Pass the Exams

The CFA Program consists of three levels, each ending with a rigorous six-hour exam divided into morning and afternoon sessions. These exams challenge your understanding, application abilities, and analytical skills, and thus can act as a significant hurdle in the overall certification process.

Pass rates for each level usually range from 40-50%, which acts as a testament to the difficulty of the exams.

Having said that, you should keep in mind that re-taking an exam is always an option, and so you should do your best to stay resilient and put in continuous effort even if you do not pass on your first attempt.

Step 5: Acquire Relevant Work Experience

Earning the CFA charter isn’t just about passing exams; you will also need to accumulate four years of professional work experience in a role related to the investment decision making process.

The flexibility here is that you can gain this experience before, during, or after your engagement with the CFA Program.

Step 6: Apply for the CFA Charter

With the exams behind you and the necessary work experience under your belt, you’ll be on the home stretch. You will then be able to apply for the CFA charter by following these two steps:

  • Submitting an application to become a regular member of the CFA Institute: This process includes providing references from colleagues or supervisors who can testify to your professional competence and integrity
  • Complying with the CFA Institute’s Code of Ethics and Standards of Professional Conduct: As a CFA charterholder, you are expected to uphold the highest standards of ethical conduct

If you’re interested in how you can prepare for these rigorous exams, be sure to check out our Mock Exam CFA Level 1 article.

Is the CFA Worth It?

As you now have a clear roadmap for becoming a CFA, you may find yourself wrestling with the following critical question: Is it even worth it?

Undoubtedly, becoming a CFA will demand a significant investment of time, energy, and financial resources. However, many candidates find that this rigorous journey brings considerable benefits, especially if you have well-defined career ambitions in finance.

Below, we’ve broken down the various benefits and opportunities that relate to holding a CFA charter:

  • Global recognition: The CFA charter is a globally recognized credential. Many employers around the world view it as a credible testament to an individual’s competency in investment analysis and portfolio management. Achieving a CFA charter can often mean better job prospects, along with increased chances for career advancement, in fields such as investment banking, portfolio management, and risk management
  • Enhanced knowledge and skills: The CFA Program doesn’t merely give you a stamp of qualification. It’s a respected testament to your knowledge and skills. The curriculum is meticulously designed to provide a broad knowledge base in major areas of finance, which can go a long way in developing well-rounded finance professionals
  • Networking opportunities: Being a CFA charterholder can also give you access to an impressive network. As a member of the CFA Institute, you become a part of a global community of more than 170,000 professionals, which can help you network and potentially lead to new job opportunities
  • Increased earning potential: The CFA charter can also lead to higher earnings. The CFA Institute estimates that charterholders generally earn significantly more than their non-charterholder counterparts. Keep in mind that exact earnings depend on numerous factors (e.g., location, role, years of experience, etc.)
  • Improved ethical awareness: The CFA Program places a heavy emphasis on ethical and professional standards, which are key to maintaining integrity in the finance industry. As a CFA charterholder, you will be more attuned to the ethical considerations in finance. This can help you make more responsible decisions in your career and contribute positively to your organization’s reputation
  • Personal accomplishment: Last but not least, earning the CFA charter is a significant personal accomplishment. The rigor and determination required to achieve it bring about a tremendous sense of satisfaction and confidence. It’s a testament to your dedication, resilience, and commitment to the field of finance

All in all, becoming a CFA is a challenging yet rewarding path, demanding extensive study, a series of rigorous exams, and relevant work experience. The journey may be tough, but the rewards — in terms of career prospects, professional growth, and personal achievement — can be well worth it.

Ready to get started? StateRequirement recommends having a look at Kaplan’s study materials and resources.

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How to Become a CFA FAQ

How long does it take to become a CFA?

Becoming a Chartered Financial Analyst (CFA) typically takes about 3 to 4 years. The process involves passing three levels of exams, each requiring extensive study. Additionally, candidates must have relevant work experience, often demanding a minimum of 4,000 hours. For more information, have a look at our What is a CFA page.

What qualifications do you need to be a CFA?

To become a Chartered Financial Analyst (CFA), candidates must have a bachelor’s degree or equivalent work experience, complete the CFA Program, and pass three levels of exams. You will also need to have accumulated 4,000 hours of work experience, which can be done before or after you pass your exams.

What is a CFA?

CFA, or Chartered Financial Analyst, is a globally recognized credential awarded by the CFA Institute. It represents an individual’s proficiency in high-level financial analysis and emphasizes a strong commitment to professional integrity. In order to obtain a CFA certification, you will need to take and pass three distinct exams.

Is the CFA harder than the CPA?

The difficulty of achieving the CPA or CFA designation largely depends on your familiarity and comfort level with the topics covered. However, CFA has a lower pass rate and covers a wider range of subjects compared to CPA, so some may consider it more difficult. Interested in finding out more? Have a look at our CFA Level 1 Mock Exam article.

What is a CFA salary?

In the United States, graduates of a Chartered Financial Analyst program typically earn between $70,000 and over $150,000, depending on factors like experience and location. If you’re on the path to becoming a CFA, our CFA Level 2 mock exam article can help you prepare and potentially increase your future earning potential.

Is it better to get a CFA or MBA?

The answer depends on your career goals. If you’re interested in a wide range of business fields, an MBA could be more suitable. But if you aim to specialize in finance, investment analysis, or portfolio management, a CFA could be the better choice. For more detailed information on each of these points, see our How to Become a CFA article.

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