CFA Careers: 5 Things to Know
Are you thinking of your next career move? Most business graduates pursue an MBA degree in higher education, but that has become too mainstream. Nowadays, people are looking for more specialized qualifications to help them climb up the career ladder. Lately, CFA has come into the limelight. Every person wanting to have a career in finance is considering enrolling in this program.
In the last 30-40 years, the expansion of financial services has contributed to CFA’s charter’s rise as an industry gold standard. Even now, every top investment bank and accounting firm uses the CFA qualification as a quality indicator in every recruitment decision. So, why not become a CFA? It will equip you with expert-level financial knowledge. From portfolio management to corporate banking – you will become a master of finance.
However, the study material is thorough and the courses challenging. Hence, applying all the concepts under pressure andinformation overload can be challenging. But, on the contrary, that also means you will havesolid financial knowledge and credentials, improving your job prospects. So, before you call the shot, let us show you the ropes.
Here are five things you should know about CFA careers.
1. Program Details
Do you have any idea how the program works? Unlike conventional degrees, it doesn’t follow a semester system; instead, it has three levels. Every candidate has to clear all three levels to qualify as a CFA. Let us explain this in detail.
Level I CFA: The first level focuses on investment tools. The entire learning curriculum focuses on learning and comprehension. Besides going through books, you can go through Wiley CFA prep material to grasp the concepts. It also consists of past papers, including 240 multiple-choice questions. All these are split among 3-hour sessions, and luckily, there is no negative marking for wrong answers. The exam only takes place in June and December.
Level II CFA: The second level focuses on Asset management, and the entire learning curriculum lies on application and analysis. Students have to learn the concepts and apply them to real-world scenarios. The exam consists of 120 multiple choice questions with no negative markings. The level II exam only takes place once a year in June.
Level III CFA: The third level is all about portfolio management, and the learning focus is on synthesis and evaluation. It is the most crucial stage, and the passing rate remains at an all-time low. The exam consists of 8-12 essay questions, and this exam is conducted in the morning. After which, an exam consisting of 10 multiple choice questions is conducted in the afternoon. The candidates have to appear in both exams on the same day.
2. Eligibility Criteria
Once you are aware of the program, the next step is to see if you are eligible to take the exam or not. The eligibility criteria are as follows:
- Every candidate appearing for the exam must have a valid international travel passport.
- Every candidate must hold an undergraduate degree,bachelor’s or equivalent. Students can also be in the final year of an undergraduate program when registering for the exam.
- If not an undergraduate degree, the candidate should have four years of professional work experience. Remember, part-time jobs do not qualify.
- Every candidate must become a member of the CFA Institute. In addition, you have to pay a one-time enrollment fee and register yourself for the firstlevel.
3. CFA Exam Cost
The overall cost of CFA depends on the prep material you choose and the number of exams you are taking. Roughly, it will range from $2,600 to $8,000. $2,600 is the early registration fee for all three levels, but it would only be valid if you pass all three levels in one go. Likewise, $8,000 assumes standard registration and third-party study materials.
If you don’t want to pay altogether, you can pay the one-time enrollment fee of $450 for the level I exam. After that, you will have to pay the exam fee of $700 if you register early. Remember, the fee will go up to $1000 as the exam date approaches—moreover, rescheduling an exam costs $250. The fee structure for other levels is similar; hence, always register early for the exam if you wish to save a few hundred bucks.
4. CFA Exam Topics
In total, there are ten exam topics which include:
- Derivative Investments: Students must understand derivatives and how they work.
- Alternative Investments: A relatively minor topic in which students learn about non-standard features of alternative investments.
- Fixed Income Investments: It covers fixed income securities, risk factors, and other drivers.
- Portfolio Management: Students have to learn about risk management, portfolio planning, and construction.
- Ethics: All candidates must explain the need for high ethical standards in the investment industry.
- Quantitative Methods: Students have to explain and demonstrate the use of elementary stats.
- Economics: It covers macro and microeconomic principles.
- Financial Reporting and Analysis: Itcarries a weightage of 13%-17%. The course covers the analysis of financial statements.
- Equity Investments: Candidates must demonstrate knowledge of equity investments, indices, and security markets.
- Corporate Finance: Students should know how to evaluate a company’s corporate governance and capital budgeting schedule.
The level I and II exam tests candidates on all ten topics, which means you will have extensive course material. You no longer have to study quantitative methods, financial reporting and analysis, and corporate finance in level III.
5. Job Prospects
It is crucial to understand the roles you will be rewarded with after certification. After qualifying as a CFA, you can become a portfolio manager, financial advisor, research analyst, or risk manager. Most people hop into investment banking since it yields lucrative returns, but the field isn’t restricted. You can explore your interests in different industries and opt for a career that best aligns with your goals. Moreover, the CFA certification has worldwide recognition. Hence, you can look for jobs anywhere and settle wherever you please.
People who want a purely financial career prefer doing CFA. However, most people don’t know what they are signing up for. CFA is unlike any other standard degree program. In addition to being technical, the course material is comprehensive. Thus, you have to be a finance enthusiast to jump on this bandwagon. Also, understand the career prospects and exam details to ensure you are the right fit for this career.