The CFA program is designed to create a higher standard in the financial industry in terms of competence and ethics among other things. In case you did not know, CFA stands for Chartered Financial Analyst and was instituted in 1963. There are now close to 100,000 CFA charterholders around the world. There are many advantages to passing the CFA title but here are a few of the main ones:
-Gives charter holders instant recognition
-Is recognized around the world
-Will open doors to many of the top financial jobs
Requirements to Enroll
In order to get the charter, here are the main requirements:
-A bachelor’s degree (or the equivalent)
-Passing the 3 levels of the CFA exams
-Adhering to the strict CFA ethics and guidelines
What are these exams?
The exams are in English only, and start off as multiple choice exams except for level #3 which requires some longer answers. The exams are given everywhere in the world on the same dates:
Level #1 – June & December
Level #2 – June
Level #3 – June
As you can imagine, the quickest path is doing Level #1 in December, followed by Level #2 the following June, and Level #3 the next year.
What is covered in the CFA?
The CFA, as you can imagine, is very broad. You are combining ethics, quants, economy, asset valuation, derivatives, and even portfolio management. The biggest challenge becomes learning a lot about so much information rather than understanding everything perfectly. I’ve always felt as if passing a CFA exam would be the same as doing an exam that covered 6-7 courses in school. It can become overwhelming without a plan and that is one of the main reasons
How difficult are these exams?
They are very difficult and the passing rates for each level are always close to 50%. While it’s easy to blame the low passing rate on level #1 on the fact that many get involved without clear dedicated, the fact that so many fail levels #2 and #3 is proof of how challenging this exam is. The truth is that the large majority of involved candidates abandon it before getting to the end of the program and you will need dedication and a lot of hard work if you want to get through the CFA program. There is no sense in trying if you are not going to dedicate yourself.
How much work is involved?
This is a very difficult question to answer and it depends on every individual. There are many different strategies to pass the exams and some succeed with 300 hours of studying over 6 months while others put less hours but over a short period of time towards the end. I’ve always personally felt like more time and intensity in the last few weeks and months was the key for me and I’d rather spend more time in the final weeks than spreading over twice that amount of time. We are all different and while I will certainly be making the case for my study methods, I do understand that there are an infinite number of ways to get it done; it’s about knowing yourself, having a clear plan, and following up on that plan (adjusting if necessary).
How do I sign up?
Signing up is actually fairly easy. You can simply visit the official CFA Institute website and sign up. You will of course need to pay enrollment fees and provide some information about yourself.
How should I prepare?
That is precisely the question that I will be answering over the next few months on this website. Be sure to sign up to our mailing list:)