Chartered Financial Analyst

The Chartered Financial Analyst (CFA) credential is recognized around the world. Investment professionals who possess a CFA charter have demonstrated a broad range of skills, dedication to professional ethics, and diverse experience. Since 1963, the CFA charter has been conferred by the CFA Institute to international financial professionals who earn the designation through completing a rigorous education program, gaining necessary experience, passing examinations, and upholding the institute’s ethical and professional standards. Today, there are more than 95,000 CFA charterholders working in over 135 countries around the world.

Why Become a Chartered Financial Analyst?

Investment professionals holding a CFA charter may be interested in increasing their professional marketability and value in the eyes of clients and employers. Students planning to enter the financial investment professional career world often obtain the CFA charter to designate that they are a cut above their colleagues. Those changing careers may seek the CFA charter as a starting point in gaining the necessary education and skills to become an effective investment professional. Common job titles for those holding a CFA charter include Chief Executive, Consultant, Investment Banking Analyst, Research Analyst, and Portfolio Manager.

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Education for Chartered Financial Analysts

All Chartered Financial Analysts must complete a self-study graduate course of specialized education offered by the CFA Institute – the CFA Program Curriculum. Before one may enroll in the CFA Program Curriculum, a candidate must have completed one of the following:

  • Bachelor’s degree
  • Four years of qualified professional work experience
  • Combined four years of college education and work experience
  • Be in the final year of a bachelor’s degree program

Under the CFA Program, major topic areas and principles (the Candidate Body of Knowledge, or CBOK) are taught to students and may change over time. As of 2010, the areas include:

  • Ethical and professional standards
  • Quantitative methods
  • Economics
  • Financial reporting and analysis
  • Corporate finance
  • Equity investments
  • Fixed-income investments
  • Derivatives
  • Alternative investments
  • Portfolio management and wealth planning

The curriculum is designed around 18 study sessions, with sample and mock exams preparing the student for each of the three levels of examinations necessary to earn the CFA charter.

Certification for Chartered Financial Analysts

To become a Chartered Financial Analyst (CFA), one must receive certification from the CFA Institute. This involves passing three levels of examinations, and pledging to uphold the CFA Institute’s Code of Ethics and Standards of Professional Conduct. Each of the three exams takes six hours to complete.

  • Level I exam is multiple-choice and focuses on techniques and ideas applying to investment, valuation and portfolio management; fundamental ideas on asset classes, securities, and markets; and the CFA Institute Code of Ethics and Standards of Professional Conduct.
  • Level II exam consists of 20 item sets and focuses on asset valuation
  • Level III exam consists of item sets and essay questions and focuses on portfolio management.

Once certified, one must continue to adhere to the CFA Institute Code of Ethics and Standards of Professional Conduct and pay annual dues to remain a member of the CFA Institute.

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Salary and Employment Projections for Chartered Financial Analysts

Chartered Financial Analysts are employed by financial and investment institutions, securities corporations, banks and other financial services firms. According to the Bureau of Labor Statistics of the U.S. Department of Labor, financial analysts earned a median annual salary of $74,350 in 2010. Holding the CFA charter can increase an investment professional’s salary by $20,000 annually, depending upon one’s job title and employer. Job growth is expected to be greater than average for financial analysts from 2010 to 2020, at a rate of 23 percent. An additional 54,200 financial analysts are expected to be hired during that decade.