5 Reasons to Become a Chartered Financial Analyst (CFA)

If you’re pursuing a position in investment management, you’ve probably heard of the Chartered Financial Analyst (CFA) designation. Maybe you suspect that this designation could enhance your investment management career, but you don’t know exactly how. Or maybe you have yet to see the point of earning the CFA. If you’re looking for reasons to take the leap into the CFA designation process, learn more about the benefits of becoming a Chartered Financial Analyst.

What Is the Chartered Financial Analyst Designation?

The Chartered Financial Analyst (CFA) designation is considered the highest distinction in the investment management industry. The CFA Institute (CFAI) has accredited and conferred over 15,000 people to be analysts.

Essentially, CFA charter holders are avid investment managers with excellent real-worldportfolio management skills. Additionally, CFAs uphold the highest standards ofintegrity and ethical responsibility.

The CFAI offers the CFA at the graduate level. To confirm that candidates possess the appropriate levels of knowledge and skill, the CFAI has created the CFA exam. The CFA exam consists of 3 tests, called levels. Once you pass all these tests, you can then apply to become a Chartered Financial Analyst. Then, you’ll enjoy the following benefits.

Why Should You Become a Chartered Financial Analyst?

1. Better Job Prospects

Though certain line items on a resume don’t guarantee a job in a particular firm or organization, having the CFA significantly boosts your financial credentials. Many employers are aware of the time and discipline earning the CFA requires of individuals. Therefore, the designation confirms that individual’s commitment to the industry. Furthermore, several studies demonstrate that most financial analysts develop a strong work ethic and analytical ability as a result of completing the CFA program.

2. Preference over the MBA Program

If you’re trying to decide between the CFA and the MBA, you’ll be happy to hear that the CFA program is more cost and time effective than your standard MBA program. Enrolling in an MBA program from a top-tier university is usually pretty expensive. On average, an MBA can set you back over $100,000. In contrast, costs for the CFA program often range between $2,400 and $12,000. Factors that influence CFA fees include the time of registration, the number of exams you take, and the price of your study materials.

While it may be erroneous to compare the CFA and MBA directly, it is worth noting that the CFA is more advantageous for some specific career paths. These occupations include investment banking, stockbroking, and portfolio management. So, in such cases, becoming a Chartered Financial Analyst (CFA) is more beneficial than graduating from an MBA program.

3. Credibility and Industry Respect

The finance industry greatly values the CFA because the people within this industry are well aware of how rigorous the CFA program is. Therefore, the CFA has an exemplary status when compared to financial courses offered in various undergraduate and postgraduate programs. As these institutions of higher learning can be plagued with numerous cases of misconduct and a lack of standards during examinations, the extensive regulation of the CFA program elevates the CFA designation to a higher level of credibility. At one point, the Financial Times even declared the CFA to be the gold standard for financial analyst qualifications. Therefore, nothing really compares to the amount of respect the CFA garners.  

4. Increased Networking Opportunities

CFA Institute is a global society whose members come from all points of the globe. By joining such a society, you increase your contact with people from different organizations, cultures, and viewpoints. Consequently, you can expand your resource pool to include a greater variety of professionals. Similarly, interacting with individuals who hold the same work ideologies as you increases your chances of landing your dream position.

5. Exposure to a Variety of Roles in Finance

According to the CFA Institute, Chartered Financial Analysts have plenty of vocational options. Some key positions for which CFAs qualify include:

  • Relationship Manager
  • Research Analyst
  • Corporate Financial Analyst
  • Financial Advisor
  • Equity Researcher
  • Portfolio Manager
  • Risk Manager

Once they complete such an exhaustive study of investment management and pass exams with in-depth coverage of all the relevant topics, CFAs are prepared for any financial position, no matter how demanding it maybe.  

What Are the Requirementsfor Becoming a Chartered Financial Analyst?

Clearly, becoming a Chartered Financial Analyst is a great career move. So, how exactly do you earn the designation? Along with passing the CFA exam, you must also meet the following CFA requirements.

  • Education Requirement

The CFAI expects CFA candidates to have at least a bachelors degree before taking the Level II exam. However, you can apply to the CFA program while in your final year of your undergraduate program (or an equivalent program).

Alternatively, CFA candidates can have 4 years of professional work experience before they take the Level II exam. Or, they can have a combination of work experience and education that totals at least 4 years. Candidates must also have finished these 4 years prior to enrollment. And, part-time positions do not count toward your 4 years of work experience.

  • Experience Requirement

The CFAI also requires future CFAs to have no less than 4 years of professional experience in the investment decision-making process. CFA candidates can accrue their work experience before,during, or after they successfully complete the CFA program.

  • Other CFA Requirements

Additionally, all CFA candidates must also satisfy these minor program requirements.

  1. Have a valid international travel passport.
  2. Have sufficient knowledge of the English language, as all exam questions are in English.
  3. Ensure your country of residence participates in the program. There are some countries and states in which a citizen can not become a Chartered Financial Analyst.  
  4. Complete a Professional Conduct statement form to verify your compliance with the professional conduct admission criteria.  

What’s Next in the Process of Becoming a Chartered Financial Analyst?

As you can see, once you’ve passed the CFA exam, becoming a Chartered Financial Analyst (CFA) is quite doable. You simply need the necessary education and work experience. And, this information is good to know because the CFA clearly gives you an edge over non-charter holders. If you’re convinced the CFA is the designation for you, take the next step by learning more about how to become a CFA and about the CFA study material you’ll need to pass the exam.

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