CFA - Chartered Financial Analyst

Chartered Financial Analyst (CFA®) charter is a designation given to those who have completed the CFA Program and completed acceptable work experience requirements.

To earn a charter, one must –

1. Pass 3-level CFA Exams
2. Achieve Qualified Work-experience
3. Submit reference letters
4. Apply to become Charter holder

CFA Exams are offered only in English. To register for the Level I CFA exam, the candidate must have an international travel passport and meet one of the following entrance requirements:

• Bachelor’s Degree

Completed a bachelor’s program and received a university/college degree

• Final-Year Student

Be within 11 months of graduation month for bachelor’s degree on the date of sitting for the Level I exam

• Professional Work Experience

Have a combination of 4,000 hours of work experience and/or higher education that was acquired over a minimum of three sequential years on the date of enrolling for the Level I exam. Dates of education and professional work experience cannot be overlapping.

Registering for the CFA exam is a two-step process. 

Step 1:  Enrol in the CFA exam through the CFA website – https://www.cfainstitute.org

Step 2: After a candidate completes the registration process and payment is processed, the candidate will see the “schedule your exam” option in the CFA Program profile. This will take the candidate to the Prometric scheduling tool where available testing centers with dates and times shall be mentioned. One must complete this step by the scheduling deadline.

• Access Scholarship
  • CFA Program enrolment fee is waived, and exam registration is reduced to US$400
• Students Scholarship
  • For students currently attending Affiliated University
  • Exam registration is reduced to US$600
• Professor Scholarships
  • Includes Professor and Regulator Scholarship
  • Exam registration is reduced to US$600

Some employers also provide financial assistance to their employees for participation in the CFA Program. For more details on scholarships, visit: https://www.cfainstitute.org/en/programs/cfa/scholarships

Each level of the CFA exam is based on the curriculum of the prior level which evolves in complexity. The exams cover the following topic areas:

Candidates can prepare for CFA exams either through self-study only or self-study plus coaching. Through coaching, candidates can benefit from extra exam materials and practice. Before selecting a coaching institute, candidates should the check quality of the instructors, whether they specialize in the topic areas, and confirm that the coaching institute will offer concept explanations, notes, practice questions that are consistent with exam question formats.

CFA Candidates are required to spend an average of 300+ hours for each level of the exam.

Some equations and calculations can be complicated in the CFA exam. Calculators come quite handy for them. However, CFA Institute follows a strict calculator policy. Only two calculator models are authorized for use during CFA® Program exams:

• Texas Instruments BA II Plus (including BA II Plus Professional)
• Hewlett Packard 12C (including the HP 12C Platinum, 12C Platinum 25^th anniversary edition, 12C 30th-anniversary edition, and HP 12C Prestige)

Both these models are widely available. Candidates can also order them on Amazon or Flipkart. Calculators are not available at the test center and candidates are also not allowed to borrow from or share a calculator with another candidate during the exam. Candidates should learn how to use calculators beforehand.

Which model to prefer?

It depends on preferences and comfort level. Most exam preparation providers focus on teaching how to use the TI BA II Plus model as it offers an algebraic operating system that allows one to enter numbers and combine operations into the calculator in a straightforward sequence as found in normal six-function calculators. TI BA II Plus model costs approximately ₹3,000.

Different types of organizations operate in the investment management sector. These include asset managers, asset owners, insurance companies, hedge funds, private wealth managers, private equity firms, investment banks, and brokerage firms. A wide range of job roles exist within these different types of organizations which are summarised as follows:

The compensation varies based on job function and region. Unlike other professional exams, 3 levels of CFA exams, however, carry their independent value as candidates can earn CFA® charter only after achieving 4,000 hours of relevant work experience.

In India average expected salary for a Fresher with Level I and/or Level II exams cleared, can range between Rs.4,00,000 p.a. to Rs.9,00,000.

Until FY 2019 (pre-pandemic), every year higher number of candidates had taken CFA exams with 3,54,300 (+11% y-o-y) CFA exam administrations in FY 2019 of which the Asia Pacific region constituted 56%.

India consistently remains the top 3rd country in terms of exam administrations, after China and US. In 2019, there were appx. 35,000 CFA exam administrations in India across three levels which was a 15% increase over 2018. There was a 25% increase in candidates in ‘18, 20%+ in ’17; 16%+ in ’16.

Clearly, CFA Program has been gaining interest amongst working professionals and students in India and worldwide. Even though CFA charter holders and candidates find jobs across different sectors in the finance industry, CFA is considered more suited for investment management and equity research roles. For Finance roles, it is also considered as an alternative degree to an MBA. Many MBA students across top colleges in India, however, take up level I or II exams, both from the perspective of gaining deeper knowledge about Finance as well as signaling to their prospective employers about their interests and understanding about Finance.

However, one has to note that there is no direct campus placement assistance by CFA Institute or CFA societies in respective regions, but placement opportunities for CFA candidates are generally considered higher as compared to students with graduation. Being an expensive program, as compared to other professional courses (CA, CPA, CMA, CS, etc.), and time involved in earning the charter, one should make itself aware of their interest, placement opportunities before enrolling in the course.