Note: CFA Institute has announced that Investment Foundations program will stop accepting new registrations on 17 December 2021, with the final exam delivered in mid June 2022.
Did you know that CFA Institute has a lesser known, global investment certification that is completely free, fully-online, requiring only 100 hours of study with a relatively high pass rate? 😲
Assuming it is suitable for your career situation and objective, it is something you can even register for right now, study and complete the online exam from the comfort of your own home.
Curious about the CFA Investment Foundations Program? Read on to find out more!
- What is CFA Investment Foundations Program (formerly Claritas)?
- CFA Investment Foundations In A Nutshell
- Pass Rates & Difficulty
- Topic areas, weightings and curriculum PDF Downloads
- Exam fees & costs
- Exam schedule & key deadlines
- What are the requirements for Investment Foundations Program?
- Benefits of the CFA Investment Foundations Certification
- Investment Foundations vs IMC: What Is The Difference?
- Investment Foundations vs CFA: Which is right for you?
What is CFA Investment Foundations Program (formerly Claritas)?
Awarded by CFA Institute, the CFA Investment Foundations Program is a free yet comprehensive online certification that provides a fundamental understanding of the global investment industry.
Originally launched in 2013 as Claritas Investment Certificate (and later renamed), this self-study course is specifically designed for all professional disciplines outside of investment roles, such as IT, HR, operations, accounting, legal, administration, marketing.
In fact, the Investment Foundations certificate was launched to fill a gap in the industry. For every investment decision maker, there are 9 other people working alongside them coming from different disciplines.
This group of professionals may not have had any formal investment training, but would greatly benefit from some foundational investment knowledge in their day-to-day role – non-investment decision-makers need to know their stuff too!
To date, there are more than 25,925 Investment Foundation Certificate holders from more than 100 countries. The program has received solid feedback so far from candidates and employers, with:
- 93% of certificate holders stating that they have gained a clearer understanding of the investment management industry;
- 87% of certificate holders indicating that they would highly recommend the program to others;
- 98% of managers (who manage certificate holders at a major asset management firm) would recommend the program.
CFA Investment Foundations In A Nutshell
CFA Investment Foundations is a free online certificate program designed to equip non-investment decision makers with a solid foundation knowledge in investment management.
Examples of the target group ideal for this certification are financial services industry professionals working in IT, HR, legal, marketing, operations, administration, accounting and more.
- It is administered in English and all its contents are offered online globally through CFA Institute’s digital learning platform called Learning Ecosystem.
- This course is made up of 7 modules, covering the industry’s purpose, ethics and regulation, tools and building blocks, investment securities, industry structure, risk management and client needs.
- It requires around 100 hours of study, for a single online exam that consists of 100 multiple choice questions in 100 minutes.
The Investment Foundations exam can be taken online once certain conditions are met, and within 6 months of the registration date.
Once the exam is completed, preliminary results are provided instantly. Upon successfully passing the final examination, candidates can claim a digital badge and a print certificate.
Pass Rates & Difficulty
According to UK NARIC (National Academic Recognition Information Centre of the United Kingdom), the Investment Foundations Certificate is benchmarked as a Level 3 qualification under UK Regulated Qualifications Framework (RQF).
This means that in terms of difficulty, Investment Foundations qualification is comparable to post-secondary education training or specialised secondary level education (e.g. ‘A’ Level).
As an introductory course into investment management for non-investment decision makers, Investment Foundations is unsurprisingly relatively easier compared to other financial designations such as CFA, CAIA, FRM.
Here’s a quick summary comparing other financial qualifications’ difficulty under RQF (with PhD programs being Level 8 as a benchmark):
|Qualification||Comparable UK RQF Level||Difficulty Equivalent to|
|CFA Investment Foundations||Level 3||Post-secondary education training or specialised secondary level education (e.g. ‘A’ Level)|
|Investment Management Certificate (IMC) and Certificate in ESG Investing by CFA UK||Level 4||Certificate of Higher Education, or the first year of a Bachelor’s degree|
|CFA Level 1||Level 5||Diploma of Higher Education|
|CFA Level 2||Level 6||Bachelor’s degree|
|Certificate in Investment Performance Management (CIPM)||Level 6||Bachelor’s degree|
|CFA Level 3||Level 7||Master’s degree|
|Financial Risk Manager (FRM)||Level 7||Master’s degree|
In addition to the (zero) fees, what makes Investment Foundations certificate really attractive is the relatively high pass rates.
82% of the candidates passed the first Claritas exam, and CFA Institute expects the CFA Investment Foundations’ pass rates to be around 60-85% on average.
Topic areas, weightings and curriculum PDF Downloads
The investment Foundations Certificate does a great job in covering a breadth of topics in 7 modules that serves as a good overview of the investment industry.
The topics areas, in-depth description and exam weights are as below:
|CFA Investment Foundations Topics||Description and Curriculum PDF Downloads||Weighting|
|Industry Overview||This chapter gives a broad overview of the financial services sector, in particular the investment industry.It focuses on how the investment industry works, its participants and the benefits it brings to society when done well and ethically.|
Chapter 1: The Investment Industry: A Top Down View (PDF download)
|Ethics & Regulation||This module explains why the investment industry is built on ethics and regulation and their benefits. It focuses on ethical framework, regulatory processes and consequences of regulatory failure and unethical behavior.|
Chapter 2: Ethics and Investment Professionalism (PDF download)
Chapter 3: Regulation (PDF download)
|Inputs & Tools||This is an important chapter explaining how the (economic) world works, on a micro and macro level.Candidates will learn about microeconomics, macroeconomics, international trade, financial statements and quantitative concepts.|
Chapter 4: Microeconomics (PDF download)
Chapter 5: Macroeconomics (PDF download)
Chapter 6: Economics of International Trade (PDF download)
Chapter 7: Financial Statements (PDF download)
Chapter 8: Quantitative Concept (PDF download)
|Investment Instruments||This module provides a good introduction to the key asset classes: equities, bond (fixed income), derivatives and alternative investments. |
Chapter 9: Debt Securities (PDF download)
Chapter 10: Equity Securities (PDF download)
Chapter 11: Derivatives (PDF download)
Chapter 12: Alternative Investments (PDF download)
|Industry Structure||This chapter delves deeper into the first topic’s introduction. It looks at how industry helps us invest, who the participants are and what they do, the different markets where investments take place, and the investment products themselves.|
Chapter 13: Structure of the Investment Industry (PDF download)
Chapter 14: Investment Vehicles (PDF download)
Chapter 15: The Functioning of Financial Markets (PDF download)
|Serving Client Needs||This topic is all about the process of understanding your client’s circumstances and investment needs, so their investments can be managed and allocated in the right way.|
Chapter 16: Investors and Their Needs (PDF download)
Chapter 17: Investment Management (PDF download)
|Industry Control||The final module focuses on risk management, performance evaluation and other control processes that are key to the smooth running of the investment industry.|
Chapter 18: Risk Management (PDF download)
Chapter 19: Performance Evaluation (PDF download)
Chapter 20: Investment Industry Documentation (PDF download)
Exam fees & costs
The CFA Investment Foundations Certificate is online and completely free, including the curriculum. 😲
Although there is a limited range of third party study materials, using the curriculum itself is sufficient to pass the exam within 6 months.
If it is suitable for you and fits your career objectives, it is an unbelievably good value-for-money course to complete to boost your CV. All you need is an internet connection to register and start studying now!
Exam schedule & key deadlines
As it is an online-only program, candidates can sit for the Investment Foundations exams throughout the year, once certain conditions are met (see below).
Upon registering for the program at CFA Institute, you must meet the following in order to unlock the final exam:
- Wait 30 days from the time of registration
- Achieve 70% or better on Mock Exam A
- Achieve 70% or better on Mock Exam B
Exam registration limits and number of attempts:
- Candidates have 180 days (6 months) from date of registration to complete the exam.
- Each registration allows 2 attempts to pass. The exam can be repeated without re-registering as long as it is within the 180-day window.
- Candidates can only register twice in a 12-month period.
So this means the fastest time one can complete the Investment Foundations certification is in 1 month, and that there is a maximum of 4 attempts per year.
What are the requirements for Investment Foundations Program?
Given its objective and target audience, the Investment Foundations Certificate is open to all, with no education or experience requirement.
The course is really approachable and designed for the many different people in the financial services industry who are not directly involved in analysing or making investment decisions, with no prior knowledge assumed.
Candidates who successfully pass the online exam can claim a digital badge and earn the CFA Institute Investment Foundations Certificate.
Benefits of the CFA Investment Foundations Certification
Given CFA Institute’s brand cachet and Investment Foundations’ international recognition, this qualification can be particularly useful for:
- Financial services professionals working in middle or back office, or even lawyers working with financial services clients, who would find the knowledge base beneficial for their day-to-day role.
- University students or fresh graduates (with or without finance background) looking to explore a career in finance. This could be a low cost and effort way to learn about the investment industry for free, whilst obtaining a certification that could set you apart from the rest. It could also serve as a stepping stone for other higher level, financial designation such as CFA, FRM or CAIA once you’ve gained a few years working experience in the sector.
By completing and earning the Investment Foundations Certificate, you can expect to:
- Lead with confidence and work better with your colleagues and clients
- Gain a fundamental framework and knowledge of the investment industry
- Improve your job performance by gaining an understanding of common global industry standards
- Differentiate yourself and stand out in a competitive global job market
Investment Foundations vs IMC: What Is The Difference?
There is often confusion between Investment Foundations Certificate and IMC (Investment Management Certificate), of which the latter is a threshold qualification for aspiring financial services professionals run by CFA UK.
Let’s clarify this: the key difference is target audience and to a lesser extent, geography.
In short, IMC is UK-only, more regulatory-focused and intended for people who work in front office (involved in investment decision making).
On the other hand, Investment Foundations is more suitable for people who work in the middle and back office and even in related industries like professional services (e.g. lawyers working with financial services clients).
Here’s a quick summary table comparing Investment Foundations vs. IMC:
|CFA Investment Foundations||Investment Management Certificate (IMC)|
|Geographical focus||Global||Global (with remote-proctoring)|
|Objective||To provide an accessible, foundation-level program for anyone wishing to enter or advance within the investment management industry. To supply successful candidates with a common understanding of industry structure and terminology, regardless of job function or geographic location.||Designed as the benchmark entry-level qualification into the UK investment profession.Delivers the threshold competency knowledge required by investment practitioners involved in portfolio management, research analysis, and other front office investment activities.|
|Topics Covered||The Investment Foundations syllabus consists of 7 modules covering the essentials of finance, ethics and investment roles. More details here.||IMC covers topics including economics, accounting, investment practice, regulation, and ethics.The content is global, with the addition of a distinct chapter on UK taxation.|
|Target Audience||The course is designed for professional disciplines outside of investment roles and requires no prior educational or industry experience.|
Candidates are typically drawn from areas such as operations, administration, IT, HR, marketing, sales, PR, compliance and customer service.
|Often sat by university graduates and entry level professionals in the investment industry.|
Pursued by individuals across all areas of the investment sector and over half of candidates are actively involved in front office investment activities including portfolio management, research, investment consulting, risk management and relationship management.
Most investment firms ask their employees to take the IMC to demonstrate the competency of their front office staff to the regulator.
Investment Foundations vs CFA: Which is right for you?
As you may know, the CFA charter is a Master’s degree equivalent designation that focuses more on portfolio management at its highest level.
On the other hand, Investment Foundations is a free, online certification equivalent to “A Level” that focuses on a foundational knowledge in investment management suitable for non-investment roles.
Both qualifications are quite distinct in its objectives, therefore we hope the answer is clearer here:
- If you’re looking into a career that analyzes or makes investment decisions, such as wealth or investment management industry, then the CFA charter is the right one for you. The CFA charter will also benefit any financial services professional role.
- If you’re looking into this to learn more about the investment industry, but would perform a role supporting the industry (such as in IT, HR, legal, operations, marketing etc), the Investment Foundations Certificate is better suited for you.
Here’s a quick summary comparing both qualifications:
|CFA Investment Foundations||CFA Program|
|Suited For||Non-investment decision making roles associated with the finance industry, such as IT, HR, legal, operations, customer service, accounting etc (typically middle or back office).||Finance professionals in a role that makes or advises investment decisions (typically front office)|
|Entry requirements||None. This course is designed to be accessible to all.||Have a bachelor’s degree; or|
Final year undergraduate of a bachelor’s program; or
Have a combination of college degree and full time work experience that totals 4,000 hours.
|Number of Exams||1 (fastest route is in 1 month, must be passed within 6 months without re-registering again.)||3 levels (fastest route is in 18 months, although the average is 4 years to complete)|
|Exam Frequency||Online exam can be done anytime all year round.|
Maximum 4 attempts a year.
|From 2021, CFA exams will transition to computer-based testing for all levels with increased frequency:|
Level 1: 4x a year, in Feb, May, Aug and Nov.
Level 2: 2x a year, Feb and Aug.
Level 3: 2x a year in May and Nov.
|Exam Format||100 multiple-choice questions in 100 minutes||Computer-based exams from 2021 for all levels:|
Level 1: Multiple choice questions
Level 2: Item set questions (multiple choice)
Level 3: Item set and constructed-response questions
|Topics studied||7 modules, focusing on ethics, and a high-level overview of the financial and investment industry. |
Non-technical, no calculations required.
|10 topics per level, with in-depth focus on ethics as well as technical coverage of the majority of investment instruments. |
Definitely has calculations involved.
|Pass Rates||60%-85%||The range of CFA pass rates since 2010:|
Level 1: 22%-43%
Level 2: 39%-47%
Level 3: 46%-56%
|Fees and Costs||$0, completely free (including curriculum)|
|– One-off Enrollment Fee: $450|
– Registration fee (per level): $700-$1,000
– Retakes: same as registration fee
Total CFA exam minimum cost: ~US$ 2,600
|Study Hours Needed||100 hours||At least 300 hours per level|
|Post Exam Requirements||To become an Investment Foundations certificate holder, all you have to do is pass the online exam to claim your digital badge and printed certificate.||To become a CFA charterholder:|
– Pass all the 3 levels of CFA exams;
– 4 years of qualified investment work experience;
– Submit reference letters for 2-3 professional references;
– Become a regular member of CFA Institute;
– Adhere to CFA ethics and professional conduct.
Overall, the Investment Foundations certificate provides financial services professionals working in non-investment roles a great opportunity to upgrade their knowledge base about the global investment industry. It offers an unbeatable value as it is a free, high quality online certification with global recognition that requires relatively low time investment.
So if you’re currently student, working in an investment-supporting function, or just aiming for a career in investment management in general, CFA Investment Foundations can be a cost effective way to add a valuable credential to your CV.
Any questions? Let us know in the comments below!
Meanwhile, you may find these related articles in our Beginner’s Guide series of interest:
- IMC (Investment Management Certificate): A Beginner’s Guide
- What is CFA Exams? A Beginner’s Guide
- CAIA (Chartered Alternative Investment Analyst): A Beginner’s Guide
- FRM (Financial Risk Manager): A Beginner’s Guide
- Certificate in ESG Investing: A Beginner’s Guide
- Sustainability & Climate Risk (SCR) Certificate: A Beginner’s Guide