Did you know that besides the CFA program, CFA Institute also offers a free CFA Investment Foundations program?
Many potential candidates get confused between the two qualifications, so we thought it may be helpful to put together a proper comparison guide to help you decide between CFA Investment Foundations vs CFA Program.
Let’s dive in!
- What is the CFA Investment Foundations Program?
- What is the CFA Program?
- How difficult is CFA Investment Foundations vs CFA?
- CFA Investment Foundations vs CFA: Summary Table
- CFA Investment Foundations vs CFA: Which is right for me?
- Can I take the Investment Foundations certificate, then CFA Level 1 later on?
What is the CFA Investment Foundations Program?
The CFA Investment Foundations Program is a free, fully-online certificate program. It covers the essentials of finance, ethics, and investment roles, providing a clear understanding of the global investment industry.
The Investment Foundations Program is targeted at anyone who works in association with the finance industry, who wants to better understand the investment management industry.
For more details about the Investment Foundations Program, check out our comprehensive CFA Investment Foundations beginner’s guide.
What is the CFA Program?
The Chartered Financial Analyst (CFA) Program is a professional, masters-degree equivalent credential offered by the CFA Institute. It gives you expertise and real-world skills in investment analysis, and has become a gold standard in the finance and investment management industry.
We’ve written a lot about the CFA program, check out these articles to learn more:
- What is the CFA Exam? A Useful Beginner’s Guide
- 7 Benefits of the CFA Charter You Should Know
- Is CFA Worth It?
How difficult is CFA Investment Foundations vs CFA?
All hail our famous finance certifications’ difficulty comparison chart 🙂
As you can see, CFA Investment Foundations is equivalent to UK’s “A-level” (similar to US’ Advanced Placements, i.e. AP exams).
On the other hand, getting a CFA Charter is a Master-degree equivalent program.
Even comparing CFA Investment Foundations vs CFA Level 1, CFA Level 1’s difficulty is comparable to a diploma.
In short, CFA program is more difficult than Investment Foundations (hence the name!).
CFA Investment Foundations vs CFA: Summary Table
We have compiled and condensed the key differences between CFA Investment Foundations vs CFA from various aspects – this should help inform your decision if you’re still undecided!
|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, with May and Aug in 2021, and 2022 onwards Feb and Aug.
Level 3: 2x a year in May and November.
|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: 36%-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.
CFA Investment Foundations vs CFA: Which is right for me?
This is hopefully fairly straightforward.
If you’re looking into a career that analyzes or makes investment decisions, such as the 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. You can check out the typical career path of CFA charterholders to have a sense of future job opportunities.
If you’re looking into this to learn more about the investment industry, but would perform a role supporting the industry (such as in HR, Legal, Marketing and so on) rather than making direct investment decisions, the CFA Investment Foundations Program is better suited for you.
Can I take the Investment Foundations certificate, then CFA Level 1 later on?
Well, there’s nothing to stop you from doing so, but it probably wouldn’t make much sense.
The Investment Foundations Program is meant to only give a very broad overview, and is for people who work with finance professionals that want to find out more about what the hell they’re up to.
If you’re serious about taking the CFA Charter, there’s no reason to take Investment Foundations (no, there’s no value to it as a ‘warm up’ topic). Just go for CFA Level 1!
Hope this helps you decide which path you’re going to take! If you have more questions, just comment below and I’ll try to help 🙂
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