One of the most common questions we get here at 300 Hours from potential CFA candidates is: What is the CFA designation?
As this site is for potential candidates as well as for current candidates (and charterholders), it’s important for us to revisit the basics and understand what exactly is the CFA designation, how the exam process is like, and its history.
So what is the CFA charter, and what does it get you? We explore these and much more in this article.
The CFA charter represents one of the most (if not the most) widely recognised investment qualifications in the world. The CFA Program and Charter exists to maintain a standard of investment expertise and professionalism, and ensures a consistent set of standards is available globally in the investment profession. In other words, the CFA charter is a quality-control program, designed identify the best and give them its stamp of approval. And because the CFA charter is so widely known and acknowledged, a charterholder credibility is recognised almost anywhere.
Becoming a CFA charterholder, at its core, indicates that the CFA Institute acknowledges that you:
- Possess the expertise, knowledge and range of skills expected of a competent investment professional
- Know and adhere to a set of ethics and best practices set by the CFA Institute
These represent the two key aspects to the investment industry – that investment professionals know what they’re doing, and perform in a moral and ethical manner.
An Equivalent of a Master’s Degree
To register for the CFA Program and prepare for your first exam you first need to have one of the following:
- A bachelor’s degree, or in your final year of a bachelor’s degree
- 4 years work experience
- 4 years of combined work experience and university studies
This basically puts it in the post-graduate leagues as far as studies go. Think of it as a master’s degree without the thesis. You don’t need the CFA like a doctor needs the MD, but it’s a recognisable valuation for employers.
Although you can get by perfectly fine without a CFA charter in the investment industry, earning a CFA charter however illustrates your level of dedication and professionalism in the industry, and with the growth of recognition of the CFA charter, it’s becoming more and more common for employers to prefer or even hire specifically for CFA charterholders, knowing that the skill level they’re hiring has been vouched for by the CFA Institute.
If you’re looking for post-graduate study options, these articles may help:
- The Alphabet Soup: CFA vs. CAIA, FRM and IMC
- CFA vs MBA: 8 Points to Help You Decide
- Is an MBA Worth It?
- Should You Be Looking at CFA-Partner B-Schools?
A Global Network of the Elite
As of 2015, the CFA Institute currently has more than 120,000 members across the world and recognised in just about every major financial market there is. The number of candidates completing all 3 levels have been on a steep rise in the past few decades:
Here are some tips that will help you in your networking efforts:
It’s worth the effort, but not a magic answer to all your needs.
As we’ve mentioned in this site time and again, the CFA is absolutely worth the time, money and effort – if you’re using what you’re getting. Do not expect it to be a magical gateway to ‘get you into finance’, but it will be a great augmentation to your career, and in some career paths it may even be crucial to promotion.
We talk more about how the CFA charter helps your career in these posts:
- Is the CFA Charter Worth It?
- 7 Reasons for You to Consider the CFA Charter
- The CFA Charter: Not a Golden Ticket to Jobs
- Career Insider Chat: Arbitrageur, Portfolio Manager
Hope you enjoyed this series! We’ve certainly enjoyed writing them – if you have any thoughts to add, just let us know in the comments below!