What is CFA? Everything you need to know to be one

CFA, stands for Chartered Financial Analyst, is one of the most recognized and respected programs in the world. CFA course is a postgraduate professional certificate that is offered by the American-based institute of CFA and is a globally recognized course. It is one of the most sought-after designations in Investment Management and Analysis and Financial Services and Management across the globe. CFA course develops skills and improves an individual’s concept that helps to bridge the gap between industry practices, conceptual knowledge, real-world portfolio management skills, and knowledge about professional and ethical standards to give a strong analysis of the industry. CFA course helps to achieve understanding into the investment and financial industry which leads to growth in the possibility of getting a high paying job in the field of investment and financial management.

CFA course is a three-level exam that tests valuing assets, fundamentals of investment tools, wealth planning, and portfolio management with a background in accounting, finance, business, or economics. The curriculum of the CFA course includes Corporate Finance, Equity Investment, Financial Analysis and Reporting, Derivatives, etc. A CFA charter holder has the right to use the designation of CFA after completion of the program, application, and acceptance by the institute of CFA. CFA  charter holders can work in asset management, risk management, investment management and so on.

Benefits of the CFA Program

CFA Programs can benefit people by building a career in the field of corporate, banking, or financial services. Some of the benefits of the CFA courses are mentioned in the below points:

  • CFA courses have vast opportunities in the financial markets.
  • The certificate offered by the institute of CFA is accepted all over the world.
  • CFA courses have various career opportunities in the field of investment banking, asset and wealth management, consulting, and commercial banking.
  • CFA courses enable candidates to achieve the abilities that are required to work in the financial sector.
  • CFA graduates can earn good compensation after completing the CFA course. They may expect to earn an amount that ranges between 3 lakh to 35 lakh per year.

To get admission to the CFA course, candidates need to register themselves with the institute of CFA. Admission is totally based on merit. No entrance exam is required to get admission to the CFA certification course.

Candidates who want to pursue a CFA course must possess a Bachelor’s degree or its equivalent from a recognized university. At the time of registration of CFA, candidates who are in the final year of their bachelor’s degree are also eligible to get admission in the course. Apart from this, candidates at the time of registration should possess a relevant work experience of not less than four years.

CFA Program: Exam Pattern

Throughout the whole year, the CFA exam for the three levels- Level 1, Level 2, and Level 3 are conducted. According to the different exam levels, the course curriculum weightage varies.

CFA Level 1 Exam Pattern: CFA Level 1 exam is conducted twice a year i.e., June and December. The CFA Level 1 exam has changed from paper-based to computer-based tests. The whole exam is divided into two halves. The duration of each half is 2 hours 15 minutes. There will be 90 Multiple Choice Questions (MCQs) for each half. The first half covered topics from Quantitative methods, Professional and Ethical standards, Financial analysis and Reporting, Economics. The second half covered topics from equity, corporate finance, derivatives, fixed income, portfolio management, and alternative management.

CFA Level 2 Exam Pattern: CFA Level 2 exam is conducted in the month of June every year. The CFA Level 2 exam is divided into two halves. There will be a total of 88 Multiple Choice Questions (MCQs). The total duration of the exam is 4 hours 30 minutes. CFA Level 2 exam covers 10 topics that are divided into four areas which are- Professional and Ethical standards, Investment Tools, Wealth Planning, and Portfolio Management

CFA Level 3 Exam Pattern: CFA Level 3 exam is also conducted in the month of June every year. It is the final level of the exam. CFA Level 3 exam gives importance to Portfolio Management and Wealth Planning. CFA Level 3 exam is divided into two sessions. The total duration of the exam is 4 hours 30 minutes. There will be a total of 44 Multiple Choice Questions (MCQs). In the CFA Level 3 exam, there will also be descriptive questions.

The syllabus of the CFA exam is divided into three levels- Level 1, Level 2, and Level 3. After passing the previous exam level, candidates can move to the next level. The curriculum of CFA is designed in such a way that students can get in-depth knowledge in investment decision making, investment depth, financial accounting, stock market, derivatives, etc. The syllabus of all three sections of CFA is identical.

The syllabus of CFA along with the weightage of each topic is mentioned in the below table:

CFA Subjects CFA Level 1 Weightage CFA Level 2 Weightage CFA Level 3 Weightage
Quantitative Methods 8- 12 5- 10 N/A
Ethical and Professional Standards 15- 20 10- 15 10- 15
Economics 8- 12 5- 10 5- 10
Corporate Issuers 8- 12 5- 10 N/A
Financial Statement Analysis 13- 17 10- 15 N/A
Fixed Income 10- 12 10- 15 15- 20
Equity Investments 10- 12 10- 15 10- 15
Alternative Investments 5- 8 5- 10 5- 10
Derivatives 5- 8 5- 10 5- 10
Portfolio Management and Wealth Planning 5- 8 10- 15 35- 40

The registration fees of the CFA program depend on when candidates want to register for the exam. Candidates need to pay a one-time enrollment fee of $450 when they register the first time for the Level 1 exam. Candidates should be careful in scheduling their computer-based exam, as there is a rescheduling fee of $250 for those who want to reschedule their examination.

A CFA graduate after completing the certification course can work as Business Consultant, Chartered Financial Analyst, Private banker, CFO, Investment Manager, and many more. After completing the course, a graduate can get an average salary of 8 to 20 lakh per annum. Below mentioned the salary scale of a CFA for various roles.

Job Roles Salary Per Annum (In Lakhs)
Charter Financial Analyst 4 to 16 lakhs
Portfolio Manager 10 lakhs
Associate in Investment Banking 10 lakhs
Investment Manager 13 lakhs
Equity Research Associate 7.42 lakhs

Some of the top recruiters of CFA graduates are- HSBC, Deloitte, JP Morgan, Ernst and Young, Goldman Sachs Group, SBI Bank, Reliance Industries Limited, PwC, IcRA, Axis Bank, HDFC Bank, Credit Suisse, ITC, Citi Group, ICICI Bank, Bharti Airtel, Aditya Sun Life, etc.

CFA Scope

Due to the high demand for the course, the scope of the CFA course is rapidly increasing. It offers a broad scope in the field of Portfolio Management, Investment Banking, Research Analyst, Corporate Banking, Asset Management, Risk Management, Wealth Management, Capital Markets, etc.

Thus, Chartered Financial Analyst is regarded as one of the essential certifications for working in the finance industry. Because of the growing demand for industrialization and globalization, the CFA course has become one of the most demanding courses not only in India but also in the whole world. So, candidates who want to make their career in the financial industry can opt for the CFA course.

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