Introduction to CFA qualifications

The title of Chartered Financial Analyst (CFA) is regarded by most as a key certification for investment professionals, especially in the fields of research and portfolio management. However, it is just one of many names in use today. This may cause some confusion, because investors and professionals are not clear about the meaning of each name and which is the best.

This article will delve into the CFA title. If you are a professional considering CFA, we will provide you with the information you need to start weighing the costs and benefits of this decision.

Key points

  • The Chartered Financial Analyst (CFA) title is awarded to investment professionals who have successfully completed the requirements of the CFA Institute.
  • Professionals with this title stand out in the eyes of employers and may earn higher salaries than professionals without this title.
  • Candidates must pass three levels of examinations to become a certificate holder.
  • CFA holders usually work in institutional investment companies, broker-dealers, insurance companies, pension funds, banks, and universities.

What is the CFA title?

The CFA title is awarded to investment professionals who have successfully completed the requirements of the globally recognized CFA Institute (formerly the Association for Investment Management and Research (AIMR)). In order to be eligible for the CFA title, candidates:

  1. Three rigorous 4.5-hour exams must be passed within a few years.
  2. Must have “at least three consecutive years of 4,000 hours of work experience and/or higher education.” Although the CFA Institute allows a fairly broad interpretation here, the experience must usually be of a financial nature.
  3. You must join the CFA Institute by complying with its code of professional ethics and standards of professional conduct.

Candidates do not necessarily need to have a college degree to qualify for the CFA.

Due to its focus on analysis, investment knowledge and ethics, the CFA title is widely recognized worldwide and is the main certification for financial professionals.

The CFA title is widely recognized worldwide due to its focus on analysis, investment knowledge and ethics.

All franchisees are listed in the CFA Institute’s membership directory with their contact details. This makes it easy for individuals, institutions and companies to find franchisees, members or financial advisors. The directory also records whether members have a good reputation in the institute.


Becoming a CFA charterholder provides excellence and benefits to members. The name is recognized as a benchmark, making the licensee attractive to potential employers. Due to the time, discipline, and dedication required to pass the exam and become a member, certificate holders often stand out. As the workforce becomes more competitive, earning this title becomes more important.

Becoming a member of CFA Institute can also get financial benefits. Compared with those who do not hold the position, the salary of the member may usually be higher.

What is the CFA Institute?

The CFA Institute is a global non-profit professional organization with more than 170,000 franchisees, portfolio managers and other financial professionals in more than 160 different global markets. The established mission of the Institute is to promote and develop high levels of education, ethics and professional standards in the investment industry.

The name was first created in 1962, when financial analyst associations in four cities in the United States (Boston, Chicago, New York, and Philadelphia) joined forces to develop a code of conduct. The first exam was held in 1963 and a total of 284 candidates took part. The group issued 268 charters that year. In 2004, the name of the group was changed from the aforementioned AIMR to CFA Institute.

CFA member associations are located all over the world. The places with the most members include:

  • UK
  • New York
  • Toronto
  • Hongkong
  • Boston

CFA exam

Most people considering getting the CFA title worry about one thing: exams. The exam is divided into three levels, all conducted by computer. Level I is conducted four times a year, in February, May, August, and November-in 2021, the exams are also held in March and July. It tests candidates’ knowledge in investment theory, ethics, financial accounting and portfolio management.

Three Level II and Level III exams will be held in 2021-in May, August and November-and then changed to twice a year in 2022: Level II in February and August, and Level III in May and November Held.

These are not simple tests. The CFA Institute estimates that each exam requires more than 300 hours of study time. Professionals trying to learn while still working in their field may find this a daunting task. However, many candidates believe that intensive learning requires a better education than graduate school because it is completely focused on investment management and practice.

CFA pass rate

The course was established in 1962 and is constantly updated to ensure that the course meets the needs of the global investment industry. This graduate-level course usually requires six months of study before each exam date. Since the first exam in 1963, the pass rate has changed every year.

According to the institute, the pass rates for the end of 2020/early 2021 are:

  • Level 1: 44%
  • Level 2: 55%
  • Level 3: 56%

In the first three attempts, less than 20% of candidates passed all three tests, so it’s important that candidates don’t get discouraged.

CFA career

CFA franchise holders can be found in different areas of the financial services industry, while others continue to work for the government in terms of regulation and public policy. They often seek careers in institutional investment companies (such as hedge funds or mutual funds), broker-dealers, insurance companies, pension funds, banks, and universities. CFA members are located in some of the largest institutions in the world, including Goldman Sachs, JPMorgan Chase, Morgan Stanley and UBS.

CFA qualifications and investors

Investors dealing with CFA franchisees can make some basic assumptions. CFA usually focuses on improving their skills, whether it’s security analysis, portfolio management, business reporting, or some other services. In addition, individuals have agreed to abide by the CFA Institute’s Code of Ethics and Standards of Professional Conduct in order to maintain a higher level of integrity.

In other words, investment professionals with the CFA designation have invested a lot of time and energy to improve their skills and knowledge on behalf of their clients. This is a great comfort for most investors—especially if they rely mainly on professional advice when managing financial affairs.

Restrictions of the Court of Final Appeal

Although the CFA exam requires a certain grasp of financial concepts and markets, having a CFA title does not automatically make a person a better stock picker or more successful investor. Stock picking is a practical skill that must be cultivated through experience. The knowledge gained from studying for the CFA exam will not be harmed, but certification alone cannot make every licensee a market expert.

Having said that, there are some very well-known investment professionals who hold CFA licenses. Gary Brinson and Sir John Max Templeton are two famous examples.

Bottom line

In the eyes of professionals and investors, the CFA title distinguishes franchisees from other practitioners. A successful CFA franchise holder has demonstrated that they are capable of completing rigorous tests, showing learning ability, and earnestly committing to carry out a professional career in accordance with high ethical standards.


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