The CFA Designation

The CFA (Chartered Financial Analyst) designation is an internationally respected professional designation, currently administered by CFA Institute. Chartered Financial Analysts are often featured in the Wall Street Journal, or on CNBC as specialists in the investment industry. Many CFA charterholders work for Wall Street firms in New York, or for firms in Boston, Chicago, San Francisco, Los Angeles, Toronto, Baltimore, Hong Kong, Singapore, Tokyo, and other financial centers. Other CFA charterholders are also MBAs who work for brokerage firms, investment banks, mutual funds, and portfolio management firms. Many CFA candidates are also CPA, CAIA, FRM, and/or ACCA candidates.

The charter is awarded to professionals in financial analysis who have completed a comprehensive course of study including three sequential exams. Additionally, charterholders must have worked for a minimum of three years in a decision-making capacity in the investment profession. They must also comply with the Code of Ethics and Standards of Professional Conduct, and register for membership in a local professional society.

The CFA charter is a mark of achievement as well as dedication to the continuing pursuit of knowledge, experience, and ethical principles that makes charterholders competitive in any market. The charter opens doors to greater job possibilities and career advancement for you. Moreover, the charter signifies your commitment to helping your clients reach their investment goals. As a charterholder, you can increase the world's standard of living by promoting greater understanding of global capital markets for your clients and the larger investing public.

Who is the CFA designation for?

The program is designed for professionals who are currently practicing in the financial industry, or other individuals, including students, who would like to become investment professionals.

The program is a "post-graduate" course of study; it is not a "basic" introduction to the field of financial analysis. Candidates for the designation must have a bachelor's degree or an equivalent of four years of qualified work experience in the investment profession. No investment experience is necessary before you take any of the tests. Many candidates enter the program with a business school education; many candidates have a liberal arts background. No specific "major" is required as a prerequisite for entering the program. However, the material in the study program and the examinations are designed for "master's" level individuals.

What is on the CFA exam?

To pass, candidates take three sequential exams. Exams for Level I, Level II, and Level III. Candidates for the charter must pass each sequential test before advancing to the next level. A candidate who is making excellent progress can finish all three levels and be awarded the charter in three years.

The three levels cover different aspects of the CFA Candidate Body of Knowledge (CBOK). Level I emphasizes tools and inputs and includes an introduction to asset valuation and portfolio management techniques. Level II emphasizes asset valuation and includes applications of the tools and inputs (including economics, accounting, and quantitative techniques) in asset valuation. Level III emphasizes portfolio management and includes strategies for applying the tools and inputs in managing equity and fixed-income securities. Ethical and professional standards are emphasized in all three levels.

Topics covered in the required materials include: investing; ethics and fiduciary duty; statistics; economics; accounting; income statements; corporate finance; equity securities; bonds; debt valuation; derivatives; real estate; portfolio management; calculation of earnings per share; technical and fundamental analysis; futures, options, and swaps; venture capital; Capital Asset Pricing Model (CAPM); Arbitrage Pricing Theory (APT); asset allocation; stocks; foreign exchange; money and banking systems; Gross Domestic Product (GDP) and Gross National Product (GNP); inflation; and trading.

How difficult is the CFA exam?

The difficulty is perhaps best illustrated by past years' pass and fail rates. Over the past few years overall pass rates have dropped to 44%, 46%, and 54% overall, for levels I, II, and III, respectively.

When are the exams given?

The Chartered Financial Analyst exams are held in December (Level I only) and June. Candidates are notified of results within 8 weeks of the exam. New charterholders, those candidates who have completed all three tests and have satisfied the program's other requirements, are announced each year in September.

Answers about CFA exam registration.

If you are a new candidate, you must register with the CFA Institute. Registration and enrollment for the CFA exam is now open and if you register early, you will save money.

For registration information, contact CFA Institute at 1-800-247-8132 (U.S. & Canada), 1-804-951-5499 (International).

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