Should I aim to become a Chartered Financial Analyst (CFA)? Let’s compare the costs and benefits.
Costs
- Fees
- One-time enrollment fee; USD 450
- Exam registration fee (covers complete curriculum eBook, practice tests and mock exams); USD 650 – 1380 depending on how early you register
- For all three levels (exams I, II and III), the fees add up to USD 1950 – 4140
- Exam retake requires a new fee; there is no limit on exam attempts
- You may be eligible for a CFA Program Scholarship
- Optional CFA Review Courses typically amount to USD 1000 – 1500 per level
- Financial calculator; USD 50
- Travel to exam location; USD ___
- Annual CFA membership fee; USD 275
- Optional local society membership fee; USD 50 – 200
- Time
- Study 300 hours per level, 900 total, is the average
- Travel to exam location, i.e. at least three trips to pass all three exams
- Minimum 18 months to clear all three exams
- To enroll; required education or work experience
- To gain CFA charter; 4 years of relevant work experience prior to or after exams
- Risks
- Failure to renew membership to maintain CFA designation
- Failing exams; less than 50% pass rate
- Having additional requirements approved
- Relevant work experience
- Letters of reference
Benefits
- Knowledge
- Targeted for research and portfolio management
- Broad topics; Ethical and Professional Standards, Quantitative Methods, Economics, Financial Reporting and Analysis, Corporate Finance, Equity Investments, Fixed Income, Derivatives, Alternative Investment, Portfolio Management and Wealth Planning
- Level I tests your knowledge of the ethical and professional standards
- Level II tests how you apply those standards to situations analysts face
- Level III tests how you apply the standards in a portfolio management and compliance context
- Career
- CFA charterholder
- Exclusive; only around 150,000 worldwide
- Quality stamp, only 20% pass all three exams on first try
- Most common job titles;
- Portfolio Manger (23%)
- Research Analyst (16%)
- Chief Executive (7%)
- Higher salary? See considerations below
- CFA charterholder
Considerations
- MBA vs CFA
- MBA: Management – CFA: Finance (investments)
- MBA; Expensive – CFA: Relatively cheap
- MBA; Classroom study – CFA: self-study
- MBA; High pass rate – CFA: Low pass rate
- CFA is USA centered; 66% of charterholders are American
- CFAs tend to receive higher salaries
- I take such stats with a grain of salt. Is CFA the cause of salary increase, or would CFAs have boosted their careers anyway due to high determination and intelligence (which they must have to receive CFA in the first place)?
My thoughts
- CFA is quite affordable; the annual fee is annoying but I’d consider it just another small tax
- The low pass rate makes it exclusive; I like it!
- How many hours of study that’s needed, I believe, is highly individual
- Without prior study, I will do mock exams for all three levels
- These tests will give me insight into how much study I believe I will need
- And whether the topics covered will make me a better analyst
- I suspect becoming a good test taker (completing lots of practice exams) can be just as important as knowing the underlying curriculum
- As a self employed, I don’t know if I formally pass the work requirements
- As I don’t have an employer, a CFA designation will not directly give me any salary benefits
Conclusion
I don’t know if studying for CFA is for me. It may be, just for the sake of acquiring skills to make me a better analyst. I need to research the curriculum and exams to make up an opinion.
Categories: Uncategorized
Tags: cfa
Nice Article! I Found And Related Blogs Which Has All The Info About CFA, CFA Career, CFA Salary In India or you can say in detailed info about CFA which You Might Wanna Check Out – https://Www.Edupristine.Com/Blog/Want-Know-Cfa-Chartered-Financial-Analyst