Written by: Conor Clark, CFA

When I tell someone I’m a CFA Charterholder, they often react with a blank stare. Occasionally the person will ask, “So you’re an accountant?” referring to the similarly abbreviated but more prevalent CPA designation (Certified Public Accountant). Since the CFA is unfamiliar to many outside the financial industry, allow me to briefly explain what the CFA Charter is and what is required to become a charterholder.

What is a CFA?

The Chartered Financial Analyst (CFA) designation is a professional certification that is administered by the CFA Institute (CFAI), in Charlottesville, VA. The CFA Institute describes its mission as follows: “To lead the investment profession globally by promoting the highest standards of ethics, education, and professional excellence for the ultimate benefit of society.” CFAI achieves this mission by educating financial professionals and credentialing them with the CFA Charter. Often referred to as the “gold standard,” the CFA Charter is the most respected designation in the field of investment analysis. To ensure the charter maintains its integrity, those pursuing the charter (“candidates”) must complete a rigorous application process.

The Process to Obtain a CFA Designation

Like most professional certifications, the CFA Charter involves a challenging examination process, but there are a number of prerequisites that candidates must fulfill prior to taking the required exams. In order to become a CFA charterholder, one must first become a dues-paying member of the CFA Institute, for which there are educational and work-experience requirements. Candidates must have a bachelor’s degree and four years of professional experience in the investment industry. Additionally, one must provide at least two professional references. The CFAI also stresses the importance of professional ethics, requiring a clean history of professional conduct as well as an annually signed commitment to future ethical behavior. Once a candidate has obtained membership to CFAI, they can proceed to the testing stage.

The CFA Examination process involves three extremely challenging exams (Levels I, II, & III), administered annually. CFAI recommends a minimum of 300 hours of study for each level, which is burdensome in addition to a fulltime job. Studying five days per week for the four months prior to the test, that computes to more than three hours of daily study. The pass rates on each level are typically in the 40-50% range, with fewer than 15% of candidates who start the program ultimately completing it. Successful candidates take an average of four years to earn the designation.

Once a candidate has passed all three exams, provided all the other requirements outlined above have already been fulfilled, they earn the privilege of using the CFA designation.

The Benefits of Obtaining the CFA Designation

Obtaining the CFA Charter has numerous benefits for the career of an investment professional. The information covered on the exams is an excellent baseline of knowledge for virtually any job in the financial field. Beyond forcing charterholders to gain expertise and providing them with useful resources, the CFA is a strong signifier of competence to others.

From a client perspective, clients of a CFA charterholder can be confident that the charterholder possesses the necessary skills and experience to perform the job effectively. Clients should also take a great deal of comfort in the ethical pledges that a CFA charterholder takes. The ethical standards of the CFA program hold charterholders to much stricter requirements than is required by law.

A CFA charter is also a valuable asset for job applicants. For employers, especially in the fields of investment research and asset management, it is very attractive to hire a CFA charterholder, so it’s a great way to stand out from other applicants.

For more information about the ethical standards to which Agili as a firm is held, please review the Ethics page of our FAQs