How to become a Chartered Financial Analyst
Are you thinking of becoming a chartered financial analyst? If yes, this post presents information you need to achieve that dream.
The educational requirements and training that you need, as well as the certification program to complete to become a CFA are treated in this post.
So, read on …
Who is a Chartered Financial Analyst?
A chartered financial analyst (CFA) is a candidate who has successfully completed the CFA program organized by CFA Institute (CFA Institute was formerly called the Association for Investment Management and Research, AIMR).
The CFA becomes a charter holder when he/she has been awarded with the CFA charter.
It pays to become a chartered financial analyst, but you must consider the severe pathway for the career.
The processes will cost you money and time, but there is really a BIG advantage pursuing this career. You need to know the prerequisites of enrollment.
Furthermore, chartered financial analysts assist individuals in making wise decisions concerning money management and investment plans.
They analyze financial status of a person, get clue about their future targets and provide possible means of achieving them.
Educational Requirements and Career Pathway for Chartered Financial Analysts (CFA)
The requirements for enrolling in CFA program include any of bachelor’s degree, 4 years work experience, bachelor’s degree final year program, or combination of work experience and education.
The chartered financial analyst curriculum is severed into three levels laying emphasis on various aspects of portfolio management, each level requiring three hundred (300) hours of student study and preparation.
The CFA Institute allows fifteen (15) to twenty (20) hours of weekly study.
Topics to study at the three levels of CFA curriculum include:
- Portfolio Analysis and Management
- Corporate Finance, Mergers and Acquisitions
- Individual Security Analysis
- Fiscal and Monetary Policy
- Financial Ratios, Debt and Taxation
- Currencies and Exchange Rates
- Ethics and professional Standards
- Economics, Business Cycles and Market Forces
- Financial Reporting and Analysis
- Quantitative Methods of Analysis
- Standards of Practice.
The three levels of CFA curriculum are:
- First Level Curriculum: The first level of CFA curriculum introduces the students to the basic ideas and management of portfolio and investment, and to securities, markets, individual securities and asset classes. The CFA first level board exam is done twice a year, over the first weekends in June and December.
- Second Level Curriculum: At the second level curriculum the students use what they’ve learned from the first level curriculum to assess industries’ and companies’ worth and values, and also investment vehicles and securities. The administration of CFA second level exam board is carried out on the first weekend of June.
- Third Level Curriculum: This level requires management of portfolios of different individuals, institutions and cooperative bodies, and taking stocks and creating bonds. The board exam for this level curriculum is also administered on the first weekend of June just like the second level board exam.
Training Requirements for Chartered Financial Analysts
Training helps chartered financial analysts acquire the experience and skills their profession may entail.
Some financial analysis training programs can be found in colleges, universities, and private organizations. It takes about two to three years to complete a financial analyst training program in colleges or universities, costing you from $500 to $800 per course
- Financial Analyst Specialist (FAS): The Financial Analyst Specialist (FAS) is an internet-based program that can be completed in five months, and accepts participation from anywhere in the world. The program has video tutorials, strategic project, online assessment, mock exam and study guide. The participant of this program will learn financial ideology and complicated ratio analysis methods.
- Global Training Program: The Global Training Program offers live online study pattern and takes four years to complete. It requires professional work experience. The body that issues award is the Institute of Chartered Financial Analyst. Getting trained by the Global Training Program creates better opportunities for chartered financial analysts.
How to Obtain Certification for Chartered Financial Analysts
The Association for Investment Management and Research, now known as the Chartered Financial Analysts Institute, offers a CFA preparatory program requiring the student to take a three-part examination based on the Candidate Body of Knowledge (CBOK).
Another certification program, organized by the Association for Investment Management and Research, includes a globally recognized Certificate in Investment Performance Measurement (CIPM). You must successfully complete the program before certification is issued.
Certification for chartered financial analysts involves passing three levels of exams and pledging to uphold the CFA Institute’s Code of Ethics and Standards of Professional Conduct.
It takes about six hours to complete each of the three certification examinations.
- Level I examination is multiple-choice on portfolio management, securities, markets, investment, valuation, asset classes, and the CFA Institute Code of Ethics and Standards of Professional Conduct.
- Level II examination focuses on asset valuation and consisting of twenty item sets.
- Level III examination focuses on management of portfolio, and consisting of item sets and essay questions.
After passing the three levels of certification exams offered by the CFA Institute, you will get certified but must continue to adhere to the CFA Institute Code of Ethics and Standards of Professional Conduct with yearly dues to keep you a member of the CFA Institute.
Licensure in Chartered Financial Analysis Career
Licensure in CFA career can be obtained once or more than once, especially for people working for security firms.
The Financial Industry Regulatory Authority supervises licensing of professionals in the securities industry.
According to the U.S. Bureau of Labor Statistics (BLS), employment may be sought before licensing as the employer will most likely sponsor the employee’s licensure, but licensure must be renewed in a case of new employment.
Job Duties and Responsibilities of Chartered Financial Analysts
The job duties of a CFA are to be carried out by the financial analyst on duty. Some of the major duties and responsibilities of a chartered financial analyst are as follows:
- Passing insurance and tax information to individuals and companies
- Making money for individuals and corporative through decision taking
- Assisting individuals on how best to think short-term and long-term investments
- Tracking stock performance and gathering data in a spreadsheet to be interpreted by the client
- Helping companies or individuals improve financial performance
- Creating recommendations after taking investment decision
- Assessment of value of an organization based on the organization’s financial records.
Where can Chartered Financial Analysts find Jobs?
Chartered financial analysts can work with large firms that focus on finance, investments or insurance, while others seek employment at private individual firms, or become self-employed.
Security corporations, banks and other financial departmental organizations look for chartered financial analysts to employ.
Job growth for chartered financial analysts is expected to increase by far more than average from 2010 to 2020, at a rate of 23%, with expectation of additional 54,200 CFAs to be hired during that decade.
What are the Salaries of Chartered Financial Analysts?
According to the U.S. Bureau of Labor Statistics (BLS), chartered financial analysts earned a medium annual salary of $74,350 in 2010.
An investment professional’s salary can increase by $20,000 yearly for CFA charter holders, depending on job title and employer.
According to Payscale, the average salary of chartered financial analysts per year working in the United States is $74K.
According to the latest Robert Half Salary Guide, a chartered financial analyst with less than a year experience working at a small firm should expect earning between $45,250 and $53,750.
A chartered financial analyst with one to two years experience should expect between $58,000 and $76,000 being 4.9% increase from the previous year.
For chartered financial analysts at the manager level, salary ranges from $77,250 to $99,250.
Did this post provide the relevant information you need to become a chartered financial analyst? Please share your thoughts about this post and additional information one needs to get into the CFA career that you may know in the box below.