What is the Chartered Financial Analyst?

The Chartered Financial Analyst ( CFA ) program is a globally recognised professional designation which covers a comprehensive finance body of knowledge that focuses on investment theory, ethics, financial accounting and portfolio management

The CFA program consists of 3 exams, Level I, II, & III and can be taken over 3 years. As a candidate you can register to sit for the exam in June or December of each year. Each exam is 6 hours long and is broken into two parts. Each part can be viewed as an individual 3 hour exam. At level I and II all questions are multiple choice type questions.

Once you have passed all three levels of the exam you will be able to work in investment banking, funds management, private equity and venture capital. Even obtaining level I would be a foot in the door. At level two employers start taking you seriously and you’ll be able to start considering non- junior roles. It is important to note that in order to actually be awarded the CFA charter you will first be required to obtain three years of work experience that can be verifiable by an existing CFA charter holder.

The Official study materials can be purchased from the CFA Institute after you have paid the registration and exam fee.

Alternative study materials can be ordered online from Stalla and Schwesser on their websites. You can choose a combination of Video, Audio and normal study notes. These alternative materials are very comprehensive and can almost replace the official study material from the institute. Additionally utilising a 3-Dimentional approach to your study program, including video and audio can mean the difference between a pass and a fail. Time is of the essence and you’ll need to use whatever methods available to maximise your time and increase your intake and understanding of the required material.

The CFA Institute publishes a CFA Body of knowledge ( CBOK ) which is a listing of all the finance topics a CFA candidate must be proficient in, in order to pass the exam successfully. The CBOK comprises of the following major topics

1. ETHICAL AND PROFESSIONAL STANDARDS
2. QUANTITATIVE METHODS
3. ECONOMICS
4. FINANCIAL REPORTING AND ANALYSIS
5. CORPORATE FINANCE
6. EQUITY INVESTMENTS
7. FIXED INCOME
8. DERIVATIVES
9. ALTERNATIVE INVESTMENTS
10. PORTFOLIO MANAGEMENT AND WEALTH PLANNING

Make no mistake; obtaining the Chartered Financial Analyst designation is not easy. Each exam requires about 250 hours of study at a minimum. The CFA program can be viewed as more comprehensive and rigourous than an MBA major in finance from a top university. In fact, more than 70% of candidates fail the level one exam each year.