Pros And Cons Of CFA

1. Introduction

It has become a prerequisite to have additional education to advance and become successful in one’s chosen career. Some people opt to get a Masters in Business Administration, but there are some – especially those who focus on the areas of research and portfolio management – who choose to enhance their credentials through earning the Chartered Financial Analyst (CFA) charter.

Unlike in MBA, CFA is offered by one organization only: the CFA Institute. The CFA Institute creates, administers and tests a curriculum that attempts to prepare and guide candidates for the competitive and complex world of finance.

This paper discusses the basic information about CFA – what it is, how to be a charter holder, and the pros and cons of

Once enrolled, candidates are offered some study tools and materials such as the curriculum eBook, an interactive study planner, practice tests, and mock exams. Additionally, candidates can also benefit from exam prep providers (also known as review centers) or local and virtual study groups. Although very helpful, these should only be supplementary, and not substitute the curriculum.

Typically, most candidates finish the program in four to five years. Applicants can take each exam as many times as they want, and they can take as long as they want to finish the program.

3.4. CFA Exams A candidate has to pass three exams sequentially to be a charter holder. These exams are offered annually at test centers around the world, and given on the first Saturday of June – except for Level I exam, which is also offered in December. With each level, the exam content, format, and learning focus increase in complexity (see Table 1 for topic weights). The ethical and professional standards curriculum content is similar for each exam level, but the candidates are asked different types of questions about those standards. For example, the first exam will test the candidate’s knowledge of the standards, Level II exam is about the application of these standards to situations analysts face, and lastly, the candidates will be tested on how to apply these standards in a portfolio management

3.5. Pros of Earning the Charter Earning the charter has many advantages – first of them is the educational benefit. A candidate will be more knowledgeable and can therefore make better decisions. Undoubtedly, there are also financial benefits. And since the investment industry continues to become more competitive, charter holders can try other professions. According to the CFA Institute, although portfolio managers, research analysts and executives are the most popular careers, most of CFAs are in other professions such as Corporate Financial Analyst, Financial Advisor, Risk Manager, and Investment Banking Analyst.

3.6. Cons of Earning the Charter If you want the shortcut to riches, earning the charter is not it. Earning the charter does not automatically make one a better stock picker or more successful investor; in the field of investment, it can be said that experience is the best teacher. Additionally, the Program is mostly self-study, and a candidate has to sacrifice a lot of hours to study and prepare for an exam that has an average passing rate below 50%. There is also the issue of cost. A candidate has to pay US $1,210 for every exam, buy supplementary materials, or even enroll in an exam prep