Feb 14

About the CFA

by David Harper, CFA, FRM, CIPM

Exams |

The Chartered Financial Analyst designation (or CFA charter) is the most prestigious mark in the investment profession. Three consecutive exams must be passed, and therefore earning the charter takes a lot of time: the program requires at least 250 hours, but this amount will vary by individual, and could well exceed 500 hours.

To earn the CFA, you must first become a candidate and sign up for the Level I exam. To become a CFA charterholder, you must:

  1. Pass each of the Level I, II, and III exams
  2. Meet the work experience requirements
  3. Become a regular member of CFA Institute
  4. Receive the official status (i.e., the confirmation).
  5. Maintain the status (submit an annual, ethical Professional Conduct Statement; pay membership dues)

Regarding the work experience requirement, you must have four years of relevant work experience. Here is a list of sample job titles but the idea is that you spend at least 50% of your time in the investment decision-making process.

The CFA Institute invests considerable resources into the development of their curriculum. The foundation is the Candidate Body of Knowledge (CBOK) which, in turn, informs the learning outcome statements (LOS). Put another way, the CBOK is the broad "constitution" and the LOS is the massive list of specific knowledge, skills and/or abilities that should be applied. A new CBOK was released in late 2006. Because the program is global, local laws and regulations are not covered. But Ethical and Professional Standards have considerable weight and have become more prominent in recent years. In total, the exams cover ten (10) topic areas:

The Level I exam is about investment tools:

  • Ethical and Professional Standards
  • Quantitative methods
  • economics
  • Financial statement analysis, and
  • Corporate Finance

The Level II exam is about asset valuation:

  • Ethical and Professional Standards
  • Analysis of Equity Investments
  • Analysis of Fixed Income Investments
  • Analysis of Derivatives
  • Analysis of Alternative Investments
  • Portfolio Management & Performance Measurement

The Level III exam is about Portfolio Management and Performance Measurement (and, of course, Ethical & Professional Standards).

Comments

  1. Adrian Boanca 07 Mar 2007

    Hi,

    I am a level I candidate in the CFA program and I would like to know what are the tools (video, preparation kit) for this exam. It is not very clear to me from what I read on the site.

  2. Ibrahim Tayan 27 May 2007

    Hi,
    I have a BS in Management Information Systems year 2005 and i read about CFA program and I’m interested in taking this program but i would like to know what experience is needed.
    On a scale of 1 to 10, what is the rate we can give the exam?
    What is the time needed to take the whole CFA program? 1 year
    Please, if you think there’s any additional information can help me to take my decision in taking CFA let me know

  3. az 08 Feb 2008

    need to find free cfa level 1 schweser notes

  4. sagar 26 Feb 2008

    Hi David,

    Is the CDS (Certified Derivatives Specialist) course offered by the DFA institute worth doing? The course contents are good but the programme is not known to many.

    Could you throw some light on it?

    Thanks you so much,
    Sagar, MBA Finance

  5. shubham karodi 07 Nov 2008

    can i do CFA or FRM with my full time study?

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