A CFA is one of the most recognized credentials the world of investing — here's what to know (2023)

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  • A CFA is an investment professional who has earned the Chartered Financial Analyst designation from the CFA Institute.
  • You have to complete a combination of education and work experience, as well as pass three exams, to become a CFA.
  • You'll find CFA charterholders working mostly in positions related to investing.
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The world of finance encompasses a vast arena of specialties, job titles, functions, and practices related to money and investment. You'll often see a financial professional with one or more abbreviations following their name. This indicates they have completed additional training and specialization in specific areas of finance.

One of the highest distinctions among those who work within the investment industry is the CFA. Here is a closer look at what a CFA is and how one earns this designation.

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What is a CFA?

CFA stands for Chartered Financial Analyst. It indicates that someone has earned a CFA charter from the CFA Institute, a nonprofit organization that aims to advance ethics, market integrity, and professional standards for the investment management practitioners. CFA charterholders have completed the full CFA program, which includes education, passing three exams, and gaining a set number of hours of work experience.

"Many in the financial services industry consider it to be the investment profession's most rigorous and esteemed credential, as it relates to investment valuation and portfolio construction," says Christopher Sorrow, vice president and CFA charterholder with Probity Advisors. "The designation signifies that the individual has successfully passed the academic curriculum and experience requirements that the CFA Institute has designed to illustrate investment management and finance proficiency."

A CFA charterholder is qualified to work in a range of senior and executive jobs in the investment industry. They help businesses and clients make investment decisions, trade securities, and enhance financial markets. Common jobs where having a CFA charter provides an advantage include:

  • Portfolio management
  • Research
  • Consulting
  • Risk analysis and/or management
  • Investment banking
  • Sales and trading

Those who pursue a CFA designation often already manage portfolios or wealth, research and analyze investments, make decisions regarding investments, or are finance students intent on moving into the investment field.

Pay for CFA charterholders varies based on region, type of job, and compensation incentives, such as bonuses. The CFA Institute lists the base salary for a portfolio manager with a CFA charter at around $126,000 to $177,000, taking total compensation into consideration.

How do you earn a CFA?

There are several steps to earning a CFA charter. The first is meeting one of the following prerequisites for enrolling in the program:

  • Completing a bachelor's degree program or one that is comparable
  • Being an undergraduate with 11 months or less until completing your degree
  • Having completed a minimum of 4,000 hours of combined work and/or education experience within three consecutive years

Next, you'll have to pass three exams that are broken down into three levels and must be completed in sequence. To pass these exams, expect to complete more than 900 hours of self study of topics within 10 areas of investment and finance. Your scores will not expire, so you can plan out when you take each test to coincide with when you feel most prepared to pass.

"Overall, the CFA examinations are difficult," says Samuel Gottlieb, CFA and CFA senior content specialist with UWorld. "But candidates who study for more than 300 hours, use alternate prep resources, answer as many practice questions as possible, and create a systematic study strategy can improve their chances of passing."

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Third, you will have to complete a minimum of 4,000 hours of qualified work experience. This can be attained before, during, or after your participation in the CFA program. Then, you'll need to apply for a CFA Institute membership, which will include providing letters of reference.

Once you've completed all of these steps, you can apply to become a CFA charterholder. Here's a closer look at each of these steps.

1. Pass the CFA exams

The CFA program provides a full curriculum to help candidates prepare for and pass three comprehensive exams: Level I, Level II, and Level III. Topic areas include:

  • Ethical and professional standards
  • Quantitative methods
  • Economics
  • Financial statement analysis
  • Corporate issuers
  • Equity investments
  • Fixed income
  • Derivatives
  • Alternative investments
  • Portfolio management
  • Wealth planning

The Level I exam is given over two sessions of 2.25 hours each. There are 180 multiple choice questions covering most of the topics above. Each topic area carries a different weight for scoring, and you'll only get a total score for completing the exam after both sessions are complete.

The Level II exam is also broken into two sessions, both 2 hours and 20 minutes each. There are 88 total questions split between the two exams. While they are all multiple choice, the questions ask you to read a vignette and answer questions based on that specific information. You'll be tested on the same topics as Level I, but the questions are weighted differently.

"The highest-weighted topics for 2022 Level II with topic weights of 10 to 15 percent are: ethical and professional standards, financial statement analysis, equity investments, fixed income, and portfolio management," advises Gottlieb.

The Level III exam is markedly different from the other two. It's broken into two sessions that are each 2 hours and 12 minutes long. There are 44 multiple choice questions and vignettes like with the Level II exams. But you'll also find questions that ask you to give a numerical response or provide an essay explaining your reasoning.

Results are available between 60 and 90 days of completing an exam. According to the CFA Institute, the 10-year average pass rate is between 42% and 54%, depending on which level you take.

"CFA Program exam results do not expire, and you are not required to enroll each year," Gottlieb says. "Candidates are permitted to take as much time between exams as they choose. There is no limit to the amount of time required to complete the CFA program."

2. Achieve qualified work experience

The CFA program requires candidates to have completed at least 4,000 hours of qualified work experience over a minimum of 36 months. It must be directly related to the investment-decision making process or producing work that informs or adds value to the process, according to Gottlieb.

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"Experience earned through full-time, part-time, or remote work arrangements—before, during, or after the applicant's participation in the CFA program—can qualify," Gottlieb says.

This kind of work experience is one of the criteria for enrolling in the CFA program, but can be circumvented if you have the requisite education.

3. Submit letters of reference

You will have to submit several letters of reference to qualify for a CFA charter. Plan on asking for two to three letters from professional sources who can speak to your experience and character regarding the investment decision-making process.

Jonathan Maroko, CFA and consulting CFO with Burkland, advises going with two references if one is an active regular member of the local CFA society to which your applying and three if none of them is.

"I don't think you need to worry about having the 'most impact,' the same way you might if applying to graduate school," Maroko adds.

4. Apply to become a CFA charterholder

To become a CFA charterholder, you're really applying to be a CFA Institute member. You will have to complete all of the steps detailed above, then apply for membership. Once approved, you will be a CFA charterholder.

How much does it cost to become a CFA?

Here are the costs you can expect to pay on your path to becoming a CFA:

  • $450 registration fee paid when you sign up for your Level I exam
  • $250 rescheduling fee if you need to change your test date
  • $700 to $1,000 to register for each exam, depending on whether you sign up in time for an early bird discount

"Candidates should also budget for miscellaneous expenses like CFA study materials, a CFA-approved calculator, travel and accommodations to reach a testing center, and potential exam retake fees if they fail a section," says Stephanie Ng, CPA, CFO, and author of "I Pass Finance Exams."

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Before you get sticker shock from all these fees, remember it will take at least three years to complete all the steps needed to qualify for a CFA charter. You can go at your own pace, so you can also spread out costs.


While you may be learning about the CFA designation for the first time, you might already be familiar with another widely recognized financial certification: the CERTIFIED FINANCIAL PLANNERTM, or CFP®. Those who are CFP® professionals can also be CFA charterholders although it's not a requirement.

The CFP® certification program focuses on a broad range of topics related to financial planning, advising, and management. Similarly to the CFA program, candidates are required to complete extensive coursework, pass a rigorous exam, and have thousands of hours of professional experience.

The biggest difference between a CFP® and a CFA charterholder is that the CFA program is focuses on the investment area of finance, while CFP® professionals concentrate on financial planning, with investing being one component of that.

"Financial planners, wealth managers, and financial advisors are typical CFP® jobs," Gottlieb says. "While these certificates are prevalent, the CFP® is more common for a financial advisor because it is better geared to individual financial planning.

"CFAs are experts in financial analysis, with the two most popular jobs being portfolio manager and research analyst and, in addition, working with people who need assistance with investing and asset allocation."

Robin Kavanagh

Robin Kavanagh is a freelance writer based in South Carolina. She has spent the last 20 years writing about personal finance, health, business and lifestyle topics for The New York Times, Yes! Magazine, Next Tribe, Parenting and various trade magazines.

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Is CFA well recognized? ›

The CFA charter is one of the most respected designations in finance and is widely considered to be the gold standard in the field of investment analysis.

What is CFA credentials? ›

A Chartered Financial Analyst (CFA®) charter is a designation given to those who have completed the CFA® Program and completed acceptable work experience requirements. The CFA Program is a three-part exam that tests the fundamentals of investment tools, valuing assets, portfolio management, and wealth planning.

Is CFA worth it for investing? ›

If you're aiming to work in roles such as financial analysts, portfolio managers, or investment bankers, the CFA designation can be a valuable asset. However, if you want to pursue careers in other areas of finance, an alternative certification or qualification may be more relevant.

What is CFA important for? ›

Widely considered the apex for professional development in investment management, the CFA designation is valued by employers for roles and functions in every sector of the global finance industry, including portfolio management, analysis, private wealth, and consulting.

Is the CFA as valuable as an MBA? ›

An MBA is more costly to acquire than a CFA and typically requires being a full-time student, while someone studying for a CFA can simultaneously hold a full-time job. However, the tradeoff is that after completion, an MBA often gives a bigger boost to your earnings potential than a CFA.

Is CFA too tough? ›

The Chartered Financial Analyst credential is one of the most demanding exams when it comes to preparation and study time required. The average pass rate for the CFA Level 1 is only 41%. For Level 2, you're looking at a buzzsaw passage rate of 45%. And Level 3 is not much easier at 52%.

Is CFA equivalent to Masters? ›

Is the CFA Equivalent to a Master's Degree? Since both the CFA Program and an MSFA require an undergraduate degree in most cases and require about the same total amount of study, the CFA is generally considered to be equivalent to a master's degree.

What is harder CPA or CFA? ›

The CPA certification is typically viewed as more difficult than the CFA because it covers a broader set of topics. The CPA exam broadly focuses on all aspects of accounting while the CFA exam solely focuses on finance. In the end, the difficulty of either exam depends largely on your knowledge and experience.

Do you need a degree to get a CFA? ›

To fulfill the CFA Program entrance education requirements, you must have a bachelor's (or equivalent) degree or your exam window must be within 23 months of your graduation month.

Do CFA make a lot of money? ›

As of May 26, 2023, the average annual pay for a Cfa in California is $58,627 a year. Just in case you need a simple salary calculator, that works out to be approximately $28.19 an hour. This is the equivalent of $1,127/week or $4,885/month.

How hard is the CFA exam? ›

Overall, the CFA exams are very difficult, but candidates can increase their chances of passing by studying for over 300 hours, utilizing alternative prep materials, answering as many practice questions as possible, and creating a structured study plan.

Is the CFA impressive? ›

The CFA designation is good signalling tool and a quality indicator. However that credibility and respect you get as a charterholder is probably recognized and appreciated by a sub-set of the finance sector, not all.

How much do CFA make? ›

As of May 2022, the average total compensation for charterholders (in the U.S.) is approximately $300,000, according to the CFA® Society. The median base salary for charterholders is approximately $180,000, which leaves the balance to be split between cash bonuses and equity or profit-sharing.

Who benefits from a CFA? ›

Finance Professionals: If you're currently working in finance, the CFA charter can prove to be a big career booster and help you advance in or attain job roles like research analyst, portfolio manager, financial strategist, investment banker, and others.

How long does it take to get a CFA? ›

How long does the CFA® Program take to complete? With Level I exams in June and December and Level II and III exams in June, it is possible to complete the CFA Program in two years. However, with a recommended study time of 300 hours per exam level, it takes most people three to four years to complete the full program.

Who earns more CFA or MBA in USA? ›

Frequently Asked Questions. Who earns more MBA or CFA? CFA vs MBA who earns more, if general both the courses are great. However, if we see the career opportunities and earning potential then MBA pass out will be making more money than the CFA holder.

What pays more CPA or CFA? ›

Salaries can vary widely for both CFAs and CPAs based on location, experience level, and company size. That being said, according to Payscale the average salary for a CFA is $102,000 and the average salary for a CPA is $94,000.

Which degree goes best with CFA? ›

Earn a bachelor's degree

So, if you wish to pursue CFA in the big picture and are struggling to decide which course would be the best for your undergraduate specialization, here are some commerce courses for you to consider: Bachelor of Commerce. Bachelor of Economics (BE) Bachelor of Accounting and Finance (BAF)

Is there a lot of math on the CFA? ›

For the CFA Level 1 exam, a big chunk of math will be in Quantitative Methods (probability, time series analysis, hypothesis testing, correlations, mean/variance analysis, cash flows, etc.), followed by Derivatives and Fixed Income, Portfolio Management, and Economics.

How many people fail CFA? ›

Falling Pass Rates

The Level I pass rate fell to as low as 22% in July of that year, down from 49% in 2020. Level II and Level III pass rates fell to 40% and 42%, respectively, from 55% and 56% the previous year.

Does CFA require a lot of math? ›

in mathematics is not necessary to do well in quantitative methods, but having a background in statistics will certainly be helpful. An 8%-to-12% weight means that candidates should expect anywhere from 15 to 22 questions on quantitative methods.

Does CFA look good on resume? ›

The Chartered Financial Analyst (CFA) qualification is a big asset for an investment professional and should be highlighted on a resume. The CFA Charterholder Program involves passing three six-hour exams and putting in four years of investment-related work.

Is a CFA equivalent to a Masters? ›

Is the CFA Equivalent to a Master's Degree? Since both the CFA Program and an MSFA require an undergraduate degree in most cases and require about the same total amount of study, the CFA is generally considered to be equivalent to a master's degree.

Is CFA better than CPA? ›

Professionals with the CFA designation are considered experts in investment analysis. Like the CPA, the CFA opens additional career opportunities and can lead to higher earnings. The primary difference between the CPA and CFA is that the CPA is an accounting credential, while the CFA is for financial analysis.

What makes the CFA exam so hard? ›

The CFA exams are difficult, taking about 4-6 hours each. Candidates must complete 180 questions during that time in the Level I exam, which is not an easy task. To be successful, candidates need more than just intelligence and stamina. They also need the right tools at their disposal.

Which level of CFA is hardest? ›

Many CFA charterholders consider the Level 3 CFA Exam the most difficult because of the time and thought needed to answer the constructed responses successfully. While the typical Level 3 CFA Exam pass rates are the highest of the CFA Exams, only around 56% of CFA candidates pass the exam.

Can I put CFA after my name? ›

Include your designation after your name. (For example: “Jane Doe, CFA”) Include your charterholder status in the certifications or education section of your resume as “CFA® charterholder, CFA Institute.” You may also include the date your charter was issued.

Is the CFA the hardest exam in the world? ›

CFA (Chartered Financial Analyst)

According to the Wall Street Journal, the CFA exam is the most difficult exam in the world, with less than 1/5th of candidates clearing it, after repeated attempts, on a yearly basis.

What percentage of people finish the CFA? ›

The CFA Institute reports that historical pass rates for Level I and Level II of the exams are typically between 40% and 50% with Level III having a slightly higher pass rate.

How much does CFA cost? ›

You'll pay multiple fees to take the CFA exam. The one-time enrollment fee is $350. The standard registration fee for each level of the exam is $1,200.

What is higher than a CFA? ›

The CFP is a professional designation for financial planners administered by the nonprofit CFP Board. It focuses on more holistic financial planning as opposed to the investment management focus of the CFA.

How much does CFA earn in USA? ›

On average the base CFA Salary In US is $126,000 USD and total compensation of about $177,000 USD. CFA Professionals have a wide range of scope to hold different positions in the finance industry in various streams such as trading, asset management, investment portfolio management, and the like.


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