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The CFA® Program 101: What’s a CFA® charter and why do people want it?


If you want to work in investment management, want higher pay, or find an MBA too expensive and time consuming, then the CFA® Program is for you.

First off: What's the CFA® Program?

CFA is short for Chartered Financial Analyst. The Chartered Financial Analyst (CFA) Program is a series of exams and working experience that allows someone to gain the CFA® designation. (This means they can put the words "CFA" after their name, much like Dr or PhD.)

It usually takes between 2 - 5 years to pass all the CFA® Program exams. There are also a few other criteria you need to hit, like having a bachelor’s degree.

[Read also: CFA® charter or MBA: Which certification suits me best?]

 

Is the CFA® Program the same as an MBA?

The CFA® Program is often compared to taking an MBA, but is not the same.

The CFA® Program curriculum will teach you everything there is to know about finance and investment - topics like economics, financial reporting, investments analysis, and portfolio management. It also trains your analytical skills.

The program is best for someone who wants to go into finance, while the MBA is for someone who wants to move across industries. However, realising that finance and investment skills are important, many MBA programs nowadays are including CFA® Program curriculum in their content as well.

 

So why do people want to get a CFA® charter?

#1: It’s cheaper than an MBA + needs less time commitment

Typically, the cost of a CFA® charter is somewhere between US$2,500 to US$8,500, depending on how many times you take the exams, what study materials you buy, and if you need extra help like revision classes. This is considered quite cheap for a professional qualification.

Unlike an MBA, you can still work full-time and study for the exams on the weekends/after work, making it achievable for people who can’t just quit their jobs to go back to school. University students can also start studying for the exams in their 3rd or 4th year.

#2: They’re aiming for a job in finance & want to work overseas

The CFA® charter is considered the highest credential in the finance world. For some roles in finance, such as investment management, having the charter is extremely important. These jobs include:

  • Research analysts

  • Portfolio managers/ Fund managers/Relationship managers

  • Private bankers/ Financial advisers

In general, because the knowledge tested in the CFA® Program exams is more specialised than an MBA, companies focusing on “buy side” investments (e.g mutual funds, pension funds, securities) prefer someone with a CFA® charter over someone with an MBA.

And as fintech increasingly starts to take over jobs in finance, the CFA® charter is one way for people to increase their value. Some job postings may even require candidates to have a charter in order to apply.

Also, like the MBA, employers in finance know about the CFA® Program. Unlike some accounting qualifications, which work only in one country (e.g. ACCA for the UK and CPA for the US), a CFA® designation will let you work worldwide, as the exams are the same in every country.