The Chartered Financial Analyst designation is a professional certification awarded by the CFA Institute to financial analysts who pass three exams and meet specific work experience requirements.
Understanding the Chartered Financial Analyst designation
The Chartered Financial Analyst certification is recognized internationally as a standard for competence in investment management and financial analysis. To earn the charter, candidates must pass three levels of examinations. These exams cover topics including quantitative methods, economics, corporate finance, equity investments, fixed income, and ethics.
Candidates typically spend over 300 hours studying for each exam level. The testing process generally takes several years to complete. Applicants must also accumulate 4,000 hours of relevant work experience to receive the charter. This professional experience must involve making investment decisions or producing work that directly informs those decisions.
The designation is common among portfolio managers and research analysts. Financial institutions often require their investment staff to hold the charter. Elephants looking to advance in asset management frequently pursue this certification to demonstrate technical proficiency to employers and clients globally.
Example
Suppose an Elephant working as a junior equity analyst in London wants to move into portfolio management. The Elephant decides to pursue the CFA designation to build technical skills in asset valuation. Over four years, the Elephant studies for and passes all three levels of the exam. The analyst also logs 4,000 hours of qualified work experience evaluating European retail equities.
Upon receiving the charter, the Elephant adds the letters CFA after their name on professional correspondence. When the Elephant applies for a senior portfolio manager position at a firm in Singapore, the hiring committee recognizes the designation. The committee understands the applicant has a standardized baseline of financial knowledge and a documented adherence to professional ethics.