Difference Between CFA and CAIA
The full form for CFA has Chartered Financial Analyst offered by the CFA Institute and it is a three-year course that can be qualified in three levels whereas the full form for CAIA is Chartered Alternative Investment Analyst offered by the Chartered Alternative Investment Analyst Association and it can be qualified in two levels.
Finding oneself confused between two courses can be a nail-biting experience. Any decision can turn against you in the future. So, what is one expected to do in such a situation? Does that entirely mean that one should look for a third option? That is, of course, not needed. Confusion can be solved with a little bit of straining your eyes with reading exercise and working out your mind with logic and facts. So, if you are confused between which course to opt for, the CFA exam, or CAIA certification, I believe you need to carefully read this article before making a decision.
It is important to choose wisely and especially between a choice like CFA and CAIA, as both are very similar and finds a lot of takers from professionals determined to establish themselves in the field of investment or financial analysis.
What is CFA?
CFA is the professional certification program conducted by the CFA Institute (formerly the Association for Investment Management and Research, or AIMR) for investment and financial professionals. The course is recognized and respected in the corporate world for its strong foundation of advanced investment analysis and real-world portfolio management skills that boost career prospects for investment and management professionals.
The program module is structured in a format that meets the demand of the global investment industry. The course keeps on evolving and adds on to the new practices of the industry. However, it covers the broad topics relating to investment management, financial analysis, stocks, bonds, and derivatives and provides a generalist knowledge of other areas of finance.
What is CAIA?
The Chartered Alternative Investment Analyst is a designation offered by the CAIA Association on successful clearing of the CAIA exam- an exam conducted by the institution to award the designation to investment professionals. The successful passing of the exam by a candidate allows him the recognition of being a specialist in the field of alternative investments such as hedge funds, private equity, real estate investment, and venture capital. The designation is achieved by clearing two exams organized by the CAIA institute.
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This designation is globally recognized as a benchmark for professionals wanting to achieve a distinction in alternative investments. It enables a professional to understand a portfolio from the investor’s perspective and implement diverse strategies and learn the fundamentals of alternative investment class and apply the asset allocated information to achieve result-oriented decision making.
CFA vs. CAIA Infographics
Let’s see the top differences between CFA vs. CAIA.
|To qualify for the CFA program, a candidate must have a bachelor’s (or equivalent) degree or be in the final year of his bachelor’s degree program (an update is required on attaining the degree to qualify for the Level II) or a minimum of four years of professional experience. The CFA certificate is only awarded after a candidate attains four years of experience even after clearing the exam.||To appear for the CAIA exam, candidates must have at least one year of professional experience and a bachelor’s degree.|
CFA vs. CAIA Comparative Table
|Certification Organised By||CFA is organized by The CFA Institute (American Based Institute)||Chartered Alternative Investment Analyst Association|
|Exam/Window||CFA Part I, II & III level exams are conducted on the first Saturday of June every year, Part I exam can also be taken in December||Level I and II
Exams are held in February and March
Level I: February 27–March 10, 2017
Level II: March 13–24, 2017
|Subjects||Ethical and Professional Standards|
Financial Reporting and Analysis
|Qualitative analysis, trading theories of alternative investments, Indexation and benchmarking.
Topics include alpha and beta drivers, real estate, hedge funds, commodities, managed funds, private equity, derivatives, funds of funds, and risk management
|Pass percentage||To clear CFA you need Level 1 42%, level 2 46% and for level 3 54%.|
The 14-year average pass rate for all three levels of CFA (from 2003 to 2016) was 52%
|CAIA Level 1 Exams 2015 Pass Rates :- 66%
CAIA Level 2 Exams 2015 Pass Rates :- 67.8%
CAIA level 1 and level 2 Exams 2016 Pass Rates :- 61% and 66%
CAIA level 1 Exams March 2017 Pass Rates :- 62%
|Fees||CFA fee is approximately $1350 including registration and examination.||Early:- Oct 11–Nov 22, 2016 $1,150.
Enrollment fee:- $400. Exam fee $400.
Standard:- Nov 22,2016–Feb 14,2017. $1,250.
Enrollment fee:- $400. Exam fee $400
|Job opportunities||Investment banking, portfolio management and equity research||Analysts at hedge funds or private equity funds|
Why Pursue CFA?
The CFA study program covers almost the entire subject in its entity, but it skims through the topic giving an overall outlook to the student. It also covers alternative investments but not in detail. However, CFA is a global brand, and the institute enjoys a large membership base. This designation is considered the preferred course to achieve a better and broader scope in traditional investment.
CFA should be the ideal course for you if you are looking to carve out a niche in the traditional investment roles, such as fund managers and security analysts. The certificate program does not enjoy a high rate of passing and therefore has a prestige associated with it, which makes a professional stand out in the eyes of his employer.
Unlike other international certifications, CFA is cheaper and gives you a good grounding base about the financial markets and improves your expertise and knowledge.
You may have a look at a detailed note on the CFA examination guide for further details.
Why Pursue CAIA?
CAIA is a perfect course for those individuals who wish to fill the educational gap to rise quickly in the alternative investment field. The CAIA designation holders are relatively less than CFA charter holders and give a good chance to a candidate to stand out from the rest in the job market.
CAIA is seeing tremendous growth in the last few years, and anyone interested in a specialization should prefer this course. The pass rates for CAIA are quite high; however, it does not directly open the doors to big opportunities.
However, CAIA helps in achieving more client base and professional networking connections through membership in global chapters.
You have all the necessary information in this article, its time you weigh your options carefully and decide. After all, you alone are responsible for shaping your career. We wish you all the luck and hope you find greater success in whichever course you opt to study.
This has been a guide to CFA vs. CAIA. Here we discuss the key difference between them along with infographics to help you choose the right career. You can learn more from the following articles –