CFA vs CWM

Difference Between CFA and CWM

CFA is the abbreviation used for Chartered Financial Analyst and this course is offered by the CFA institute and it enables aspirants to have in-depth knowledge of complicated areas pertaining to finance whereas CWM is the short form for Chartered Wealth Manager and this course is offered by the AAFM (American Academy of Financial Management) and it enables aspirants to learn the basics of wealth and asset management.

Which is Better? Certification courses are in abundance, and a great deal of worry for many students is which one to pursue. On one side, we have the CFA examsCFA ExamsThe Chartered Financial Analyst (CFA®) Program offers a graduate-level curriculum and examination program designed to expand your working knowledge and practical skills related to investment decision-making. read more, considered to be the gold standardThe Gold StandardThe gold standard was a monetary term used when gold exchange was used instead of paper currency.read more among the finance certification exams. If you have a keen interest in Portfolio Management, Investment Management, equity researchEquity ResearchEquity Research refers to the study of a business, i.e., analyzing a company's financials, performing Ratio Analysis, Financial forecasting in Excel (Financial Modeling), & exploring scenarios to make insightful BUY/HOLD/SELL stock investment recommendations. Moreover, the Equity Research Analysts discuss their findings & details in the Equity Research Reports. read more, and Investment BankingInvestment BankingInvestment banking is a specialized banking stream that facilitates the business entities, government and other organizations in generating capital through debts and equity, reorganization, mergers and acquisition, etc.read more, CFA suits you more. However, Chartered Wealth ManagerChartered Wealth ManagerCWM stands for Chartered Wealth Manager, and the American Academy of Financial Management (AAFM) established this certification in 1996. There are two levels of examination: level 1 is the Foundation level, which is a two-hour exam for 100 marks, and level 2 is the Advanced level, which is a three-hour exam for 160 marks.read more (CWM) is a certification best for professionals in Wealth Management, Private Banking, Family Offices, and Financial Advisory. In this article, we detail the differences between the two and help you clear the confusion.

CFA-vs-CWM

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CFA vs. CWM Infographics


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Let’s understand the difference between these two streams with the help of this CFA vs. CWM Infographics.

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CFA vs. CWM Comparative Table

SectionCFA  CWM
Organizing BodyThe organizing body for the CFA exams is the Chartered Financial Analyst (CFA) Institute, USA.The organizing body for the CWM exams is the American Academy of Financial Management (AAFM), USA.
PatternThe course is divided into three sequential levels – Level-I, Level-II, and Level-III.The course is divided into sequential two levels – Level 1 (Foundation Level) and Level 2 (Advanced Level).
Duration of CourseThe candidates can complete the course in a span of 36-48 months if they clear each exam on the 1st attempt.The candidates need to complete the course in a span of 36 months.
SyllabusThe syllabus primarily covers the following topics

  • Economics
  • Ethics & Professional Standards
  • Corporate Finance
  • Portfolio Management
  • Fixed Income
  • Alternative Investments
  • Equity Investments
  • Derivatives
  • Financial Reporting and Analysis
  • Quantitative Methods
The syllabus primarily covers the following topics

  • Global Financial System
  • Behavioural Finance in Wealth Management
  • Wealth Management in Banking
  • Intergenerational Wealth Transfer
  • Investment Vehicles of Wealth Management
  • Managing Investment Risk
  • Equity Analysis
  • Alternative Products in Wealth Management
  • Real Estate Valuation and Analysis
  • Portfolio Management Strategies
Exam FeesThe cost breakup of the course is as follows

  • One-time registration fees of $450
  • Exam fee for each level vary between $700 to $1,000 depending on the time of registration
The cost breakup of the course is as follows

  • Registration fee of $400 that is valid for one year
  • The exam fee for Level 1 is $200
  • The exam fee for Level 2 is $600
  • The re-examination fee is $200  Certification fee is $100
JobsSome of the common profiles include

  • Strategic Analyst
  • Investment Analyst
  • Financial Consultant
  • Wealth Manager
  • Portfolio Manager
Some of the common profiles include

  • Wealth Manager
  • Financial Controller
  • Asset Manager
  • Market Analyst
DifficultyThe exams are very difficult. The pass rates for the exams conducted in June 2019 were

  • Level I: 41%
  • Level II: 44%
  • Level III: 56% [Source: CFA Institute]
There is no information available in the public domain pertaining to the success rate of the candidates. However, it is known that the passing criterion for the exam is a 50% score.

 

 

Exam DateThe schedule of the upcoming exams for the year 2021 is as follows

  • Level I: Feb 16-Mar 01, May 18-24, Aug 24-30 & Nov 16-22
  • Level II: May 25-Jun 01 & Aug 31-Sep 04
  • Level III: May 25-Jun 01 & Nov 23-25
The candidates can schedule the exams only on the 10th and the 20th of every month.

What is CFA?


The certification program is conducted by the American based CFA Institute (formerly the Association for Investment Management and Research, or AIMR). This course is an ideal path-breaking experience for finance and investment professionals looking for a career boost. The course provides a solid foundation in advanced investment analysis and real-world portfolio management, which is appreciated by industry insiders globally. The study format is designed to meet the demands of the growing investment industry, looking for sharp skills to accelerate market growth and the companies. Considering this aspect to be a major factor in initiating this course, the CFA institute pays utmost regards to ensure the syllabus is updated regularly and continuously meets the demand of the market. The course covers topics like investment management, financial analysis, stocks, bonds, and derivativesDerivativesDerivatives in finance are financial instruments that derive their value from the value of the underlying asset. The underlying asset can be bonds, stocks, currency, commodities, etc. The four types of derivatives are - Option contracts, Future derivatives contracts, Swaps, Forward derivative contracts. read more, and provides a generalist knowledge on other areas of finance. On successful clearance of the exam, the candidate is awarded the right to be a CFA chart holder and is equipped to advise companies and institutions like banks, mutual fundsMutual FundsA mutual fund is an investment fund that investors professionally manage by pooling money from multiple investors to initiate investment in securities individually held to provide greater diversification, long term gains and lower level of risks.read more, insurance companies, and other financial institutions.

What is CWM?


The Chartered Wealth Manager is a certification problem best for professionals in Wealth Management, Private Banking, Family Offices, and Financial Advisory. This international certification program is conducted by the American Academy of Financial Management based in the United States. The certificate program marks excellence and is recognized and accepted worldwide in the finance industry, including the Global Wealth Management Industry and the Private Banking Community.

The Chartered Wealth Manager (CWM) is the highest Designation that a professional can achieve in Wealth Management & Private Banking. The CWM’s core thrust is capital and financial marketsFinancial MarketsThe term "financial market" refers to the marketplace where activities such as the creation and trading of various financial assets such as bonds, stocks, commodities, currencies, and derivatives take place. It provides a platform for sellers and buyers to interact and trade at a price determined by market forces.read more theory, financial services organization principles, portfolio management, investment management, and other skills related to the field. A CWM designation is a benchmark for professionals to fulfill certain financial management responsibilities, and it allows an employer to entrust him with the responsibility of assessing the value of companies, perform financial estate analysis, understand portfolio management time horizon, balance risk and returns, identify market opportunities, market products, handle asset allocationAsset AllocationAsset Allocation is the process of investing your money in various asset classes such as debt, equity, mutual funds, and real estate, depending on your return expectations and risk tolerance. This makes it easier to achieve your long-term financial goals.read more and manage clients.

CFA vs. CWM Exam Requirements


CFA exam requirements

A student is eligible to sit for the CFA exam only if he has a bachelor’s (or equivalent) degree or is 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 he has a minimum of four years of professional experience. A candidate on successfully clearing the exam requires fulfilling the mandate of four years of experience to achieve the certificate of the CFA program.

CWM Exam Requirements

To be eligible for the CWM exam, a candidate is required to have a graduate degree or education equivalent to a post-graduate, which is approved by the AAFM and a minimum of three years of wealth management experience.

Why Pursue CFA?


  • The CFA program bridges the gap between market demand and a professional. The program ensures the candidate’s aptitude is developed according to the current practice of the industry.
  • The difficulty level of the CFA exam ensures students put in the quality effort and rigorously study to stand out in the eyes of the employer.
  • The CFA hones a candidate’s practical skills, thereby making him an asset for his company, providing him with a competitive edge and increasing his chances of a hike in the future.
  • The CFA program is cheaper than the other certifications and provides a piece of sound knowledge about the financial markets, increasing a candidate’s expertise level and knowledge.

Why Pursue CWM?


  • The CWM designation commands the respect of the consumers as well as professionals of the industry.
  • The CWM adds value to your resume-boosting your career prospects immensely.
  • CWM opens up doors of multiple opportunities and among them is the confidence to start your own business.
  • The CWM is the best qualification a professional can achieve in the Wealth Management Industry. Therefore, this designation in a candidate’s profile increases his access to industry events and networking opportunities.

Conclusion


CFA exams are an ideal path-breaking experience for finance and investment professionals. It provides a solid foundation in advanced investment analysis and real-world portfolio management, which is appreciated by industry insiders globally. However, CWM is the best qualification a professional can achieve in the Wealth Management Industry. CWM is a difficult exam. Candidates have taken at least four attempts to clear it, so the quality should be spent studying.

Choose the one that excites you the most!

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