Full Form of CFA

Updated on April 17, 2024
Article byWallstreetmojo Team
Edited byWallstreetmojo Team
Reviewed byDheeraj Vaidya, CFA, FRM

Full Form of CFA – Chartered Financial Analyst

The full form of CFA is a Chartered Financial Analyst. It is a globally recognized professional qualification that provides a candidate with knowledge of subjects like accounting, economics, capital markets, money management, security analysis, etc. which helps an individual boost their career in the financial services sector.

CFA is a qualification provided by the CFA Institute, established in 1947. Over these 70+ years, the CFA program has emerged as the benchmark qualification for the investment industry.

Key Takeaways

  • CFA, which stands for Chartered Financial Analyst, is a highly regarded professional certification. This credential encompasses diverse subjects such as accounting, economics, capital markets, money management, and security analysis. 
  • Holding a CFA certification can be a significant advantage for individuals seeking career advancement in the financial services industry.
  • The CFA Charter is a rigorous program that demands self-study and is administered by the CFA Institute. To attain a CFA Charter and become a Chartered Financial Analyst, candidates must successfully clear three levels of exams sequentially.

Why Pursue CFA?

If one wants to decide on whether to choose CFA as a career option or not, following are the few factors that may help in coming to a sensible decision,

  • That certification is globally recognized, with over 167,000 professionals around the world. It is recognized in a minimum of 30 countries, which provides access to career options worldwide.
  • It provides an edge for getting into the world’s biggest companies in the financial services sectors. Companies like JP Morgan Chase, Pricewaterhouse Coppers, HSBC, Ernst & Young, Morgan Stanly, and Bank of America are examples.
  • CFA, when compared to an MBA program, is a more affordable program. CFA costs $ 3,000 to $ 5,000 based on what time you register and what study material you opt for, compared to $ 70,000 to $ 100,000 for an MBA.
  • It provides in-depth knowledge in investment analysis, asset management, and ethics.
  • It allows you to gain analytical skills and expertise in quantitative methods, economics, financial reporting, investment analysis, and portfolio management. This set of skills and knowledge you will develop as you become a CFA charter holder will serve you well throughout your career.
  • It provides various career options such as portfolio manager, risk manager, research analyst, and many other investment industry profiles.

Therefore, if your goals match the things offered by CFA Certification, it can be one of the courses to opt for. Also, it is good to know that the CFA charter is a highly selective process. Fewer than one in five candidates become a CFA charter holder.

Full-Form-of-CFA

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Exam Levels and Format

CFA charter is a self-study program designed by the CFA Institute. To become a Chartered Financial Analyst and hold a CFA charter, one must clear three examination levels sequentially.

CFA-Exam-Levels

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LEVEL I

Exam Format: Multiple choice questions

The CFA Level I exam consists of 240 multiple choice questions, split between two 3-hour sessions. Candidates must attend both sessions.

  • Morning session (3 hours): 120 MCQs, covering all topics
  • Afternoon session (3 hours): 120 MCQs, covering all topics

The topics covered on CFA Level I are,

  • Ethical and Professional Standards
  • Quantitative Methods
  • Economics
  • Financial Reporting and Analysis
  • Corporate Finance
  • Portfolio Management and Wealth Planning
  • Equity Investments
  • Fixed Income
  • Derivatives
  • Alternative Investments

Exam dates: The level I examination is conducted twice a year, i.e., in June and December.

Passing rate: The pass rate for the June 2019 Level I CFA Program exam was 41%. 

LEVEL II

Exam format: Multiple choice questions

The CFA level II exam consists of 120 MCQs divided into 20 sets of 6 questions each and are divided into two sessions.

The topics covered on CFA Level II are,

  • Ethical and Professional Standards
  • Quantitative Methods
  • Economics
  • Financial Reporting and Analysis
  • Corporate Finance
  • Equity Investments
  • Fixed Income
  • Derivatives
  • Alternative Investments
  • Portfolio Management and Wealth Planning

Exam dates: The level II examination is conducted annually, i.e., in June.

Passing rate: The pass rate for the June 2019 Level II CFA Program exam was 44%.

LEVEL III

Exam format: Written Examination

The CFA level III is a written examination, which differs from levels I and II. The questions are more like case studies.

The topics covered on CFA Level III are,

Exam dates: The level III examination is conducted once a year, i.e., in June.

Passing rate: The pass rate for the June 2019 Level III CFA Program exam was 56%.

After passing all three levels of examination, if an individual wishes to apply for the CFA charter, he must comply with the institute’s work experience norms. This norm states that the person must have professional work experience in the relevant field for four years (48 months).

Eligibility

To be eligible for the examination, one must have a bachelor’s (or equivalent) degree or be in the final year of a bachelor’s degree at the time of registration. Also, he is required to hold a valid international passport.

To hold the CFA charter and the above condition, one must pass all levels of the CFA examination and have a professional work experience of 4 years (48 months). After this, one can apply for CFA membership.

Examination Fees

One-time registration fees are USD 450
Early registration fees for all levels are USD 700
Standard registration fees for all levels are USD 1,000
Late registration fees for all levels are USD 1,450

How to Enroll for CFA Exams?

To register for CFA exams, one can visit the official website of the CFA Institute. The link for registration is https://www.cfainstitute.org/en/programs/cfa/register

Salary

Salary-of-CFA

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Chartered Financial analyst is a globally recognized qualification in finance. Newly qualified Chartered Financial Analysts can have an average salary of Rs. 5 lacs to Rs. 10 Lacs per annum in India and experience in the field eventual hike.

Frequently Asked Questions (FAQs)

1. What is the role of CFA?

The Chartered Financial Analyst (CFA) designation signifies investment management and financial analysis expertise. CFAs are skilled professionals who are knowledgeable in areas such as portfolio management, asset valuation, risk management, and ethical standards. They often work in investment banking, asset management, equity research, and financial planning roles.

2. Is CFA harder than CA?

Comparing the difficulty of the Chartered Financial Analyst (CFA) and Chartered Accountant (CA) programs can be subjective as they focus on different areas of finance and accounting. Both programs are rigorous and require significant dedication. The CFA program emphasizes investment analysis, while the CA program covers accounting, auditing, taxation, and business laws.

3. Which CFA level is the hardest?

Among the three levels of the CFA program, Level II is often considered the most challenging by candidates. Level II delves deeper into investment analysis and valuation, covering a wide range of topics such as equity analysis, fixed-income securities, derivatives, and alternative investments. The exam questions are detailed and require a comprehensive understanding of the material.

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