6 Ways the CFA Designation Will Propel Your Finance Career
So, you want to be a chartered financial analyst or a CFA charterholder. However, before you enroll in that CFA course, remember that it will take you at least three years or 36 months before you can be awarded a CFA charter.
That's 4,000 hours of relevant work experience that you must accumulate in 36 months or longer. Aside from earning all that experience, you also have to sit for and pass three CFA level exams.
Is it worth it? You can wager all that you have that it is. Here are six ways being a CFA charterholder will propel your investment career.
1. Gain a Globally Recognized Credential
The CFA designation stands out to anyone in the finance and investment management industry, no matter where they are in the world. It is an efficient way to say you're qualified to handle investment portfolios and fulfill the role of an equity researcher, an investment analyst, an investment banker, or an asset manager.
Therefore, the CFA designation by your name on your curriculum vitae is a surefire way to catch someone's attention. Here's what you can imagine these three letters are saying to someone in the know – specifically, the person bearing the CFA designation:
● Has a minimum of three years experience in work that is directly or indirectly related to investment decision-making
● Has taken and passed three rigorous exams, each exam approximately four and a half hours long, answering a grand total of nearly three hundred multiple-choice exam questions and crafting written responses to mentally exhausting essay-writing questions
● Has been able to provide at least two professional references on his work experience
● Has a bachelor's degree, a combination of college schooling and work experience, or an equivalent professional experience
● Has learned ethical and professional standards
● Knows and has used investment decision-making and financial analysis quantitative methods
● Knows market structures and the business cycle and is capable of analyzing aggregate demand and supply and economic growth factors
● Is capable of creating, reading, and analyzing financial reports, knows financial reporting standards, and is aware of the effect of accounting methods on financial statements
● Knows about leveraging and how to manage working capital so he can meet short-term operational targets
● Knows how to make investment and financial decisions and has a deep knowledge of corporate governance, including corporate governance and stakeholder management frameworks
● Has both conceptual and practical knowledge of equities, security markets, indexes, fixed income securities, derivatives, derivatives markets, arbitrage, forwards, contingent claims, futures, swaps, hedge funds, real estate, private equity, and commodities, among others
● Knows how to perform investment risk analysis and how to manage risks
● Knows the capital asset pricing model
● Can build, maintain and administer an investment portfolio that satisfies the needs of an individual or institutional investor
Indeed, earning the CFA designation is akin to telling the world you are more than qualified to handle an individual or an organization's investments.
2. Deepen Understanding of Finance and Investment Topics
In the CFA Program Candidate Survey Report of 2019, 97% of CFA charter candidates agreed that the CFA program curriculum improved their understanding of important topics. Additionally, 95% of candidates agreed that the CFA program curriculum focuses on topics essential to their profession.
Indeed, enrolling in the CFA program is truly beneficial to those who want a career in investment management and finance. You might learn the basics in your economics and business classes in college. However, the CFA program curriculum is designed to immerse a learner in the field in such a way that he understands the concepts in theory and is also able to apply them in practice.
3. Learn Current Industry Practices and Real-World Practices
The CFA program is also highly dynamic, ensuring that it evolves with the times and remains grounded in practice. In fact, the CFA candidate body of knowledge is a curriculum that has been developed and continues to have input from actual investment professionals worldwide.
In other words, the analytical and valuation frameworks, calculation methods, and management techniques you will learn while studying for the CFA exams are the same frameworks, methods, and techniques real-world investment professionals actually use.
Thus, when you enroll in the CFA program, you will be able to learn concepts and strategies that you will use and actually apply on the job. In fact, 95% of the candidates surveyed by the CFA Institute in 2019 reported that the CFA curriculum reflects current industry practices.
4. Better Chances of Landing a High-Paying Job
According to the CFA Institute, the base salary for a portfolio manager with a CFA designation is USD 126,000. This is well within the USD 113,236 to USD 156,158 salary range identified by Salary.com for investment portfolio managers in the United States.
When bonuses and other incentives are added to the base salary, the CFA institute pegs the typical total compensation of a CFA charterholder at USD 177,000. This is beyond the USD 113,314 to USD 169,426 compensation range indicated on Salary.com for investment portfolio managers.
There is no question that investment portfolio managers earn big salaries and incentives, and it just so happens that investment portfolio management is one of the most popular jobs among CFA charterholders.
Other typical jobs include equities research, investment consulting, risk analysis and management, asset and wealth management, commercial and investment banking, and insurance.
5. Higher Opportunity for Growth in Your Company
The CFA designation will give you one clear and immediate benefit if you are already an investment specialist or practitioner. Specifically, it should make you one of the frontrunners for promotion.
6. Establish Connections with Members of the Industry
It is easier to form professional connections with investment professionals who have the CFA designation when you are a CFA charterholder yourself. CFA professionals know how hard they had to work to achieve their CFA credentials. Therefore, they will be the first to acknowledge the capabilities of other chartered financial analysts.
Why is this important? In the world of finance and investments, connections are invaluable.
Become a CFA Charterholder
If you want a successful career in investment management, you should seriously consider enrolling in a CFA program and becoming a CFA charterholder. The CFA designation should be proof enough that you have the knowledge, experience, and problem-solving skills employers require in investment and finance.