If you are at a crossroads and wondering if you should pursue the CFA® Program, you are not alone! Given the time, money, and dedication it takes to become a CFA charterholder, it’s important to know if the investment needed to pass the CFA exams is worth it.
In this blog, we’ll take a deep dive into the many benefits of becoming a CFA charterholder, exploring how this esteemed designation can benefit students, industry professionals, and even those from non-industry backgrounds.
Advantages of Earning the CFA Charter
Whether you have a finance background or a non-finance background, there are many advantages on your journey to the CFA charter. These include reputation, recognition, career progression, job opportunities, and a higher salary and these top benefits of the CFA charter designation.
Passing the CFA exam is the critical first step on your journey to becoming a respected professional in the finance and investment industries. See our Beginners Guide to the CFA Charter to help you understand the objectives of the CFA exams.
Global Recognition and Prestige
The CFA Institute (CFAI®) is a non-profit, global association of investment professionals. The organization offers the CFA designation and provides investment professionals with curriculum and study materials to prepare for the CFA exams. The CFAI is recognized in the finance industry as a reputable credentialing organization, and it’s considered to be the gold standard in the field of investment analysis.This makes the CFA charter one of the most respected designations in finance.
Charterholders are highly respected in the global economy and the finance industry, and they are valued by employers. Those who receive the CFA designation are seen as experts in the finance industry. When placing candidates for senior-level finance positions, many employers search for candidates who have the CFA charter on their credentials.
Higher Salary Potential
Another factor to consider is the higher income a CFA designation garners. And this is where your return on investment (ROI) will pay off over the course of your career. According to a survey conducted by the CFAI, the average salary of a CFA charterholder is 31% higher than their non-charterholder counterparts. The median base salary for charterholders in the United States is $180,000, with a median annual bonus of $45,000. However, actual salaries will vary depending on industry, job title, and experience level.
There are only about 100,000 CFA charterholders in the entire world — less than 0.002% of the world’s population as of 2023. When you become a member of the CFAI, you’ll gain an elite network of distinguished finance professionals, who can help you take your career to the next level. Plus, the CFAI hosts events and conferences that provide excellent networking opportunities for charterholders.
Comprehensive Understanding of Finance
You may be asking how do I become a CFA charterholder. The journey to the CFA charter is the same whether you are a finance professional or a non-finance professional. You must meet many requirements and candidates are expected to follow a structured study plan. It takes an average of six months and 300+ hours of study per CFA exam or a total of 900+ hours for all three exams. Before investing two to three years of exam study time, you should determine if you have a passion for finance as well as an interest in the topics covered on the CFA exams.
CFAI Code of Ethics and Standards of Professional Conduct
Additional requirements to receive a CFA designation include, complying with the ethics and professional conduct outlined by the CFAI. According to the CFAI, members, CFA charterholders, and candidates must understand and comply with all applicable laws, rules, and regulations governed under the CFAI Code of Ethics and Standards of Professional Conduct. CFAI members, charterholders, and candidates are expected to act with integrity, honesty, and transparency in all business dealings. To help prepare you for this topic on the CFA exam, see our CFA Ethics: All-in-One Guide with Sample Questions.
Costs of Earning the CFA Charter
Are the CFA exams costly? See CFA registration exam costs and fees for a detailed breakdown of the CFA exam costs and fees outlined below.
- CFA Exam Registration Cost and Fees: These costs vary depending on when a candidate decides to register for the exam. The total cost of all three CFA exams ranges from approximately $2,600 to $4,000, assuming three consecutive passes with no travel and accommodation costs. This does not include third-party prep provider costs, which are highly recommended.
- Study Materials Costs: These costs vary depending on whether you use the CFAI curriculum (all digital; included with registration) alone, or also supplement these with third-party study materials. The CFAI reports that over 75% of candidates use both. The price range for our UWorld CFA Level 1 exam product ranges from $199-$299, depending on your plan: Basic, Standard, and Elite. Hard copies of the CFA exam curriculum books for approximately $299 (plus an additional shipping fee) per level. If you live outside of the United States, import duties and a customs fee are charged upon delivery.
- Travel and Retake Costs: Even though the new computer-based testing (CBT) has over 400+ test locations worldwide, some CFA exam candidates may still need to travel to a test center and possibly stay overnight. These additional costs must be considered for all three levels. Exam retake fees are another significant consideration.
Who Should Pursue the CFA Charter?
The CFA Program is a good choice for those in the finance industry looking for career advancement, non-finance professionals with interest in finance and undergraduates who are considering the many job opportunities for CFA charterholders, including consultant, analyst, financial advisor, portfolio manager, relationship manager, and research analyst. Regardless of your education background, finance professionals, career changers, non-finance professionals, undergraduates and graduate students can all benefit from the career recognition and salary boost that comes with the CFA charter designation. For more information about CFA exam enrollment requirements, see CFA Exam Requirements: Eligibility for Level 1, 2 and 3.
While having prior experience in finance can provide a foundation of knowledge and familiarity with certain concepts, earning the CFA charter is still a rigorous and demanding undertaking requiring a well planned study strategy. The CFAI curriculum covers the complete range of topics that are on the exam, including ethics, economics, and financial reporting and analysis. With mastery of these areas, the CFA charter will equip you with the skills and knowledge required to excel in your finance-related role.
Non-Finance Professionals and Undergraduates
While having a background in finance is beneficial, it is not a prerequisite. With the right drive and determination you can pass the exams and become a CFA charterholder without a finance background. To gain a comprehensive understanding of the CFA exam topics and successfully pass the three required exams (Levels I, II, and III), candidates will typically benefit from additional exam preparation. This additional preparation aids in mastering the breadth and depth of the exam curriculum.
The CFA exam is a weighted exam, and you’ll want to know which topics require more exam prep based on the percentage allocated to each topic. This is where study materials from UWorld can help you get ahead in your exam prep. The CFA Level 1 QBank includes 2400+ practice questions and explanations and digital flashcards, review notes, and performance metrics to track the CFA exam topics where you excel and the topics where you need improvement.
Tips for Success in the CFA Program
A good place to start your CFA exam study is with a review of the CFAI study materials and official curriculum, which can be accessed on your laptop, tablet, or mobile phone. But you’ll also want to use additional digital resources to complement the CFAI study materials that include performance metrics to track your progress by topic, like the CFA Level 1 exam study materials and QBank that includes hundreds of practice questions to improve your chances of passing the CFA exams the first time.
- Develop a Study Plan Have a plan that includes ways to sharpen your study skills; and brush up on your math skills. Include practice questions and mock tests that mimic exam conditions. For more details, see our Ten Tips for CFA Level 1 Candidates.
- Utilize Resources The CFAI study materials and resources include a detailed study guide for each level of the exam along with the mobile learning program’s curriculum, mock tests, and exam-format practice questions.
- Practice Active Learning Strategies The benefits of using active learning include improved critical thinking skills, increased retention, application of new information, and increased motivation. See our exam prep tools for Active Learning for the CFA exam.
- Connect with CFA Charterholders and Peers You can get a head start on your career as a finance professional by becoming a CFAI member. See more about membership for CFA program candidates.
Challenges and Strategies for Non-Finance Majors to Pass the CFA Exam
The CFA charter is a great step in a finance career, no matter your starting point. And passing the CFA exams is possible, even without a finance degree. To pass the exam, give yourself every possible advantage. Here are some study tips to help you prepare for the CFA exam.
- Acknowledge Your Ignorance – You are starting a bit behind, compared to someone with a finance background. However, if you are disciplined and follow the 300-hour study rule, you can pass the CFA Level 1 exam.
- Get the Right Calculator and Learn How to Use It – The more fluent you are in using your calculator, the more time you save on the exam with questions that require calculations. Learn all the calculator functions and formulas. Practice makes perfect.
- Learn the Vocabulary – Learn the language of the investment industry. From the textbook vocabulary to the jargon of a trading desk, there’s a lot to master. Once you know the terms, you’ll be able to answer the questions more easily.
- Brush Up on Math Skills – Sure, you’ll have your calculator, but knowing the math will help you answer questions more quickly in a paced exam setting.
- Read the Curriculum – On exam day you will need to take the time to read the explanation for each multiple-choice question. To prepare for the exam, review the CFAI curriculum study materials and practice answering questions from the UWorld CFA QBank, which provides multiple-choice questions with detailed explanations in the same format as questions found on the exam.
- Plan to Spend More Time Getting to know the Topics on Each Level – The more familiar you are with the exam topics and the vocabulary on each exam, the easier it will be for you to master the curriculum on exam day. The CFA exams consist of three levels, each covering different topics in increasing depth and complexity. While the emphasis on specific topics may vary between levels, there are certain subjects that candidates should generally focus on across all three levels. It’s important to note the specific weightage of each topic may change from year to year. It’s advisable to refer to the official CFAI exam curriculum and guidelines for the most accurate and up-to-date information.
Overall, there is no question that the benefits of a CFA charter are well worth the time and effort required for finance majors and non-finance majors. UWorld Finance is here to make the path ahead of you easier with a study plan that incorporates our CFA exam prep QBanks for Level 1 and Level 2 and digital tools needed to pass the CFA exams. If obtaining the CFA charter is your goal, UWorld Finance is your roadmap to getting you there.