The Chartered Financial Analyst (CFA®) program is widely recognized as a prestigious and demanding course of study for finance professionals. The CFA Institute (CFAI®), the organization that administers the CFA program, provides a comprehensive curriculum covering a wide range of investment management and analysis topics. However, the question remains: Is using just the CFA Institute curriculum enough to pass the CFA exam and become a successful finance professional?
Why CFAI Curriculum In the First Place?
The Chartered Financial Analyst (CFA) curriculum covers a wide range of topics in investment and finance, including ethical and professional standards, economics, financial reporting and analysis, corporate finance, portfolio management, and quantitative methods. The curriculum is divided into three levels, each building upon the material covered in the previous level. If you’ve decided to pursue a long-term and prosperous career in finance, passing the CFA exam and going through the required coursework is an excellent method to ensure you have a solid knowledge base and superior technical abilities.
Advantages of using the CFAI curriculum include
- It is the official and most up-to-date study material for the exam
- It is created and reviewed by experts in the field
- It is closely aligned with the exam content and format
- All Level 1-3 exam questions are derived from it
- The CFA curriculum fills the holes in your knowledge of finance
While the CFA Institute curriculum is necessary for passing the exam, more applied experience is needed to become a successful finance professional. For example, the CFA curriculum does not cover the day-to-day skills necessary for working as a portfolio manager or research analyst. These skills include Excel modeling, financial statement analysis, Bloomberg terminals, and industry research. Additionally, the CFA curriculum does not cover the soft skills necessary for working in a team-oriented environment, such as communication and leadership.
Can the CFAI Curriculum Be Completely Ignored?
A clear answer to this question is, No! The CFA Institute curriculum is helpful for CFA exam preparation, especially in Levels 2 and 3, and here’s why:
- It covers everything, including weaker topics that third-party providers may omit
- Ethics is an important and heavily weighted topic in the exam, so it’s worth studying in-depth from the curriculum
- The end-of-chapter questions are a valuable resource for practice
- The curriculum is an authoritative source for understanding concepts and the Learning Outcome Statements used in the exam
- Additionally, the curriculum is the best place to go if you want to learn the underlying topics
Ultimately, irrespective of the study channel you choose, it entirely depends on your learning style and needs. Some students may find the official CFA curriculum sufficient, while others may benefit from additional study materials and resources provided by third-party providers. It is advisable to research and compare different CFA prep providers and select the best fit for your needs and budget.
Supplementing the CFAI Curriculum to Pass the Exams
You can pass all three levels of the CFA just by using the provided materials. However, taking that route, you need to prepare yourself to thoroughly review the following scale of these materials, in a digital .pdf format:
|Curriculum # of Pages
With this robust and complex curriculum, the CFAI reports that over 70% of candidates also choose to use a 3rd party prep provider as a supplement. Moreover, prep providers effectively stream the material to the required information. Also, they offer many platforms for consuming content that best suits an individual’s study habits or lifestyle. This can help the candidate comprehend and retain the information better and save them a lot of time.
Advantages of using third-party prep providers include
- They may offer additional study aids, such as practice questions, flashcards, and video lessons
- They may have experienced instructors who can provide additional explanations and insights
- They may have adaptive learning tools that can help target areas where the student needs improvement
- Many candidates report the CFA curriculum is extensive but not as readable compared to third-party materials. They state that it usually takes too much time to go through the content, yet they end up not having covered enough of the syllabus by exam day to pass.
Supplementing the CFAI Curriculum to Get Hands-on Experience
Coming out of college or the CFA program with hands-on knowledge can give you a real advantage over other candidates. Top firms are looking for academically strong students and those with applied experience so they can contribute to the organization faster.
There are several ways to do this:
- Practicing Excel modeling and financial statement analysis using real-world examples
- Reading industry research and staying current on market trends
- Participating in case studies or simulations to gain practical experience in investment analysis and portfolio management
- Building a network of professionals in the finance industry who can provide guidance and mentorship
- Applying for finance internships during university studies
Moreover, prep providers are effective at streamlining the material to the specific information required. Also, they offer many platforms for consuming content that best suits an individual’s study habits or lifestyle.
So, what’s the verdict?
The Verdict: CFAI Curriculum vs. Third Party prep provider
Here’s a quick face-off that highlights some deciding factors that will help you in choosing your primary study material.
|Third-Party Prep Providers
|Official Study Material
|Alignment with Exam Content
|Additional Study Aids
|Adaptive Learning Tools
|Variable: Depending on the level
|Variable: Depending on the provider
|Please note that this table is a generalization and actual offerings may vary depending on the provider and level. It’s always advisable to research different providers and compare their features before choosing one that best fits your needs and budget.