The Chartered Financial Analyst® (CFA) is considered the gold standard in the finance and investment industries. As an investment management/finance professional, the CFA charter is the most distinguished designation you can receive. Faster career growth, higher salary, and instant respect and credibility are just a few benefits a CFA charterholder will receive with the designation. Charterholders who specialize in investment research and portfolio management, for instance, are equipped to manage a company's financial goals. After obtaining the CFA certificate, you will be well-positioned for effective professional progression as well as recognition on a worldwide scale.
To obtain the CFA designation, you must pass three difficult exams. The low percentage of successful candidates on these examinations reflects the difficulty of all three levels. Learn about CFA charterholder job opportunities and benefits that are available to charterholders.
Most Common CFA Charterholder Career Paths?
The path to becoming a CFA charterholder is lengthy and demanding; however, the rewards that come with earning the designation makeup for more than all the difficulties encountered along the way. Although a CFA charterholder has access to a wide variety of professional options, the following positions are most often chosen by charterholders:
- Corporate Finance Analyst
- Financial Advisor
- Portfolio Manager
- Relationship Manager
- Research Analyst
- Chief Executive Officer
CFA charterholders also work in banks as investment bankers and in various positions in the accounting profession. In addition to gaining access to countless career opportunities, finance professionals who commit to putting in the time and effort to acquire the CFA charter typically succeed in any career path they choose.
Impact of the CFA Charter on Your Finance Career
For those professionals working as research analysts or asset managers, the CFA charter is almost a must. The CFA program is intended to cover all aspects of the finance and investing industries. Therefore, it is the highest distinction you can achieve in your career as an investment management/finance professional.
If you want to optimize your long-term career potential in the financial business, studying the curriculum is an excellent approach to guarantee you have a solid knowledge foundation and superior technical abilities. Suppose you want to invest professionally in one of the following occupations. In that case, it may serve as a launching pad for you to get started in the following fields:
- Portfolio management
- Pension funds
- Hedge funds
- Fund of funds
Sectors Where The CFA Charterholders Are In Demand
The CFA program is meant to highlight charterholders as significant assets for assessing, choosing, and managing derivative instruments, as well as stocks and fixed income. Traditional investment advisors, such as mutual funds, as well as alternative investments, like hedge funds, underwriting, fixed income, and private equity, have a high demand for CFA charterholders. They operate on both the buy and sell sides of deals.
Portfolio management continues to dominate other CFA charterholders' career areas by a significant margin. This is likely due to the specific skill set honed by the CFA program.
The other high-performing sectors include:
- C-level executive
- Investment strategy
- Risk management
An expert CFA charterholder determines their intrinsic values and protects investors from dangers like inflation. Charterholders are also in the business of providing consultancy services to businesses that need assistance with internal risk management and analysis. The CFA program also provides participants with a thorough framework for evaluating derivative products and comprehending the methods of professional arbitrage. They employ curriculum-based ideas to evaluate the value of an asset.
Core Practice Areas
In addition to fundamental analysis, CFA charterholders also examine capital needs and project budgets using a variety of methodologies. To examine the scalability of projects, CFA charterholders make projections on cash flows and run "what if" scenarios. They also provide financial research and investment advice to people with high net worth and institutional customers such as endowments, pension funds, and asset managers.
Risk is an ever-present component in all aspects of finance. CFA charterholders are often responsible for doing risk assessments. With this analysis, they are often concerned with creditworthiness, operational and reputational risk, and financial exposure from financial investments.
Many times, the perspectives of other CFA charterholders provide a comprehensive view of the intricate economic systems of macro markets. The forces driving supply and demand on a global scale may affect the elements going through local development and output in any country on the globe. It is vital to know about international economics to advise investors who desire to distribute cash into local and global markets.
How Do Ethics and Professional Conduct Distinguish a CFA Charterholder?
Even for those who do not possess the CFA charter, the CFA® Institute's one-of-a-kind code of ethics and standards of professional conduct may be seen as a benchmark to which all financial professionals should strive and serve as a model to follow. A significant portion of the CFA exams are dedicated to Ethics and Standards, which provide an opportunity to prove your comprehension by demonstrating how you would safeguard your organization and customers from potential financial loss.
All members of the CFA Institute, as well as candidates striving for the CFA designation, are required to adhere to the Code and Standards, and are strongly urged to inform their employers of this duty. In the event of a violation, the CFA Institute has the right to implement disciplinary measures, including removal of the individual's authority to use the CFA designation, termination of their membership in the CFA Institute or their candidacy in the CFA program.
Employers prefer candidates with the CFA certification for jobs and responsibilities across the board in the global financial services industry, including portfolio management, analysis, private wealth management, and consulting. There are about 160,000 people who have a CFA charter around the globe in 164 different markets. But, what are the majority of CFA candidates doing these days?
Here are the top job functions of employed candidates, as per the CFAI's Candidate Survey 2019.
Top Careers for CFA Charterholders
Following is a briefing on the top five careers held by CFA® charterholders or candidates currently enrolled in the program. For more up-to-date information, please refer to the U.S. Bureau of Labor Statistics on each of the previously mentioned careers.
Financial analysts who work for institutional investors rather than individuals are often employed in buy-side research. They research investments and recommend investments to large investors such as pension funds, hedge funds, or mutual funds. Buy-side researchers earn an average of $108,516 per year. These types of positions are growing at 5% annually.
A consultant works within a company to provide financial advice. They advise the company on how best to increase profit and decrease loss. Financial consultants make an average of $89,330 a year, and the job outlook is growing at 11%.
Investment banking has several subsectors. They assist with initial public offerings, mergers and acquisitions, underwriting, and long-term analysis. Investment bankers have a wider pay range depending on the sector but average approximately $115,000 per year, with a growth outlook of 15%.
Risk management occurs every moment of every day in finance. Risk managers research and analyze potential risks with a potential investment. Managers then weigh the risks against the projected return and decide whether the investment matches the fund's overall goals. Risk management analysts earn an average of $72,858 per year. Job growth in this area is around 9% annually.
Typically, when people mention 'corporate finance' in passing, they refer to the highest-paid and most highly regarded financial segment. By comparison, the average annual wage of highly paid executives in corporate finance is around $107,213, with a job outlook of 1%.
Jobs Without the CFA Charter
Even while the CFA charter doesn't guarantee you a job, if you have one, you have a far better chances of finding the ideal position and moving forward in your financial career. What are your options for a financial career without obtaining the CFA charter?
Most employment in the financial industry requires applicants to have a degree in finance and preferably a CFA certification. This is exacerbated by the fact that banks and financial organizations removed thousands of jobs in the wake of the 2008 global financial crisis.
The probability of advancing one's career in the asset management sector or corporate banking grew with successful completion of each level, ending in favorable employment opportunities for CFA charterholders. Even though it will be more difficult for someone without a CFA charter to get a job in the financial industry, there is still a possibility.
What Kind of Job Opportunities Are Available after Completing Level 2 or Even Level 1?
If you have reached your first goal of passing the CFA level 1 exam, you might be wondering if it will help you in your career. However, finding data on how this affects the recruiting process is scarce.
Those who could get solid entry-level employment after passing the Level 1 exam said that it demonstrated their eagerness to pursue the charter, which was an additional factor that benefited them. It is generally understood that if you want to further your career in finance beyond a certain point, you will need to continue working toward earning your CFA charter. On your resume, it's recommended to state that you are currently a Level 2 candidate versus that you have passed Level 1.
Jobs that are frequently held by individuals who have achieved a passing score on the CFA® Level 1 Exam:
- Interns at Finance Firms
- Accountant or Assistant Accounting Manager
- Investment Administrator
- Fund Analyst
- Asset Manager
- Junior Financial Analyst
- Risk Consultant
- Associate Analyst
- Investment Banking Analyst
- Personal Financial Advisor
- Junior Portfolio Manager
- Junior Equity Research Analyst
It is important to note that many candidates come from a wide range of educational and work backgrounds to apply for the CFA Charter, and not all CFA applicants are finance majors. Even though job opportunities for people with a finance major may be different from those who don’t, the CFA charter is still worthwhile for people who didn’t major in finance.
A CFA candidate with a non-finance background typically possesses diverse knowledge in other business areas. This could be advantageous as they might have a more versatile skill set than someone who has only worked in finance.
If you are a CFA candidate with a finance background and currently working on passing the CFA level 2 exam, some job opportunities could include:
- Equity Research Associate/Analyst
- Rating Analyst in a Rating Agency
- Risk Analyst
- Corporate Strategist
- Financial Planning Analyst
A significant number of multinational corporations place a high value on recruiting and advancing charterholders. Employers that invest in their workers' ongoing education reap several advantages themselves, including a highly trained workforce, a beneficial influence on earnings, and the ability to retain satisfied people in their jobs. When workers are allowed to feel supported, not only do they gain additional training and development, but this also helps discover potential future leaders.
According to the CFA Institute, individuals who possess the charter provide an increased value to their businesses. Charterholders have the breadth of expertise necessary to go beyond the day's headlines to find niche opportunities for their customers, whether they are seeking to invest in a new company or even preparing for retirement. Charterholders must provide an annual reaffirmation that they are adhering to the CFA Code of Ethics and Standards of Professional Conduct, which will ensure that the interests of both your business and your clients come first.
Check out the chart for the top employers in terms of the percentage of their workforce with the CFA designation.