If you want to become a CFA charterholder, you must first pass exams in five areas of investment knowledge. The Chartered Financial Analyst (CFA) Program is unlike any other course or academic designation in the world. To become a CFA charterholder, you must pass three levels of exams: Level I, Level II and Level III.
how to become a cfa
The first step is NOT to show you how to enter the CFA program. It is on WHY you want to be one and whether it’s worth it.
1. Identify Benefits of the CFA Designation
The CFA Institute grants the CFA designation. To enter the CFA program, you need to become a member and pay annual fees.
How can you gain as a CFAI member?
- A ticket to take the CFA exam
- Networking opportunities
- A place to go to for resources in developing your skills as a finance professional
Here are more reasons for your consideration:
- 5+3 reasons why you want to be a CFA charter holder
- Why you should NOT go for the CFA designation
- Pros and cons analysis by Investopedia
2. Compare CFA Designation with Other Qualifications
To see if CFA is the one to go for, you have to spend the time researching other relevant qualifications.
There isn’t one that matches exactly with CFA, but a few are close enough in terms of the industry coverage and level of recognition.
If you are a finance professional with lots of exposure in accounting (or vice versa), CPA is a good choice, and we recommend taking a closer look at that. If you are more into risk management, FRM could be an equally good qualification.
You can also learn about finance, investment and management from an MBA as well.
3. Determine the Difficulty: Can You Make It?
The CFA exam is notorious for its difficulty. Level 1 has a very wide coverage, Level 2 goes deeper in similarly wide coverage, and Level 3 is a beast.
Unlike most US professional exams, the CFA program is a marathon, as it takes several years to complete the whole program.
A typical candidate spends 300 hours for each level, meaning 900 hours for the entire exam (and this doesn’t count possible retakes).
Are you ready for this challenge? Back to the first point, have you identified one solid benefit to make the CFA investment worth it?
4. Evaluate the Benefit vs. Cost
Ultimately, most of us get licenses and qualifications for a better future regarding career prospects and salary.
The CFA program is expensive at $3,000 at the bare minimum. This does not count the intangibles such as the time, sweat and tears involved. It is a good idea to perform a SWOT analysis and make sure this investment makes sense.
Looking at the longer term, does the CFA title help your personal and professional growth?
- Top 10 CFA hirers
- CFA salary information according to Payscale
- CFA compensation from Glassdoor
5. Fulfill the Exam Requirements
The entry barrier of the CFA exam is surprisingly low. You are qualified as long as you have a bachelor’s degree in any discipline. Even if you don’t have a university degree, you can still take the exam as long as you have 4 years of experience in any field.
This means that practically anyone who either studies or works for 4 years after high school can sit for the exam.
Specifically, to take the first (Level 1) exam, you need to have:
