CFA Full form, Subjects, Eligibility & Free CFA Course

CFA full form stands for Chartered financial analyst(CFA), a globally recognised investment finance qualification from the United States. It is the world’s largest investment qualification with around 2.35 lac charter holders world wide in more than 185 countries.

It is one of the most prestigious investment specialisations in the world. If you ask me why I pursued it? Then the answer would be knowledge, and that’s the truth. So, Let’s start discussing whether you should pursue this or not.

Key Takeaways

The most prestigious qualifications in the field of investment banking & Core finance

Specialises in investment management

The minimum Eligibility criteria is the Final year of graduation

Four years of any work ex if not graduate

4.5 Lacs INR To 8 Lacs is the entry-level salary.

Pass rates at level 1 are around 37%

The total cost of pursuing level one is around INR 86000.

What is CFA?

CFA is a globally recognised three-level exam, clearing which a person can apply for a charter. The three levels of exams need to be given in the sequential order of levels one, two and three.

Also, for the person to qualify as a charterholder, the candidate has to prove a minimum of four years of experience in investments. CFA institute was officially formed in 1947 as a non-profit organisation initially called the ‘ National Federation of Financial analysts societies’. So basically, the qualification took birth from societies formed for analysts in the U.S.

Brief Historical Timeline of CFA Designation

  • 1947: investment societies of Boston, Chicago, New York and Philadelphia formed the National Federation of Financial analysts
  • 1959:NFAS board changes the name to ‘ Institute of Financial analysts
  • 1961: NFAS changed the name back to ‘Financial analysts Federation.’
  • 1962: Charted Financial Analyst designation was officially formed with its first code of conduct.
  • 1963:The first 283 candidates gave the exam, and 268 charters were awarded

It’s also popularly known in India as the U.S- CFA because there used to be a CFA program also offered by ICFAI, which is now closed. Globally there are around 200,000 CFA charterholders, making CFA one of the most prestigious qualifications to pursue. My observation of CFA growth from the year 2012 has been astonishing. India ranks 3rd in the number of new candidates every year.

Top 3 countries for CFA exams

I have never come across a qualification which is researched and so relevant for the industry, even today in 2022. It’s not me being biased about CFA but look at the linear growth of CFA qualification below. While the Americas have been more or less stable, however, the growth is pumped from Asia.

growth of CFA candidates

So, don’t you get surprised by the popularity alone because the CFA program does command recruitment respect in India?

What is CFA for you?

Any person who wishes to make a career in Investment banking, Fund Management and core finance.

  • Who: If you are interested in developing expertise in investment analysis and management.
  • Alternate to MBA: Looking for a cost-effective qualification with the same edge.
  • Competitive Advantage: As a CFA candidate, you stand out based on knowledge
  • Global Recognition: Recognised in more than 200 countries

You need to clearly understand that CFA is an investment management focussed qualification, not a general management qualification.

What is CFA’s Job prospects?

There are tons of opportunities for candidates after CFA overall. I am sharing representative salaries considering that you are a fresher when starting your level 1 preparation.

Salary CFA levelwise

I have compiled a brief video in case you would like to watch it. Having said that, even with Level 1, if you already possess some relevant experience in equity research, then level 2 salaries can also apply. What I want you to understand here is that, although the start is small, eventually, you are at comparable salaries without losing many years.

The CFA Course syllabus

Below is a depiction of the CFA syllabus for all levels and the CFA level I syllabus.

cfa weightage across levels
CFA Weightage

Notice how the CFA syllabus progresses, with the content gradually moving you into portfolio management in level three, unlike programs like CFP. You might ask then why CFA level one itself gets you the job. Because the CFA level one syallbus has all the essential subjects, including financial reporting and analysis, Quants & economics.

Minimum Eligibility for the Exam

The CFA program has no domain-specific eligibility; anyone from any background, whether science, engineering, commerce, or maths, can apply.  

However, the eligibility is based on your stage of education or work experience.

For Under Graduates

  • Bachelor’s Degree or Final year of any graduation.
  • Your final graduation exam dates should be 11 months away.

For Non-Graduates

Even if you don’t have any formal graduation, then you can still apply for the CFA level one exam. The minimum work experience criteria are calculated as follows;

  • 4000 hrs of professional work experience, which needs to be acquired in a minimum of 3 or above years.
  • The experience doesn’t have to be investment-related.
  • Internships or article ships do not qualify as work experience.

CFA Exam Registration & Fees

In this section, I will discuss the various updated changes in fees for attempts, which will happen in 2022.

CFA level One Fee in Indian Currency for the Year 2022

CFA level one registration is available for four exams in a year with the exam fee structure below for the years 2022 and 2023.

Since many students in India want to get a feel of what the fees in Indian rupees look like, we created a converted table of this information.

For the Year 2022
Early RegistrationFees in USDFees in INR
CFA Registration Fee$450 ₹ 33,750     
Exam fee$700 ₹ 52500            
Total$1,150 ₹ 86,250
Late Registration
CFA Registration Fee$450 ₹ 33,750
Exam fee$1,000 ₹  75,000
Total$1,450 ₹ 108750
Jobs After CFA Video
  • USD/INR rate assumed at INR 75

CFA Fees in Indian Currency For the Year 2023

CFA fees as published by the CFA institute, are due to increase from February 2023 exams.

For the Year 2022
Early RegistrationFees in USDFees in INR
Time Enrollment fee$450 ₹ 33,750     
Exam fee$900 ₹ 67500           
Total$1350 ₹ 101250
Late Registration
Time Enrollment fee$450 ₹ 33,750
Exam fee$1200 ₹  90000
Total$1650 ₹ 123750
Jobs After CFA Video

*The new fees will be applicable for the CFA exam from Feb 2023.

*The exam fee increases by $200 irrespective of the time of registration

Registration Process for CFA

If you want to register for the CFA exams, then you need first to visit: https://www.cfainstitute.org/en/programs/cfa/register.

  1. Create an account with the CFA institute
  2. Hold a Valid International passport
  3. Select and add your education details
  4. Toggle your attempt at the CFA exam
  5. Pay the fees using a credit card

There is no alternate document to a passport which is accepted.

Hence if you are planning to register for the exam, it is essential to apply for a passport at least three months in advance.

Also, note that the CFA exam is conducted in English

Exam and Testing Pattern

In this section, I will discuss the exam pattern design of CFA exams in detail. More or less, what you need to understand is the difference between level 2 and level 3.

Source: CFA institute

Level 1

The exam duration is of a total of 4 hrs, with an optional 15-minute break in each session.

The CFA exam is now in CBT Format (Computer Based Exams), which means that the format is entirely Online in an examination centre.

CFA Exam has different exam formats for every level, which we will discuss below

Level 1- MCQ 180 Questions with three options

Example of Format

The MCQ format is categorized into two formats

  • Sentence completion: These are used to test your direct understanding of the curriculum

Sample Question Pattern

An analyst suspects that a company’s US GAAP financial statements may require adjustments because the company uses take-or-pay contracts.

The most likely effect of the appropriate adjustments would be to increase the companies:

  1. Return on assets.
  2. Debt-to-equity ratio.
  3. Interest coverage ratio.
  • Regular Question

An analyst suspects that a company’s US GAAP financial statements may require adjustments because the company uses take-or-pay contracts.

Which of the following is most likely to increase due to the appropriate adjustments to the company’s financial statements?

  1. Return on assets
  2. Debt-to-equity ratio
  3. Interest coverage ratio

CFA L 2

The level 2 exam duration is 4 hrs in total, with an optional 15 minutes break. Also, the level 2 exams are conducted in the computer-based exam format.

  • Level 2 – Item Set -88 Questions
  • Item set means case study, on which questions are asked.
  • There are 88 such vignette-based questions.
  • You must remember that the questions might follow a random structure.

CFA L 3

Level 3- Item set & Essay

The exam has two sessions: 4 Hrs in total

  • First, session-Essay based – constructive response.
  • Second session session-8–11 vignette-based – 44 questions in total

CFA exam schedule 2021 & 2022

This is how the CFA exams are conducted during any given year.

CFA levelsFebMayAugNov
Level 1YesYesYesYes
Level 2YesNoYesYes
Level 3NoYesYesNo
Jobs After CFA Video

Exam Centers in India

CFA Online CBT Exams are now availble in the below-mentioned cities, which is a significant increase compared to the physical paper testing pattern.

  1. Ahmedabad
  2. Bangalore
  3. Bhopal
  4. Kolkata
  5. Chennai
  6. Hyderabad
  7. Indore
  8. Jaipur
  9. Lucknow
  10. Mumbai
  11. New Delhi
  12. Pune

source: CFA institute Exam centres

Pass Rates

Pass rates across levels

  • level 1 pass rate: 36% ( Pre covid)
  • CFA Level 2 pass rate:46%
  • level 3 Pass rate: 54%

The pass rates have drastically gone down during covid. This usually happens when the gross registration goes down too. Hence the current pass rate of 27% at Level 1 is not indicative of the exam becoming difficult.

The minimum passing score at CFA is not decided based on a pre-decided pass % target. The MPS get decides to post the exam after volunteers attempt the exam. Each volunteer attempts the exam and gives a rating (the probable average candidate score) for each question. Once that’s done, numerous such attempts are compiled, and the MPS gets released. This is the same reason why the CFA institute stresses that candidates should spend 300 hours at least for preparation. Check the historical pass rates of CFA

Relevance of CFA in India

CFA is as relevant in India as it is in the global arena because most of the investment management companies in India are based out of the U.S.Moreover, the top fund managers in India and also analysts hold the CFA designation, making the CFA program a popular recruitment anchor.

Market regulators like SEBI have been proactively working to promote the CFA designation. Most of the job descriptions will mention CFA as their preferred education requirement.

The future of CFA Designation

The future of CFA designation will depend on how the investment industry is shaped. Let’s try to answer: “Will Investment Management business requires managers, more so will they still need knowledge?”
The lead for this answer is: TechnologyUse of Technology: Goldman Sachs, JP Morgan, and numerous big business honchos have heavily invested in technology. Platform-Based Research: Research on investment opportunities has rapidly changed from a plain vanilla offering to a research on-demand service. Sophisticated Research Models: Companies like BNY Mellon and MSCI offer risk management services to U.S clients. Job description: Technology-Based Investment Manager at MarcellusThe conclusion here is that CFA gives the candidate the knowledge base, which can’t be done away with even with technology.

Preparation Tips

The process is simple, and I will break this down into some easy-to-follow parts:

  • Start Early: Meaning decide your decision to pursue CFA at least nine months before the exam attempt.
  • Tuition provider: Shortlist several tuition providers and decide which one of them gives you the following
  • Practice: You need to practice a lot, and there has to be a plan for the same.
  • Summary Notes: You don’t need books; CFA institute provides its own curriculum, which is great and reliable for the long term.
  • Trained Trainers: You don’t want to learn CFA from an experienced trainer who hasn’t taught before.
  • Study Plan: Invest your time in planning your preparation; this exam is more on planning.

CFA Material- Free Ebook

Download a free copy of the CFA ebook and check if CFA is for you.

Free CFA Course

We at Mentor Me Careers believe in making education more possible for you. Of course, those who have the means and resources can always spend dollars in preparing for the exam. However, I am talking to those who don’t and still want to pursue it, and then Mentor Me Careers provides free access to our updated learning portal. This access boasts

  • 3000 Questions for practice
  • More than 100 Hrs of videos
  • Mock Papers
  • Updated content.

Visit our main CFA course page using this link: Free CFA level 1 Course by Mentor Me Careers.

Conclusion

Go for it! Hopefully, you now understand why it’s called the Golden Standard. Send me your queries and questions.Always happy to assist, inspire & mentor everyone.
Cheers!
Allen Aravindan, CFA