Chartered Financial Analyst (CFA) Charter Program: Definition and Advantages

Its pretty easy to bump into someone in the financial profession who is really excited about entering the chartered financial analyst (CFA) program. Sometimes they know what they are getting into, sometimes they dont. They may have no idea how much time it takes or exactly how having the charter may help or hurt them.

These benefits are listed to serve as a motivation to work towards attaining a CFA qualification.
  • Your CV will stand out: …
  • More time and cost-effective than an MBA program: …
  • Instant Credibility and Industry Respect: …
  • Networking opportunities for a faster career growth: …
  • Better job prospects at the top investment firms:

5 Benefits of Becoming a CFA Charterholder

Who does a CFA help?

There are a wide variety of positions in finance that are benefited by earning your CFA charter. There are also some careers outside of finance that may find a CFA helpful, if you interact with financial professionals a lot. Here are some roles that may benefit from a CFA certification:

What is the CFA charter?

The CFA charter is given to someone who becomes a chartered financial analyst, which is a certification given by the CFA Institute to financial professionals who enroll in their program and pass a series of exams. The CFA Institute is a globally recognized professional organization with a wide network of finance professionals. To become a CFA, complete the requirements set by the CFA Institute, which include enrollment, three tests that you need to pass in order, qualified work experience and letters of reference. Once you have completed the requirements, you are considered a CFA charter holder.

The exams cover important financial topics that are involved in a financial analysts work, such as wealth management, derivatives, economics, portfolio planning, finance in corporate offices and professional and ethical standards. A CFA provides investment advice and portfolio management and works at a variety of businesses including universities, banks, investment firms and insurance companies. You might guide individual clients or large businesses, and everything in between.

What are CFA benefits?

There are many benefits to becoming a CFA, including:

Affordability

While an MBA may have a wider range of applications, if you are working as a financial analyst you may find that becoming a CFA is more cost-effective in terms of both money and time. Additionally, since the CFA is more self-guided, you can often study and pass the exams while working full time and earning money.

Career advancement

The CFA is so globally recognized and well-respected that earning your CFA charter can improve your chances at promotion in a financial field. There are also a variety of different roles you can work in with a CFA designation if you wanted to try a new path, including corporate financial analyst, chief financial officer, risk manager, asset manager, financial consultant and stockbroker.

Global recognition

The CFA Institute is a global organization with members in over 150 countries, who you can network with through your charter membership. The global recognition that comes with having a CFA charter can also help you work at international companies and find work outside the United States.

Transfers throughout the world

Unlike some other more localized certifications, because the CFA Institute is globally recognized, you can use your CFA charter to work in many countries, including with organizations that require a certification such as the CFA. Your career could take you from the United States to England to Australia to Singapore, and your CFA charter would be recognized as a benefit.

Better job opportunities

Besides improving your chances for promotion and being hired at an international company, having a CFA can improve your chances for getting a new job. Showing that you are a CFA on your resume shows potential employers that you have advanced financial knowledge and can help you get an interview.

Prestige

The CFA Institute is a prestigious organization, and not everyone who takes the first exam passes all the others and becomes a CFA. By obtaining a CFA charter, you are showing to potential and current employers that you are an elite financial professional with a globally recognized certification.

Waived requirements

In some countries, having a CFA can waive certain licensing requirements. A CFA can also potentially allow you to bypass the GMAT entrance exam for graduate school, if you intend to further your education. You may also be able to use your CFA to waive requirements for some other certifications, including continuing education and work experience requirements.

Advanced knowledge

Ultimately, getting a CFA is a way of proving you have advanced knowledge of financial concepts, so one of the benefits is that you earn that knowledge. The CFA exams include topics like quantitative methods, ethics and professional standards, portfolio management, economics and financial reporting and analysis. In order to pass, you generally need to study the required subjects, which can add to your knowledge about finance.

Ability to combine with an MBA

Although a CFA charter is less costly than an MBA and may be what you need for the career path you are on, you may also decide that you want to get an MBA as well, which is entirely possible. The benefits of a CFA are not the same as the benefits of an MBA, so you may find value in both.

Increased earning potential

Earning a CFA charter can increase your earning potential, either with your current employer or with future employers. You may find that you earn more in the same role or that your employer offers you a larger raise than coworkers who dont have a CFA. Its not a guarantee of more money, but it can help improve your chances of earning more.

Networking opportunities

The CFA Institute has over 100,000 members across over 150 countries. If you earn your CFA charter, you become a member who has access to this large global network. This can help you find new career opportunities, like-minded financial peers and resources for increasing your financial knowledge and skills.

FAQ

What is the advantage of CFA?

Getting your CFA charter allows you to gain analytical skills and expertise in quantitative methods, economics, financial reporting, investments analysis, and portfolio management. This set of skills and knowledge you will develop as you become a CFA charterholder will serve you well throughout your career.

Is getting a CFA worth it?

The Bottom Line

In the end, both the MBA and the CFA are valuable. Not only does an MBA enhance job prospects and earning potential and help build a broader network, but in some cases, firms will require an MBA for certain leadership or management roles.

Does CFA Help salary?

1) Having a CFA Charter increases average salary by 53%

​Even after removing the work experience factor, there is a very clear increase in average pay as candidates progress through the CFA Program.

Can CFA make you rich?

For portfolio managers with the CFA professional credential, the typical salary reported in 2019 was $126,000, with bonuses raising the total earning potential to $177,000, according to the CFA Institute.

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