The Chartered Financial Analyst (CFA) designation is largely prevalent in the finance field and is considered one of the most prestigious professions.
Individuals with a keen inclination in Investment Management can effectively carry out the responsibilities of a CFA and excel greatly in their roles.
Therefore, anyone aspiring to level up in the field of finance should consider pursuing the CFA course. The CFA designation is recognized by the CFA Institute, and numerous companies hire CFAs in significant numbers for various positions, benefiting from their transformative knowledge in different areas of Finance.
The CFA course provides comprehensive training and equips students with the required knowledge to become competent CFAs. It is imperative to understand various aspects of the CFA course to pursue a career as a CFA successfully. So let us shed some light on the aspects of CFA and its eligibility, salary obtained, and more.
Eligibility criteria for CFA Exams
To be eligible for the CFA examinations, there are specific criteria that must be met. The following list outlines the necessary eligibility criteria:
1. Completion of a bachelor's degree from a recognized and accredited university.
2. The undergraduate degree must be obtained before applying for the CFA Level II exam.
3. Professional work experiences, such as paid articles, internships, or any investment-related positions, totalling a minimum of 4,000 hours.
4. Completion and submission of a Professional Conduct Statement form.
5. Residency in a participating country and possession of an international passport.
Please Note: CFA Institute may require proof of education and/or work experience. In such cases, aspirants must provide the necessary documentation to be eligible for the CFA examinations.
Also Read: ACCA Articleship Duration, Salary and Jobs in IndiaKey Factors to consider when opting for a CFA course
There are several important aspects to be aware of if you have chosen or are considering the CFA course and examination. These aspects are as follows:
1. The CFA program consists of three levels of examination: Level 1, Level 2, and Level 3
2. The syllabus for the CFA course covers comprehensive subjects about the world of Investment management. It includes topics ranging from Equity to Derivatives and concludes with Portfolio Management.
3. The Level 1 examination for the CFA program is typically conducted in June and December. The examinations for Levels 2 and 3 generally take place in June.
4. Since 2021, the CFA examinations have been held four times a year for Level 1, while the examinations for Levels 2 and 3 are scheduled on a quarterly basis.
It is important to keep these details handy while pursuing the CFA course and preparing for the respective examinations.
Syllabus for CFA course
As we discussed in the beginning of this , the CFA examination includes three levels. Every level has a different and specific syllabus.
Level 1 Syllabus TopicsEthical and Professional Standards
Quantitative Methods
Economics
Financial Statement Analysis
Corporate Finance
Equity Investments
Fixed Income
Derivatives
Alternative Investments
Portfolio Management and Wealth Planning
Source: Investopedia
Level 2 Syllabus Topics
Fixed Income
Derivatives
Alternative Investments
Portfolio Management and Wealth Planning
Ethical and Professional Standards
Quantitative Methods
Economics
Financial Statement Analysis
Corporate Finance
Equity Investments
Source: Investopedia
Level 3 Syllabus Topics
Ethical and Professional Standards
Quantitative Methods
Economics
Financial Statement Analysis
Corporate Finance
Equity Investments
Derivatives
Alternative Investments
Fixed Income
Portfolio Management and Wealth Planning
Source: Investopedia
Here is the syllabus for the CFA course presented in table form, organized by each level:
| Level 1 Syllabus Topics | Level 2 Syllabus Topics | Level 3 Syllabus Topics |
|---|---|---|
| Ethical and Professional Standards | Fixed Income | Ethical and Professional Standards |
| Quantitative Methods | Derivatives | Quantitative Methods |
| Economics | Alternative Investments | Economics |
| Financial Statement Analysis | Portfolio Management and Wealth Planning | Financial Statement Analysis |
| Corporate Finance | Ethical and Professional Standards | Corporate Finance |
| Equity Investments | Quantitative Methods | Equity Investments |
| Fixed Income | Economics | Derivatives |
| Derivatives | Financial Statement Analysis | Alternative Investments |
| Alternative Investments | Corporate Finance | Fixed Income |
| Alternative Investments | Corporate Finance | Fixed Income |
| Portfolio Management and Wealth Planning | Equity Investments | Portfolio Management and Wealth Planning |
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Examination pattern for CFA
To ensure success in the CFA examination, it is important for students to have a profound understanding of the exam pattern for each level.
Let us take a look at examination patterns for each level:
Level 1- The level 1 exam has two sessions, each lasting three hours, both conducted on the same day with a two-hour break in between.
- The exam covers all ten topics from the syllabus, with each topic having equal representation.
- The question paper comprises 240 multiple-choice questions (MCQs), with 120 MCQs in each session. The questions are further divided based on subjects.
- There is no presence of any negative marking scheme.
Level 2- The level 2 exam is divided into two three-hour sessions.
- It includes 21 case studies, with ten and eleven item-set questions in each case study, distributed across the respective sections.
- Out of the 120 questions, 18 are case studies that appear six times, and three case studies appear four times.
- The case studies can span one to two pages and may include diagrams and tables.
Level 3- The level 3 exam also consists of two three-hour sessions.
- The first session may have 8-12 essay questions, some of which may have sub-parts.
- The second session includes 11 case studies, with eight case studies appearing six times and three case studies appearing four times.
- The essay questions typically have multiple parts.
- Case studies can range from one to two and a half pages and may include diagrams and tables.
Here is the Examination pattern for CFA presented in table form:| Examination Pattern for CFA |
|---|
| Level 1 |
| - Two sessions, each lasting three hours, conducted on the same day with a two-hour break in between |
| - Covers all ten topics from the syllabus with equal representation |
| - 240 multiple-choice questions (MCQs) |
| - No negative marking scheme |
| Level 2 |
| - Two three-hour sessions |
| - 21 case studies with item-set questions distributed across sections |
| - 120 questions, including case studies that appear multiple times |
| - Case studies may include diagrams and tables |
| Level 3 |
| - Two three-hour sessions |
| - First session: 8-12 essay questions with sub-parts |
| - Second session: 11 case studies with varying repetition |
| - Essay questions may have multiple parts |
| - Case studies may include diagrams and tables |
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CFA Chartholders in India
The Asia-Pacific (APAC) region is experiencing unparalleled growth in the number of candidates pursuing the Chartered Financial Analyst (CFA) designation. With a significant share of 55% of global candidates, APAC is at the forefront, primarily driven by the substantial contributions from India and China. During a recent trip to India, Nick Pollard, the Managing Director for Asia Pacific at CFA Institute, engaged in an extensive conversation with Business Today. The discussion revolved around the CFA course and the implementation of innovative educational initiatives designed to adapt to evolving industry demands.
Scope for CFA in India
CFA is a highly esteemed course and profession in the finance field in India. There are several prestigious job roles available for CFAs, including Corporate, Research Analyst, Financial Analyst, Portfolio Manager, Risk Manager, and Investment Banking Analyst.
The demand for skilled and experienced CFAs has been continuously increasing. Consequently, many globally recognized companies are actively hiring talented and accomplished CFAs, even at the Level 1 stage, without waiting for them to complete Levels 2 and 3. The salary for CFAs in India is substantial and satisfactory due to the high demand and the valuable skills possessed by experienced and trained CFAs.
CFA course Scholarships
There are various scholarships available to support individuals in their studies and preparation for the CFA program. These scholarships include:
1. Women's Scholarship: This scholarship is specifically designed for women who aspire to become CFAs and recognizes their dedication and elegance.
2. Professor Scholarship: Professors teaching subjects related to business, finance, economics, or any other topic covered in the CFA Program Candidate Body of Knowledge (CBOK) can benefit from this scholarship, which provides financial assistance.
3. Access Scholarship: This scholarship aims to support students who cannot afford paying the fees for the CFA program. It helps alleviate a significant portion of their educational expenses, enabling them to continue their studies and become competent CFAs in the future.
4. Student Scholarship: This scholarship is available to students enrolled at universities affiliated with the CFA Institute. It provides financial aid to students pursuing the CFA program through the Student Scholarship Program.
5. Regulator Scholarship: The Regulator Scholarship is intended for individuals working in companies responsible for ensuring compliance with business conduct and standards of practice in the investment management industry.
These scholarships offer valuable opportunities for individuals to pursue their CFA aspirations and enhance their professional development.
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The range for CFA salary in India varies significantly, starting from ₹0.7 lakhs and going up to ₹15.3 lakhs. However, on average, a CFA in India can expect an annual salary of approximately ₹4 lakhs. Several factors contribute to the wide salary range observed in the CFA profession in India.
How can a CFA stand out amongst the Large Number of other CFAs One major factor is the CFA's experience level. Companies tend to prefer CFAs with extensive experience in their respective fields, as it brings added value to their operations. Consequently, CFAs with significant work experience command higher salaries due to the increased demand and value associated with their expertise. On the other hand, CFAs who are freshers or lack substantial work experience may not receive higher salaries.
Another crucial factor influencing salary is the skill set of the CFA. Enhanced and in-demand skills which are often acquired through experience and hands-on learning contributes to the CFA's value.
CFAs with advanced skill sets are likely to receive higher salaries compared to those with less-developed or outdated skills.
Overall, experience and skill set play vital roles in determining the salary range for CFAs in India.
Also Read: Best Books for Preparing ACCASkills necessary for a potent CFA
When aspiring to become a CFA, it is crucial for individuals to possess and cultivate certain skills that are necessary and beneficial for the profession. These skills include:
Please note: Eligibility also varies from college to college.
1. Profound and comprehensive knowledge of the field: Having in-depth and holistic information about the domain of finance and investment management is essential for a CFA.
2. Problem-solving skills: The ability to solve problems efficiently and effectively is a valuable skill for a CFA. Being able to analyze complex financial scenarios and provide solutions is vital in this profession.
3. Interpersonal communication: Developing strong interpersonal communication skills is important for establishing and maintaining effective relationships with clients, colleagues, and stakeholders. Clear and concise communication is necessary to convey complex financial concepts and strategies.
4. Relationship building: Building and nurturing relationships with clients, colleagues, and industry professionals is crucial for success as a CFA. The ability to network and establish trust is essential for attracting and retaining clients and accessing valuable resources.
5. Strategic thinking: Optimal strategic thinking is required to analyze financial data, identify trends, and develop investment strategies. Being able to think critically and make informed decisions based on thorough analysis is a key skill for a CFA.
6. Quick decision-making: The ability to make timely and practical decisions is highly valued in the fast-paced world of finance. CFAs should be able to assess risks, evaluate options, and make sound decisions under pressure.
These skills serve as the foundation for Professionals aspiring to become proficient CFAs. Cultivating these soft skills is imperative for anyone aiming to make a successful career in this designation.
In Conclusion:
The designation of CFA is highly prestigious and offers significant benefits. However, the journey to attain this designation can be challenging and one has to constantly learn and upgrade their skills to be valued by employers across the globe. Therefore, individuals can opt to get qualified through CFA course, which can assist them in becoming potential and most sought-after CFAs.