Investment Money

Many financial professionals have considered obtaining the Chartered Financial Analyst (CFA) designation.  But is it worth it? As someone who completed the CFA Program and earned the charter several years ago, I thought I could provided an honest assessment of the benefits and difficulties that should go into such a decision.

 What is the CFA?

The CFA is the premier designation in the investment management industry and is issued by the CFA Institute.  It is generally pursued by those interested in a career in investment research and portfolio management.  The curriculum deeply covers a wide array of investment topics and develops rigorous financial analytical skills.  There is also a heavy emphasis on the global and ethical aspects of investment management.  To become a charterholder, applicants must pass three six-hour exams, have a bachelors degree and four years of relevant industry experience.


The CFA designation is widely considered the most respected and prestigious in the investment industry.  The education received is a huge asset in itself, but the boost it gives to one’s resume is the main motivation for applicants.

Employers see it as a sign of strong worth ethic, dedication to the industry, and deep financial knowledge and analytical skills.  A firm that lists their portfolio managers and analysts in marketing materials could benefit by showing that their investment decisions are made by CFA charterholders.  For employees looking for advancement in the industry, it can be a way to differentiate themselves from their peers and obtain more analytical or prestigious positions.  For those who are looking for a way into the industry without relevant job experience, it can be the best way to keep your resume out of the scrap pile.  

Although not cheap, pursuing a CFA is a considerably more affordable way to enhance one's resume when compared to the alternative of obtaining an advanced degree such as an MBA.  It can also be done while working full-time, another advantage over some degree programs.  Also, employers at hedge funds and other investment firms typically value a CFA higher when evaluating candidates.

In addition to the charter itself, members will also gain access to a variety of networking and professional development events as well as job boards specifically for CFA members.


There is one main negative about pursuing a CFA, and it is a very significant one.  Completing the entire program to earn the charter is an extremely difficult, time-intensive pursuit that takes a minimum of two and a half years to complete and longer than that for most.  The vast majority of Level 1 applicants never complete the program.  

The curriculum is both wide and deep and pass rates are extremely low.  Over the past ten years the pass rates have been 39% for Level 1, 44% for Level 2, and 53% for Level 3).  Level 1 can only be taken in June or December, and Levels 2 and 3 can only be taken in June.  So if you don’t pass an exam on the first try, you may have to wait another entire year just for another chance.  The typical applicant will start studying several months in advance of their exam and spend a cumulative 300 hours preparing for each level.  Personally, for three straight years May became an entire month where my friends and family didn’t see me as I was locked in the library doing practice exams.  Additionally, much of my free time from February through April was spent in reading and review.

There are some monetary costs associated as well. You can expect to spend a couple thousand dollars in exam enrollment fees and materials over the course of the program.  If you sign up for additional classes or materials those costs can be much higher.  However, if you currently work for an investment firm, your employer may subsidize some or all of the costs or offer reimbursement for each exam you pass.  Once you earn the CFA, you will have to pay annual membership fees to maintain an active membership, which can run up near $500.  Again, if you are employed in the industry, your company will probably cover part or all of the cost.

 So Should You Enroll?

The answer to this question really comes down to being honest with yourself about your motivations and how much you want it.  Because of the extensive amount of time required - both in hours studying and in years before you can first receive the designation - it is essential to think realistically about your career goals before you start.  Also think about how much time you can spend to properly prepare for each exam over the next few years.  The pass rates are too low and exam offered too infrequently to go at it with anything less than full effort.  However, for those that are absolutely dedicated to a long-term career in equity research and portfolio management and can afford the time to properly study, the CFA Program can be extremely rewarding with great benefits in financial education and career opportunities.