The primary role of a financial analyst is to analyze data to identify opportunities or assess the outcomes of business and investment decisions. The chartered financial analyst designation is an internationally recognized designation given by the CFA Institute.
What Does a Financial Analyst Do?
Financial analysts research microeconomic and macroeconomic conditions and use that research in concert with an analysis of the internal workings of a business to predict what will happen in various scenarios involving businesses, industries, and sectors. They may also make suggestions to decision-makers regarding investments and business operations.
How Can a Financial Analyst Become a CFA?
Financial analysts must meet at least one of four educational requirements to become eligible to take the CFA exams. They must either have four years of professional work experience, be in the final year of a bachelor’s degree program, have completed a bachelor’s degree program, or have a combination of work experience and education that totals four years. Those qualifying based on a bachelor’s degree must complete their education before they register for the Level II exam.
Candidates must also complete an English assessment, have an international passport, live in a participating country, and meet the professional conduct admission criteria. Candidates who meet the enrollment requirements must receive passing Chartered Financial Analyst Exam Results on all three levels of the CFA program. Additionally, they must become a member of the CFA Institute and pay annual dues. They are also required to sign an annual attestation that they have adhered to the CFA Institute Code of ethics and standards. CFA designation holders who do not adhere to the code may receive a lifetime revocation of their designation.
How Difficult Are the CFA Exams?
Candidates may take the CFA exams as many times as they wish, but only about 43% pass all three and it takes about 300 hours of studying to prepare for each exam. The Level I exam focuses on using analytical tools in the areas of quantitative methods, ethical and professional standards, financial reporting, economics, corporate finance, fixed income, alternative investments, wealth planning, equity investments, derivatives, and portfolio management. The exam consists of 240 multiple choice questions that must be completed in six hours.
The Level II exam can only be taken once Level I has been passed. It covers the valuation of assets and the application of investment concepts and tools in various scenarios. This exam contains 21 item sets with six multiple-choice questions each.
Candidates who have passed both Level I and Level II may take the Level III exam. Level III covers effective wealth planning and portfolio management. It requires candidates to understand and know how to apply all of the material from the curriculum. The test has between eight and 12 multi-part structured essay questions and 10 multiple-choice questions. The time limit is six hours.
Is the CFA Designation Worth Having?
The CFA charter is one of the most widely recognized and respected designations in the financial world. It can be a good way to establish your competency and impress potential employers. However, a CFA destination alone is not enough to guarantee a successful career as a financial analyst. The charter requires a substantial investment of both time and money to obtain. It may be worthwhile to examine other ways to boost your career before committing to pursuing it.
The role of financial analyst is one of the most sought-after careers in the world of finance. Obtaining a CFA charter can be a good way to establish yourself as one of the top financial analysts in the field. However, it is not the only way to boost your career and there is no guarantee that obtaining the designation will be worth the time and effort put into it.