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How to Become a Chartered Financial Analyst: A Complete Guide to the CFA®

If you’re thinking of pursuing the Chartered Financial Analyst (CFA®) designation, then you need to know everything that completing this process will involve. Thankfully, you’ll find all of the details about how to become a Chartered Financial Analyst in this guide. From understanding the benefits of the designation to creating an effective study plan, this page is your ultimate resource for becoming a CFA.

Table of Contents

How to Become a Chartered Financial Analyst in 10 Steps

The simpler the process of earning the CFA, the faster you can complete it. So, to help you earn the charter as easily as possible, I’ve outlined the 10 most important steps to earning the designation.

To complete steps 1-5, you must think about why you want to earn the CFA and how you’ll go about meeting the requirements. Then, in steps 1-6, you’ll focus on the concrete actions you must take to pass the CFA exam and become a charterholder.

1. Learn About the Benefits of the CFA Designation

Before you dive into the process of becoming a CFA, you need to clearly understand the CFA designation and what it offers you. In other words, think about why you want to become a CFA charterholder. Ultimately, will the process be worth it?

The CFA designation is the gold standard for the investment industry. According to the CFA Institute (the granting entity), the CFA is a graduate-level credential held by more than 150,000 professionals in hundreds of countries. CFA charterholders work in a variety of fields. Commonly, these fields include equities, fixed income, private equity, derivatives, and real estate.

CFA Salary

The CFA designation is highly regarded by employers around the world. As such, charterholders enjoy numerous career-boosting benefits. For example, PayScale reports that CFAs earn an average yearly salary of $90,000. Comparatively, financial analysts without the designation earn $64,000 a year.

Of course, career satisfaction comes down to more than a paycheck. Fortunately, as a CFA, you can also expect to receive more job opportunities, including opportunities with the world’s most popular investment firms.

2. Compare the CFA Designation to Other Professional Certifications

Clearly, this guide advocates for the CFA program. But realistically, the designation isn’t for everyone.

For example, if you’re a finance professional with plenty of experience in accounting (or vice versa), the Certified Public Accountant (CPA) license might be a better path for you. Or, if your career interests fall more in line with risk management, the Financial Risk Manager (FRM) certification could be the right choice for you.

CFA Comparison

So, as the next step, I recommend you take an honest assessment of the pros and cons of the CFA program and compare the designation to other professional certifications.

However, before you get too far in your research, you should know that no other certification will exactly match the CFA. You’ll find designations that cover similar industries, but you won’t find a 1-1 match.

You can use the following comparisons to accurately assess your certification options:

3. Assess the CFA Program Difficulty

To be fully transparent, the CFA exam is difficult. The exam consists of 3 parts or levels. Level I and Level II have wide coverage. However, Level III is a beast.

And, compared to most U.S.-based professional certifications, the CFA designation is a marathon. Meaning, candidates spend several years working to complete the program. Typically, they spend 300 hours studying for each level of the exam. So, when you add it all up, you can see that’s 900 total study hours.

CFA Pass Rates

Also, the time estimate is based on passing each level the first time. Yet, less than half of CFA test takers pass the Level I and Level II exams. According to the CFA Institute, the June 2019 exam pass rates were 41% for Level I, 44% for Level II, and 56% for Level III.

So, at this point, the CFA designation might seem too demanding. But you must not forget about the benefits of the charter, because they truly outweigh the costs. Yes, the exam is challenging, but it’s not impossible to pass, and the CFA designation is worth the effort.

4. Weigh the Benefits and Costs

Ultimately, most of us seek professional licenses and certifications to create a better future for ourselves and our families. We’re drawn to the hopeful promise of improved career prospects and bigger salaries.

That being said, the CFA program carries a hefty price tag. All candidates pay a program enrollment fee of $450. Then, you must contend with the CFA exam fees.

However, you can save significantly on exam fees if you’re able to meet the early bird registration deadline or at least the standard registration deadline. For example, the early bird registration fee for Level I is $650, the standard registration fee is $950, and the late registration fee is $1,380.

CFA Exam Costs

At a minimum, you’ll spend $2,400 over the duration of the CFA program. But, that amount doesn’t include intangible costs such as time, sweat, and tears.

Again, you need to do an assessment of what’s realistic and worthwhile for you. Specifically, I’d consider performing a SWOT analysis. It can help you determine if an investment in the CFA makes good financial and emotional sense.

And remember, CFA charterholders earn impressive salaries. So, you’ll be able to recoup your investment once you earn the designation.

5. Determine Your Eligibility for the CFA Program

Surprisingly, the entry barrier for the CFA exam is low. The CFA Institute only requires candidates to have a bachelor’s degree or equivalent degree in any discipline.

Additionally, if you’re a student in the final year of your degree or equivalent program, you can also register for the Level I exam. However, you must earn your degree before you can register for Level II.

But you can still take the exam, even if you don’t meet the education requirement. As an alternative, the CFA Institute will allow 4 years of full-time work experience in any field. So, practically anyone who has studied or worked for 4 years post-high school is eligible to sit for the CFA exam.

One more caveat: you can also qualify for the exam with some combination of full-time work experience and post-high school education.

Additional CFA Requirements

The CFA Institute does have a few other requirements for taking the exam. You need to sign the Professional Conduct Statement and Candidate Responsibility Statement and have a valid passport.

Additionally, to take the CFA exam, you should have a good command of the English language. The CFA Institute only administers the exam in English. Without an understanding of the language, candidates can struggle.

6. Sign Up for the CFA Program

At this point, you’ve hopefully spent time thinking through steps 1-5 and decided the CFA is right for you. However, even if you’re still weighing your options, you should still know what steps 6-10 involve.

These remaining steps outline the CFA exam process by touching on registration, planning, studying for, and of course, passing.

How to Register for the CFA Exam

You’ll register for the Level I exam at the same time you submit your CFA Program application.

The CFA exam registration process involves a few steps. Here’s how to get started:

  1. Go to https://www.cfainstitute.org/programs/cfa/register
  2. Click “Register”
  3. Log into your CFA Institute account or click “Create an Account”
  4. Submit the CFA program requirements
  5. Register for the Level I exam

During the application process, you’ll be asked to provide proof of your education and/or experience. Moreover, you’ll need to provide your passport information and sign the conduct and responsibility statements.

Finally, when you register for the Level I exam, you’ll be asked to pay the one-time program enrollment fee ($450) and the exam fee, the price of which depends on when you register.

CFA Program Acceptance

Upon approval, the CFA Institute will send you an official acceptance via email with your exam admission ticket in electronic format.

Normally, the CFA Institute sends an acceptance email within 2-3 days of receiving your application. Therefore, if you don’t hear from them after 3 days, you should contact them directly to determine your application status.

The registration process is the same for the Level II and Level III exams. But the exams are sequential, and you must take and pass Level I first.

Know Your Deadlines

The timing of the CFA exam dates is a huge factor in your CFA success. To clarify, the CFA Institute has set limited time frames for taking each exam part. They offer the Level I exam twice a year (June and December) and the Level II and III exams once a year (December).

Again, you must give yourself plenty of study time. You don’t want to be cramming right up until the deadlines. Early-bird registration starts as early as 9 months before the exam date and saves you lots of money on exam fees, so shoot for that.

7. Familiarize Yourself With the CFA Exam

Clearly, you should understand the CFA exam format and syllabus before you start studying.

Level I Format

The Level I exam consists solely of multiple-choice questions (MCQs). In total, the exam includes 240 questions. You’ll have 3 hours in the morning to answer half of those questions and 3 hours in the afternoon to answer the other half.

The MCQs in the Level I exam are not adaptive. So, each question is independent of the next. Also, all MCQs are equally weighted, and you’re not penalized for guessing. Therefore, answering a question is better than leaving it blank.

Level II Format

The Level II exam includes 21 item set questions. For the CFA exam, “item set” means mini-cases. Each item set on the Level II exam includes a case with 4 or 6 MCQs. You’ll have 3 hours in the morning session to address the first 10 item sets and 3 hours in the afternoon session to handle the rest.

Level III Format

The Level III exam consists of 11 item set questions and 8-12 essay questions. During the morning session, you’ll have 3 hours to complete the essay questions. And during the afternoon session, you’ll have 3 hours to complete the item set questions.

CFA Exam Syllabus

The CFA exam focuses on 10 topics relevant to the investment field:

  1. Ethical and Professional Standards
  2. Quantitative Methods
  3. Economics
  4. Financial Reporting and Analysis
  5. Corporate Finance
  6. Equity Investments
  7. Fixed Income
  8. Derivatives
  9. Alternative Investments
  10. Portfolio Management

To get a better understanding of the exam content, check out the Level I syllabus.

8. Invest in a Review Course and Prepare for the Exam

As part of the CFA package, the CFA Institute provides comprehensive reading materials known as the CFAI textbook. In theory, you don’t need third-party guides to take the exam. But in practice, 70-80% of all candidates get supplements to speed up their studying or work on their weaker areas.

I always recommend a review prep course for the CFA exam. This type of review course can be instrumental in helping you advance through the exam material more quickly, identify and overcome your weak areas, and pass the exam on your first try.

Many CFA courses include practice tests, video lectures, and access until you pass guarantees.

Best CFA Review Courses

However, you must take the time to find the best course for you. AnalystPrep and Wiley (formerly known as Elan Guides) are the 2 most popular CFA review courses. But you can learn all about the most popular CFA study materials in my analysis. You can also save big on your course with my CFA course discounts.

9. Fulfill the Experience Requirements

Before you can receive the CFA designation, you need to accumulate 4 years of relevant experience. You can earn this experience before, during, or after taking the CFA exams.

Interestingly, the CFA Institute provides a broad definition of “relevant experience.” For example, this experience can include:

  • Evaluating or applying financial, economic, and/or statistical data as part of the investment decision-making process involving securities or similar investments
  • Supervising, directly or indirectly, persons who practice such activities
  • Teaching such activities

You can learn more about the CFA work experience requirements to see if you already have experience that counts.

10. Join the CFA Institute as a Charter Member

The CFA Institute will invite you to become a CFA charterholder once you complete the Level III exam, obtain 4 years of relevant experience, and sign up for a CFA Institute membership.

The Fastest Way to Become a CFA

Candidates who successfully pass the CFA program are awarded the CFA designation. Typically, it takes aspiring CFAs 4 years to become a charterholder.

In theory, you can complete the program within 18 months. However, your ability to complete the program in that time period will highly depend on your level of commitment. Essentially, you must dedicate yourself to your studies so you can pass the 3 exams on your first try.

To finish the CFA program in 18 months, you’ll need to take Level I in December, Level II in June, and Level III the following June.

Help for Your CFA Journey

I know the CFA process may sound complicated. But know that once you take the first step, the path becomes quite clear. And, I’m more than happy to help along the way. I’ve got answers to all of your CFA FAQs on my CFA site.

CFA® and Chartered Financial Analyst are trademarks owned by CFA Institute.

About the Author Stephanie Ng

I am the author of How to Pass The CPA Exam (published by Wiley), and I also passed all 4 sections of the CPA Exam on my first try. Additionally, I have led webinars, such as for the Institute of Management Accountants, authored featured articles on websites like Going Concern and AccountingWeb, and I'm also the CFO for the charity New Sight. Finally, I have created other accounting certification websites to help mentor non-CPA candidates. I have already mentored thousands of CPA, CMA, CIA, EA, and CFA candidates, and I can help you too!

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