Is the CFA^®Worth It?

By: Kaplan Schweser

December 16, 2024

You might be asking yourself if the CFA charter is worth it because you heard the CFA Program is expensive and it takes a long time to become a CFA charterholder. Or perhaps you’re considering switching careers and looking for information about what you’d be getting yourself into.

In this article, we provide the necessary context to help you decide if the CFA is right for you. Our goal is to help you set expectations about the outcomes for CFA charterholders and provide you with options in case you decide that the CFA charter is not right for you at this time.

TABLE OF CONTENTS:

Factors to consider if the CFA Is worth it
Is the CFA right for you quiz
What CFA candidates learn
What a CFA does

Using the CFA to switch careers
AI impacts on the CFA Program
CFA alternatives
Advice from CFA charterholders

Factors To Consider If The CFA Is Worth It

Typically, the CFA Program is finished by people with backgrounds in finance, accounting, economics, or business. Having a financial background is not necessary to pursue the CFA charter; however, you will need 4,000 hours of “professional work experience” completed in a minimum of 36 months in areas like trading, corporate finance, and economics to become a CFA Charterholder.

Each person will have their own set of personal factors to consider when deciding if the CFA charter is right for them. Information about those factors usually requires more context than what is provided in CFA FAQs.

Career Goals

Upfront, you should understand that the CFA charter can indeed help you in your career, but it’s not the silver bullet for success. You are the secret to your success, and the CFA charter is just one part of that.

In our research and conversations with CFA charterholders over the years, we’ve learned an important fact: Charterholders who landed new finance jobs or moved up in their organizations applied passion, dedication, determination, and other common CFA traits to their job search or upward career move. In other words, they didn’t stop working hard after they passed the CFA exams. They also did not set the bar too high in their job search or in their desire for a better position. Instead, they did their homework on the types of jobs where a CFA charter is more likely to be respected and designed a long-term plan for working hard and moving into management.

For example, if you are a student you could use your journey through the CFA Program to get an internship or an entry-level position to start gaining the experience needed to officially become a CFA charterholder.

If you’re already working in the financial industry, we’ve seen success come to those who applied for positions or promotions where the charter is seen as advantageous. According to CFA Institute, 22% of CFA charterholders are employed as portfolio managers.

Again, you are the secret to your success. Other things you can do to help your career are:

Leveraging personal contacts
Joining a CFA society
Network on social media
Attend events related to your career aspirations to meet possible employers
Sharpen your presentation skills
Practice interviewing
Try not to get discouraged along the way

Join Kaplan Schweser’s Expert CFA Instructors for a Series of Free Webinars Discussing the Career Benefits of the CFA Program

Finding the Time to Pursue the CFA

Honestly thinking about how much free time you have to dedicate to the CFA Program should be a priority for you. Some important information to consider if you don’t have lots of free time should be:

CFA Level I exams are usually only offered four times per year
You can only take an exam twice per calendar year
You can’t fail the Level I exam and then re-enroll into the next immediate exam window
Average CFA candidates can spend more than 300 hours studying for each CFA exam
You should expect to spend three to four years completing the CFA program.

CFA Salary Expectations

Determining how much money you can expect to earn after passing all three CFA exams is difficult to determine. If you earn the CFA designation as a mid-level analyst, it's fair to expect a 15-20% increase in salary. In reality, the CFA designation seems to provide more experienced analysts and managers with a larger salary increase. Again there are many factors that determine salary increases but one thing for sure is that the CFA designation is seen as valuable, especially for candidates in senior roles like risk, investment, and portfolio managers.

For example, if your end goal is to become a portfolio manager at a top firm, the CFA Institute determined in a 2019 compensation study that US$177,000 was a typical total compensation amount.

According to the U.S Bureau of Labor Statistics, the annual median pay for financial analysts in the U.S is 83,660 USD or ₹570,063 in the Bangalore, India Area according to Glassdoor.

Finance professionals who are active CFA charterholders can be rewarded with significant earning benefits such as:

Performance-based bonuses
Access to high-net-worth clients
Consulting and advisory roles
Opportunities in alternative investments
Entrepreneurial pursuits

Average salary range for common CFA charterholder jobs »

In a recent Kaplan Schweser CFA Survey, one-third of our respondents claimed to have received a salary increase after passing their latest CFA exam or becoming a charterholder.

Recieving a salary increase after passing a recent cfa exam

On average, our respondents who were working in a financial professional role both the year before and year after passing their most recent CFA exam or becoming a charterholder stated they experienced an increase in their earnings of 15%.^# Earnings increase varied somewhat by the most recent exam passed or becoming a charterholder.

Average earning increase after passing a cfa exam

Get More CFA Insights From Charterholders and Candidates

Total Cost to Pursue the CFA

The CFA Program is not free and there are multiple components that determine the total cost to pursue the CFA such as:

Registration costs
Enrollment fees
Prep materials

Depending on when you register for each exam and how much you pay for CFA prep, expect to need 3-6,000 USD to pursue the CFA charter.

Total CFA exam fees »

Is the CFA Right for You?

Try our short quiz to see if the CFA charter is right for you at this time.

What CFA Candidates Learn

The CFA Program is a three-part exam that tests the fundamentals of investment tools, valuing assets, portfolio management, and wealth planning.

CFA candidates learn more than just the CFA Insitute’s Candidate Body of Knowledge (CBOK) which covers topics like the effects of geopolitics on economies and investment markets, or environmental and social risk factors for corporate issuers.

When you study for a CFA exam, you'll gain some significant knowledge benefits such as:

In-depth understanding of investment analysis
Expertise in ethical standards and professional conduct
Risk management and mitigation skills
Global investment perspective
Lifelong learning and continuous professional development

You will also learn about the financial community in your area and the impact your local CFA Society is having on the future of financial professionals like the global CFA Institute Research Challenge.

What a CFA Does

A CFA is a chartered financial analyst who provides investment guidance and portfolio management for individuals, businesses, and other organizations. These professionals can work at institutional investment firms, broker-dealers, insurance companies, pension funds, banks, and universities.

The CFA designation is only given to investment professionals who have completed the requirements set by the CFA Institute. CFA members can be found at some of the world's largest investment institutions, including JPMorgan Chase, Morgan Stanley Wealth Management, Royal Bank of Canada, BofA Securities, UBS Group, HSBC Holdings, Wells Fargo and Company, PricewaterhouseCoopers, BlackRock, and TD Bank Financial Group.

Using the CFA To Switch Careers

It is possible to use your pursuit and ultimate completion of the CFA Program as a way to switch careers. If you set realistic expectations about how long the transition will take and how much effort and dedication it takes to switch careers, the CFA Program is a great way to transition into a finance professional. Especially if your focus is narrow and you are considering positions like:

Reasons People Decide To Become a CFA »

If you don’t have any experience in the finance industry, you could look for an entry-level position after passing the level I exam while gaining experience during the rest of your time in the CFA Program. This will help you meet the 4,000 hours of relevant work experience needed for your CFA membership.

Will AI Language Models Make the CFA Charter Obsolete?

No, ChatGPT and similar language models are nowhere close to be able to perform the tasks that CFA charterholders do on a daily basis. Remember that to become a CFA charterholder you will need on-the-job experience which cannot be replicated by any AI model. They also struggle with the nuanced, experience-based tasks CFA charterholders perform and they lack the critical thinking and real-world experience required for advanced financial analysis.

ChatGPT's Impact and the CFA Program's Resilience >>

CFA Alternatives

Some CFA alternatives we commonly see people consider are:

Best CFA Alternative Courses Guide

Advice From CFA Charterholders

We checked numerous forums and blogs, and those who said the CFA charter was worth it outnumbered the naysayers about 8:1.

One CFA charterholder wrote this in a LinkedIn blog post: “I went from zero to hero in terms of finance knowledge education, moved to Canada, and am now employed as a research analyst in a macro-boutique firm. How much of this is attributed to my status as CFA candidate? A fair portion, I would say. Would I be in the equivalent or better position without doing the CFA Program? In my thinking, it is unlikely to be the case.”

In a Life on the Buy-Side article, Mike Moran, CFA, said, “Successfully completing the program and earning your charter is a worthwhile endeavor. You never know what future the markets might hold for you, so the CFA Program offers a good base of knowledge to get you on your way.”

The general consensus of most CFA charterholders is that it has paid off in terms of career, knowledge, satisfaction, and end results. For example, when we were preparing our eBook, Before You Decide to Sit for the CFA Exam, we interviewed several CFA charterholders, including Jason A. Smith, CFA. He said, “If you are willing to pay the cost, the rewards will wait for you at the end.”

Ready to Tackle the CFA Charter?

If you’re excited about what the future could hold for you as a CFA charterholder, get started today and explore our CFA Level I study materials.

____________________

^#Earnings increases are dependent on numerous factors other than, or in addition to, passing a CFA® exam or becoming a CFA® charterholder, including specific employment conditions and individual experience. Kaplan Schweser does not guarantee any earnings increase resulting directly from such designation. These are the findings of a quantitative survey conducted by Kaplan between May 2 and May 27, 2024. For this survey, a sample of 728 CFA® Level I, II, and IIII candidates and charterholders was interviewed online. The earnings increase was based on 353 CFA Candidates who most recently passed the CFA Level I, II, or III exam and were employed in a financial professional role both the year before and the year after passing the exam.