What Is the CFA® Charter?

By: Kaplan Schweser
October 13, 2021
Woman sitting at desk studying for the CFA Exam

The CFA® (Chartered Financial Analyst®) charter is primarily a postgraduate professional designation that certifies the competence and ethics of financial analysts. According to CFA Institute, which offers the charter, it is the most respected and recognized investment management designation in the world. The process of earning the CFA charter will give you deep knowledge in the areas of investment analysis, asset management, and ethics.


  1. What Is A CFA Chartholder
  2. What Is The CFA Exam
  3. Common Roles and Industries For CFA Charterholders
  4. Format, Questions, Topic Weights For Each CFA Exam Level
  5. How Hard is the CFA Exam
  6. CFA Exam Pass Rates and Results
  7. Preparing For The CFA Exam

What is a CFA Charterholder?

CFA Institute has a global network of over 167,000 investment professionals and numerous societies around the world. The CFA charter is recognized by regulators, universities, and certification programs in at least 30 countries and territories. You’ll gain unmatched career resources and relationships by holding the charter and joining a CFA Society, as well as access to jobs around the world that require a CFA charter or candidacy. 

The requirements for becoming a CFA charterholder are as follows: 

  • Achieve the required work and/or educational experience. Before registering for the CFA level I exam, you need to have completed a bachelor’s degree, be in your final year of a bachelor’s degree, or have 4,000 hours years of combined work experience and/or undergraduate education.

  • Take the exams. Although passing even just Level I of the CFA exam is an impressive addition to your resume, you need to pass all three to become a CFA charterholder.

  • Submit reference letters. Submit two to three professional reference letters (two if one is an active member of the local CFA society to which you’re applying, three if not).

  • Have a valid international passport and live in a participating country.

  • Complete your application to become a CFA charterholder. The CFA charterholder application requires that you have qualifying work experience in addition to your professional references.

What is the CFA Exam?

The CFA exam is made up of three levels, each designed to test your knowledge of different investment tools and skills. You should expect to spend approximately 300 hours studying for each level. Candidates typically take between 4 and 5 years to pass all three levels of the CFA exam.

Considering the CFA charter? Download this free Before You Decide to Sit for the CFA Exam eBook.

CFA Exam Topics

The Learning Outcome Statements (LOS) and core concepts on the CFA exams are built from the Candidate Body of Knowledge™, which is developed by the CFA Institute. While the curriculum is updated every exam cycle, all three levels of the CFA exam focus on the same 10 topic areas. Exam weights vary by level and can change slightly from year-to-year. The following topic areas are covered:

  • Ethical and Professional Standards

  • Quantitative Methods

  • Economics

  • Financial Statement Analysis

  • Corporate Issuers

  • Equity Investments

  • Fixed Income

  • Derivatives

  • Alternative Investments

  • Portfolio Management and Wealth Planning

Common Roles and Industries For CFA Charterholders

Many of the top financial firms employ CFA charterholders because they are seen as having attained the “gold standard” of the industry. Holding the CFA charter demonstrates mastery of a broad range of practical portfolio management and advanced investment analysis skills.

CFA charterholders guide businesses and individuals who are making investment decisions. Assessing the performance of stocks, bonds, and other types of investments, they work in banks, pension funds, insurance companies, and other businesses. Some of the most common roles for CFA charterholders include:

  • Portfolio managers are in charge of a fund or group of funds, working with analysts, researchers, and clients to stay current on the markets.

  • Research analysts review data and market movements to make future predictions.

  • Risk managers help their company anticipate changes and avoid potential financial pitfalls.

  • Financial advisors typically help clients with investments, tax laws, and insurance product selection decisions.


The CFA Levels Explained

What is the CFA Level I Exam?

The CFA Level I exam is a computer-based, multiple-choice test that will take you approximately 4.5 hours to complete (broken into two 2.25-hour sections with an optional break in between). The CFA Level I exam is offered four times a year so find a CFA exam date that works for you. 

CFA Level I Exam Format

Level I of the CFA exam tests knowledge and comprehension. The focus is on investment tools and ethical and professional standards. The Level I curriculum mainly focuses on recalling formulas and definitions from memory, and most of the material is a straightforward introduction to the concepts covered.

The Level I CFA exam covers 19 study sessions, 57 readings, and 10 topics. 

CFA Level I Exam Questions

There are 180 total questions in the CFA Level I exam, all of which are free-standing. There is no penalty for incorrect answers, so try to answer as many questions as you can. Each of the Level I exam questions is unrelated to the others and is usually a prompt, such as, “The period of time within which a hedge fund must fulfill a redemption request is called…” This is not the case for Level II and Level III.

Sign up for our question of the day and get a CFA question sent directly to your inbox every day to help you prepare.

CFA Level I Exam Topic Weights

CFA Exam Level I TopicsCFA Exam Level I Topic Weights
Quantitative Methods8-12%
Financial Reporting & Analysis13-17%
Corporate Issuers8-12%
Portfolio Management5-8%
Equity Investments10-12%
Fixed Income10-12%
Derivative Investments5-8%
Alternative Investments5-8%


Keep in mind that you must meet certain qualifications in order to take the CFA Level I exam. 

The pass rates for the Level I exam are the lowest of the three levels.

Free CFA Level I Study Resources »

What is the CFA Level II Exam?

The CFA Level II exam is a computer-based, 4.5-hour exam similar to Level I in administration method and timing, but the questions on the CFA Level II exam are vignette-based, not free-standing. In 2022, the CFA Level II exam will be offered three times. The pass rate for the Level II exam historically hovers between 45% and 46% depending on the timeframe. That means that even though fewer candidates sat for the Level II exam than Level I and less than half of them passed.

CFA Level II Exam Format

Level II of the CFA exam tests application and analysis with a focus on asset valuation. Unlike Level I, Level II focuses on how you apply standards to situations that analysts face. 

CFA Level II Exam Questions

The CFA Level II exam has 88 multiple-choice questions that cover 48 readings and has 14 study sessions. The Level II exam has questions organized as “item sets,” each based on a shared situation, called a vignette, with four to six multiple-choice questions that go deep into a single topic. 

Be prepared to demonstrate that you can apply tools and relationships to the analysis of financial data and the valuation of assets. Memorizing concepts should not be your focus; instead, you need to show you understand how to use them. 

Each vignette uses a combination of text, tables, financial statements, and more to describe a business scenario. Learn how to scan through a vignette quickly and pick out the pieces of data needed to answer a particular question.

CFA Level II Exam Topic Weights

The 10 topics for the CFA Level II exam are the same as Level I, but at Level II, CFA Institute provides a different range of topic weights. For example, Portfolio Management in Level II can have a weight anywhere from 10–15% (each 5% weighting represents one item set on the exam). Ethical and Professional Standards, Financial Statement Analysis, Equity Investments, Fixed Income, and Portfolio Management and Wealth Planning are the key topics for passing the 2022 Level II with topic weights of 10–15%.

You can register for Level II of the CFA exam once you pass Level I. 

It is generally believed by CFA charterholders that Level II is the hardest level. The exams’ pass rates support this theory.

Learn more about the differences between Levels I and II of the CFA exam.

Free CFA Level II Study Resources »

What is the CFA Level III Exam?

The CFA Level III exam is a computer-based, 4.5-hour exam, but the format is significantly different from Levels I and II. The CFA Level III exam requires you to demonstrate the same skills as Level II, but you also have to show that you can make judgment calls and that you can write about them. The exam is also more subjective than Level II.

CFA Level III Exam Format

The constructed-response section of the Level III CFA exam is Level III’s biggest difference from Level II and Level I. You must answer open-ended questions on a blank piece of paper without any answers to choose from.

The CFA Level III exam has 16 study sessions and 38 readings, and the exam only covers seven topics. It excludes Financial Statement Analysis, Quantitative Methods, and Corporate Issuers.

CFA Level III Exam Questions

The first session of the CFA Level III exam is comprised of 8 to 11 vignettes followed by several questions that require a written response." ... "The second session of the CFA Level III exam is comprised of 44 multiple-choice items, each worth 3 points. Each item set on the CFA exam consists of a vignette followed by either 4 or 6 multiple-choice questions. In total there are 52 - 55 questions on the CFA III exam.

The Level lll CFA exam integrates more topics in a question than Level II. For example, a question may combine the concepts from Study Session 3, Behavioral Finance, and Study Sessions 12 and 13, both on Private Wealth Management.

CFA Level III Exam Topic Weights

The weightings of the topics are also in ranges, with Portfolio Management and Wealth Planning weighted the heaviest at 35–40%, followed by Fixed Income at 15–20%, and Ethical and Professional Standards, both at 10–15%.

The pass rate for Level III is the highest of the three levels. It is usually over 50%.

Learn more about the differences between Levels II and III of the CFA exam.


Free CFA Level III Study Resources »

CFA Difficulty: How hard is the CFA Exam?

The CFA exams are notorious for their difficulty. Rather than just answering how difficult is the CFA? We’ve asked some of our former students, who are now CFA charterholders, to provide their opinions on the question.

“It is one of the most difficult exams in the world.” – Hu Jia, CFA

“Having already passed the CMA, CFM, and CPA programs, I was overwhelmed with the amount of study and preparation that was required for the CFA Program.” – John Mario Furtado

It’s definitely tough. Our students have said it’s harder than any other designation program they’ve ever done. But, that makes getting through the program even more rewarding.

“Finishing the charter was one of the best feelings of accomplishment I’ve ever had in my career.” – Tim Davis, CFA

Achieving the CFA charter is no small feat, but all of the former students we talked to said it’s worth the hours of commitment. It is a true test of perseverance and discipline. The sky’s the limit if you can commit to preparing for it!

CFA Exam Pass Rates & Exam Results

Everyone who takes a CFA exam is provided with a “pass” or “did not pass” exam result and a summary of performance in each topic area. Level I and II results are released within 8-10 weeks of the exam date and Level III within 10 weeks.

View Latest CFA Exam Pass Rates » 

To pass, a candidate needs to meet the minimum passing score (MPS), which is never given and varies year to year, which can make it difficult to interpret the results of your CFA exam. Candidates will receive an indicator of the score range for each topic area instead (<50%, 51–70%, >70%), along with their final result. Level III candidates are provided with only two topic area summaries: one reflecting the essay portion and one reflecting the item set portion.

Individuals who do not pass the exam are also given more information about their performance relative to all other candidates who did not pass. All candidates who did not pass are divided into 10 equal score bands, which shows how well an individual score compares with the overall scores of others who did not pass.

Leverage a CFA Exam Study Plan

Preparing a thorough CFA study plan is the best way to ensure effective CFA Exam preparation that will help you pass the exam.


Ready to start preparing for the CFA Exam?

As you get ready for your next CFA exam, consider making a Kaplan Schweser CFA exam prep package—complete with classes, practice exams, and mock exams—the centerpiece of your mission to earn a passing grade.

Free eBook: Before You Decide to Sit for the CFA® Program Exam

Free eBook: CFA® Program Fundamentals, 2nd Edition

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