What is the CFA - woman explains

Posted by: Kaplan Schweser
Published August 25, 2020

What is the CFA® charter? If you’re considering a career in finance and want to demonstrate your knowledge and expertise, the CFA charter is one of the best ways to do it. In this article, you’ll learn what the CFA charter is, what a CFA charterholder does, and why you should consider earning the designation.

What the CFA® Charter Is

The CFA charter is 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. 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.

Are you thinking about taking the CFA exam? Download this free Before You Decide to Sit for the CFA® Exam eBook.

What a CFA Charterholder Does

Generally speaking, CFA charterholders provide guidance to 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 manager: 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 analyst: Research analysts review data and market movements to make future predictions.
  • Risk manager: Risk managers help their company anticipate changes and avoid potential financial pitfalls.
  • Financial advisor: Financial advisors typically help clients with investments, tax laws, and insurance product selection decisions.

Why Earn the CFA Charter

The CFA charter is a cost-effective credential with global recognition that offers a thorough understanding of finance. The process of earning the charter will give you deep knowledge in the areas of investment analysis, asset management, and ethics. Stacy-Ann Tait, CFA, says, “Pursue the program because you have a passion for the investment profession. That deep drive will serve as a strong motivator to successfully complete it.”

Getting your CFA charter allows you to gain analytical skills and expertise in quantitative methods, economics, financial reporting, investment analysis, and portfolio management. This set of skills and knowledge you will develop as you become a CFA charterholder will serve you well throughout your career. “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,” says Mike Moran, CFA.

The CFA charter is also a relatively low-cost investment. Compared to earning an MBA, which can cost as much as $100,000, the CFA charter only costs between $2,400 and $12,000. Unlike some full-time MBA programs, you don’t have to quit your job. You can study for the CFA exam while you work. Lou Haverty, CFA, who passed the CFA exam while working full-time as a credit analyst, says, “Have a clear goal that earning the CFA charter can help you meet. The process of working toward that goal will help you find extra stamina when you’re struggling.”

And finally, CFA Institute has a global network of over 135,000 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.

Ready to Learn More about Earning the CFA Designation?

Now that you know what the CFA charter is, you can learn how to earn it here. When you’re ready to get started, Kaplan Schweser has exam prep packages to increase your odds of success.

Before You Decide to Sit for the CFA Exam

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

CFA Fundamentals eBook

Free eBook: CFA® Program Fundamentals, 2nd Edition