What is a CFA?

There are a lot of C-plus-somethings out there – CPA, CPT, CFP, the list goes on. There’s even another CFA out there, but it’s got a lot more to do with felines than financials.

CFA stands for Chartered Financial Analyst®. CFAs are investment professionals and work in high level finance as it relates to investment strategy and analysis. There are over 170,000 CFAs globally.

The CFA charter is gained by completing the three CFA levels – Level 1,2, and 3. Each level builds upon the prior so they must be completed in order. Charterholder candidates must also have relevant work experience. It typically takes four years to complete all three CFA levels.

Who gets this certification?

Smart people who love finance. In all seriousness, the CFA process is long and requires a tremendous amount of investment knowledge and dedication. The CFA is not limited to the United States – this is a global designation with charterholders around the world.

Most people who attempt CFA programs are currently employed. The CFA survey from candidates in 2019 reported that 70% were employed and 23% were students while becoming CFA candidates.

The typical jobs of those who were employed while they went through the program were:

  1. Research/investment/quantitative analyst
  2. Corporate financial analyst
  3. Accountant or auditor
  4. Consultant

If your goal is to be an investment guru, CFA is likely in your future. According to Payscale, the average base salary for CFA holders is $98,000 per year.


MBA programs are typically two to four years depending on your program and time constraints. Getting your CFA is likely going to be four. The major difference between the two is the level of specialization that the CFA offers. While MBAs used to be the go-to designation for investment careers, that’s no longer the case.

MBA programs are often more general and focus on core business management concepts rather than investments only. They also typically will cost upwards of $80,000 depending on the program.

A financial analyst reviewing investment graphs on an iPad. Close up.
Is an MBA better than CFA? It depends on how hardcore you want to go into a career in investments.

The CFA program is much more specialized on investment analysis, management, and ethics. The timeframe of the program will vary, but CFA recommends 300+ hours per level, and requires 4,000 hours of work experience. The cost of a CFA program is $3,000-$4,000 depending on exam fees.

Successful candidates study for an average of 300 hours for this exam.
CFA Institute

Bottom line: Unless you know deep down in your soul that investment is your future, tread lightly when considering the CFA.

How to become a CFA Charterholder

Becoming a charterholder takes a lot of time and effort. This is not a quickie certification – as mentioned above it’s going to take four years or more. You must enroll in the CFA program, gain work experience, pass all three levels, and submit reference letters.

To enroll in CFA program, you must meet one of the following requirements:

  • Bachelor’s degree
  • Final-year student
  • 4,000 hours of professional experience

You must also hold an international travel passport.

What are the career options? 

While money management has evolved over the years, it’s not (and probably never will) go away. CFAs often work in portfolio management, research, consulting, and risk analysis and management.

The most common industries where you see CFAs are:

What’s on the exam?

There are two testing sessions for the Level 1 exam and candidates must complete both to get their level 1 certification. Each session lasts 90 minutes and consists of multiple choice questions.

Session 1 topics include:

  • Ethical and Professional Standards
  • Quantitative Methods
  • Economics
  • Financial Statement Analysis

Session 2 topics include: 

  • Corporate Issuers
  • Portfolio Management
  • Equity Investments
  • Fixed Income
  • Derivatives
  • Alternate Investments

The CFA Institute provides 20 exam question examples. Based on member surveys, the top three hardest areas of the exam for Level 1 were:

  1. Ethical and Professional Standards
  2. Financial Statement Analysis
  3. Fixed Income

Fun Fact: The CFA reports that successful candidates study for an average of 300 hours for this exam. Studying and proper preparation for the CFA exam is crucial if you want to pass and move on to level two and three.

Bottom line

Getting your CFA is going to be hard. The CFA institute reports a high attrition rate so it’s not to be taken lightly. That said, it’s a globally recognized designation that labels you as an investment wizard with some serious skills.