Simply having a love of finance isn’t enough to earn the coveted CFA certification. Earning the right to be called Chartered Financial Analyst means having previously completed a bachelor’s degree from a recognized post secondary school and having gained four years of professional on-the-job experience in an environment that involved having made responsible decisions about financial investments and having passed all CFA level exams.
These exams, colloquially referred to as CFA Levels I, II and III are administered in sequentially ordered. Hopefully chartered financial analysts must successfully pass each exam prior to attempting the proceeding one. The tests are offered by the CFA institute every June, with Level 1 also being offered in December.
All of the tests are six hours from start to finish and are written in a manner that tests a student’s understanding of ethics and professional standards, investment tools, asset classes, portfolio management and wealth planning.
How to Get CFA Designation – First Steps
Both CFA Prep Levels I and II are comprised of multiple choice questions and Level III is a combination of essay format and multiple choice questions. It shouldn’t need to be said that Level II is more complex than Level I and Level III is more complex than Level II.
In order to be able to use the CFA designation you will need to first enroll in the CFA program, and pay the $450 enrollment fee. There is no requirement stating the applicants must be American citizens, however, the exams are only available in English and test takers must have an international passport. The CFA exams are available to be written everywhere in the world except Cuba, North Korea and Ukraine.
Prior to being permitted to write any of the three exams, students must agree to a Professional Conduct Statement and affirm that they will follow the CFA’s code of ethics and professional standards. Part of this means being transparent about any past or current investigations, complaints of professional misconduct reviews.
Once you are enrolled, you are given a maximum of four years for CFA preparation to take all three exams. After you’ve successfully passed Levels I, II and III and gained four years of professional experience you will be granted designation as a Chartered Financial Analyst and will be allowed to begin using the CFA designation.
Basic Essential Information About CFA Exam
The CFA Levels I, II and III exams are based on specific curriculum designed by the CFA institute and takes the average student 300 hours to prepare for.
In order to register to complete the exams, you must have completed a bachelor’s degree or be in your last year of college or university or have gained four years of professional experience working in a capacity that would require you to make investment or financial advice. The CFA institute will also accept a combination of education and professional experience so long as the two total four years or more.
Level I is comprised of 240 multiple choice questions and delivered over two equal sessions, with each session being completed in three hours. In order to move on to the next level, you must have obtained a passing score in the first level.
Again, Level 2 is multiple choice, but varies slightly in the delivery of each question. Like Level I, there will be two 3-hour sessions. Level III is a series of essay questions.
Tips How to Pass the CFA Exam
The best way to pass the CFA exam is to be prepared for it. CFA prep can be done by taking practice tests, writing mock exams, working with a 3rd party testing service or hiring an online CFA prep course.