What Does CFA Stand For? Chartered Financial Analyst

CFA stands for chartered financial analyst. A CFA is a finance professional that specializes in advanced investment and financial strategies and has an in depth understanding of financial markets. These professionals typically work in hedge funds, brokerage houses, or investment banks analyzing market trends and managing portfolios for investors.

This certification, called a charter, is issued by the CFA Institute, private organization dedicated to acknowledging excellence in education and experience. Someone with this designation is called a charter holder or chartered financial analyst.


Requirements

Before someone becomes a charterholder, they must pass all three CFA exam levels of the CFA exam along with fulfilling all of the education, experience, and ethical requirements.


Education

Candidates must obtain a bachelor’s degree or the equivalent with the appropriate number of business, finance, accounting, and management credit hours of coursework.


Exam

This exam revivals the CPA exam as one of the most difficult professional exams with a recommended study time of 300 hours per section. Most candidates take at least two years to pass all three sections. Many require a few more years after that depending on how many times they fail. The standard pass rate for each level varies slightly but is between 40%-60%.

It goes without saying, but Level 1 is the least complicated. Level 2 builds on the concepts and fundamentals of Level1. Level 3 is extremely advanced is by far the most difficult. Candidates have the most difficult time passing Level 3 and it often requires several attempts before they successfully pass it.


Work Experience

Charter holders must also complete 2-4 years of experience in the financial management and investment field before they can earn their charter. This number has changed throughout the years. That’s why I give a range.


Ethics

Charter members must also adhere to strict ethical guidelines of business. This ethical code is far beyond the legal requirements put in place by the government. The aim is to create respect and integrity in the field. Thus, when a financial professional hears that you are a CFA, they automatically know you are trustworthy, knowledgeable, and experienced.


A lot of people confuse CFA with certified financial analyst because they are so used to other professional designations like CPA or certified public accountant. However, these two credentials are very different.

The CPA credential involves very little financial training and experience in the financial markets. An accountant typically works in public accounting conducting audit procedures, preparing tax returns, and performing business consultations. They are not really focused on financial management at all.

A CFA, on the other hand, is solely focused on investments and finance. They don’t typically run companies and get involved in operations management. It is, however, common for charter holders to be promoted to executive positions that manage large segments of a business.

If you are thinking about taking the CFA exam and becoming a chartered financial analyst, now is a good time. The demand for charter holders is at an all time high and firms value the skills and experience that they possess. If you became a card holder, you wouldn’t have a problem finding plenty of opportunities.

Look into it. It’s a great career path that is well worth the investment.

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