What is a CFA? – Chartered Financial Analyst Definition | Meaning
A CFA, or chartered financial analyst, is a professional credential granted by the CFA Institute to designate that an individual has achieved the certification’s required knowledge and experience and has upheld its ethical standards.
This is a common certification for professionals on Wall Street and in the financial services industry who want to be distinguished as the most capable and elite in their field. Although a cardholder is not necessarily any more intelligent or capable than another professional, this certification does show a number of different things about the person.
It shows that they are hard working and dedicated. It’s difficult to become a CFA. Beyond the standard college education requirements, candidates must pass a series of three exams that revival the CPA exam for length and difficultly. These exams cover topics like economics, ethics, fixed income, equities, options, and accounting. Candidates must also complete at least four years of hands on experience in the financial services industry. They must also adhere to strict ethical standards.
It also shows that the person is serious about his or her career in finance and is extremely knowledge about all aspects of the industry.
That’s why the CFA is the standard of excellence in the finance industry. It’s even more respected than an MBA. People know what it takes become come one and respect charter holders for doing what it takes to earn that designation.
What Does a CFA Do?
A CFA typically works with investments or does market research, but their titles and job descriptions can vary greatly because of their diverse qualifications. The most common jobs include:
- Portfolio Manager
- Research Analyst
- Chief Executive
- Corporate Financial Analyst
- Financial Advisor
- Relationship Managers
- Risk Manager
- Investment Banking Analyst
- Manager of Managers
- Accountant or Auditor
- Strategist, Trader, or Broker
- Performance Measurement Specialist
- Private Banker
Of this list of careers, about 22 percent of all chartered analysts work as portfolio managers while 16 percent work as research analysts and 7 percent are chief executives. Thus, 55 percent of charter holders titles are classified as “other.” This just shows how useful and diverse the skill set of this designation is.
Where Does a CFA Work?
There are over 120,000 chartered financial analysts operating out of 35 countries around the world. They tend to work for banking institutions, brokerage houses, hedge funds, and other companies operating in the financial sector.
Some of the biggest CFA employers include Morgan Stanley, Citigroup, and JP Morgan.
The CFA credential is on the rise and employers are increasingly demanding people with this designation. There’s no wonder why. With their diverse set of skills, knowledge, experience, and strong ethical standards, cardholders are ideal employees in the financial services industry.
Since earning this charter is so difficult, the supply of these individuals in the work force is limited. Thus, employers value them even more and are willing to compensate them well for their unique knowledge and skills.
Is the CFA Right for You?
If you are contemplating getting your CFA charter, just know that it’s difficult but completely worth it. CFAs earn substantially more than their non-chartered counter parts. Having your charter will afford you much better opportunities for starting jobs and the possibility of getting promoted to executive positions. It’s well worth it.
Before you can take your exam, you’ll need to get the right study materials to help you pass. The exam is difficult enough without having a guide that works. Here’s our review of the top CFA review courses. Check them out and get started on your career today!