Reasons to Become a Chartered Financial Analyst (CFA)

By Stella Goh – Market Data Analyst | 15 May 2019

There are more than 100,000 CFA charter holders in over 135 countries and increase of demand worldwide for the CFA Program, the charter has become global professional investment credential which allows the student to practice across the international boundaries. The recognition for this charter is base on the candidate’s knowledge and professional standard embodies in the program makes the CFA designation as a mark of global distinction of investment professionals worldwide. CFA Charter is recognised and rewarded by employers, respected by regulators and investment institutions.

The Breadth of Knowledge and Real-World Expertise

By studying the CFA Program, you can explore more knowledge on investment combined with comprehensive global views, and up-to-date practical skills allow the investment professionals expertise in quantitative methods, economics, financial reporting, investment analysis, portfolio management, etc. The analytical skills and the knowledge learnt from the CFA Program assist them in analysing the risks and rewards of a variety of investment types to address client-specific investment needs throughout their career which they can manage the investment anywhere due to CFA has mastered the Global Body of Investment Knowledge (GBIK). Since the practising of CFA charter holders around the world also practising on the evolution of Global Body of Investment Knowledge, it is standardised, consistent and based on knowledge relevant.

According to the CFA Institute, the top 10 employers for Chartered Financial Analyst are JP Morgan Chase, PricewaterhouseCoopers, HSBC, Bank of America, Merrill Lynch, UBS, Ernst & Young. RBC, Citigroup, Morgan Stanley and Wells Fargo.

Career Advancement Opportunities

The Chartered Financial Analyst (CFA) certification is almost a guarantee of advancement in an investment career path and to boost financial credentials. Besides, CFA Charter is also known as the toughest exam with an average passing rate of 42% over the ten years. Most of the people in the industry know that to become a CFA charter holder, one requires a lot of time for studying and one must have discipline enough to manage their time for their studies. There is also a global network of over 135,000 investment professionals in the world implies that there is an impressive club to join after becoming a CFA Institute member for the networking opportunities. After acquiring the CFA Charter, you can find a variety of investment-related jobs such as investment analyst, portfolio manager, risk analyst and so on.  Let us look at some of the few examples of employment job that charter can apply.

a) Research Analyst

Research analyst is a professional who serves as investigators to analyse the data such as financial information, performance trends, economic trends and news, political climate, and specific development of the companies for future performance. Sometimes, the research analyst also referred to as an equity research analyst, investment analyst or security analyst. They synthesise their analysis of the data into the research report on their methodology for investors client conclude with recommendations to advise them on whether to buy, sell or hold on specific stocks.

b) Financial Analyst

Financial Analyst is a professional who examines more on economic data and use their findings to help companies make a business decision. They use spreadsheet and statistical software package to analyse financial data, spot trends to develop a forecast. Some of the financial analysts will collect the industry data such as balance sheet, income statement, merger acquisition history and economic news for their clients. The financial ratios will be calculated from the data that they have gathered to help the client to read the bottom line of the company. However, not all of the financial analyst work in the stock or bond market. Some companies might hire a financial analyst to help them determine the strength and weakness lie in their business and make profit or losses forecast.

c) Portfolio Manager

Portfolio manager also can be referred to as an investment manager, wealth manager, asset manager and financial manager. The primary responsibility of a portfolio manager is to create and manage asset allocations for some clients. They spend a lot of their days working together with analysts, researchers, and clients based on the current market events, business news, and financial market. A portfolio manager with expert insight and experience can make an informed decision for their clients. They are also responsible for meeting with investors to have an explanation on their research, strategy and rationale for the arrangements.

In most of the cases, they follow a predetermined strategy of investment, dictated by investment policy statements (IPS), to achieve a client investment objective. Some of the portfolio managers may craft the investment packages supplied to the clients, while some of them manage the client expectation and transaction. They should buy and sell securities in an investor’s account to maintain a specific investment strategy or objective over time.

Based on the June 2018 CFA Program Candidate Survey from CFA Institute official website, the majority of jobs of employed candidates work as a research analyst, investment analyst and quantitative analyst which consist of 12%. 9% of candidates work as an accountant or auditor, 8% of candidate work as a corporate financial analyst and 7% of candidates work as a consultant, and 5% of candidates work as risk analyst or manager, relationship manager, account manager, credit analyst, and portfolio manager each.

Conclusion

By acquiring the CFA designation can help to distinguish the charter holders from other counterparts in the eyes of professionals and investors. As a result, you can expect your career to benefit more flexibility and higher compensation compared to if you do not have the CFA Charter.