This is one of the most important questions asked when appearing for this exam. Prestigious in every sense, CFA, which stands for Chartered Financial Analyst, is one of the most sought-after certifications in the field of finance. A CFA designation will open doors for you that other degrees or courses may not. Let’s dive deep to find out why.

First, a little about CFA:

CFA, which stands for Chartered Financial Analyst, is a professional certification program. It has 3 levels of examinations that need to be cleared, along with other requirements before you can earn the CFA charter. The subjects and concepts covered across the 3 levels provide you with knowledge in specialized skills such as portfolio management, financial analysis, fixed income, and equity analysis. If you want to know more about CFA, click here to read more the programme in detail

Now the question is, why should you do CFA?

Completing the CFA program has its own set of advantages such as;

• Better opportunities in finance

It is a well-known fact that CFA charter holders are preferred more in core finance jobs than any other degree holder. Even people who have cleared at least 2 levels of the CFA program are more likely to find a good job and improve their career in finance.

• Higher Earnings

The potential for earning more than your colleagues is greater if you have a CFA credential, as completing the CFA program prepares you comprehensively for the financial world. According to 300Hours.com, even after removing the work experience factor, there is an apparent increase in average pay as candidates progress through the CFA Program. ​On an average, subjects who have passed CFA Level 3 or are CFA charter holders earned 57% more than regular employees.

• Deeper financial knowledge

The CFA curriculum is much more comprehensive, detailed, and deeper than any other course, such as an MBA. According to Schweser.com, “A CFA charter is considered niche in the larger business world compared to an MBA, which addresses a broad array of topics with less depth.” Getting your CFA charter allows you to gain skills in analysis and expertise in quantitative methods, economics, financial reporting, investment analysis, and portfolio management. This set of skills and knowledge will undoubtedly stand you in good stead throughout your career.

• Cost-effective than an MBA

The CFA program is designed in such a way that it can be completed flexibly and gradually. The entire cost of appearing for all 3 levels would be around 3-4 lakhs[ This range assumes that you clear each level in the 1st attempt without taking any tuitions, and is inclusive of the cost of books and materials]. A traditional MBA specializing in finance on the other hand is much more expensive in India. The average fee structure for a top MBA college can range from around Rs 20 lakh to Rs 25 lakh for a two-year course. So there is a cost factor to consider when it comes to choosing either a CFA or an MBA.

Disadvantages of CFA

• Lack of time and commitment

The CFA curriculum is long and demanding, and you need to commit time and energy to pass all 3 levels. According to the CFA Institute, it takes a typical candidate

• an average of 4 plus years to complete the CFA program;
• 300+ hours of studying for each level,
• and 6 months of prep for each exam.


This means you need to study for at least an average of 1.6 hours per day, assuming you prepare for 300 hours, and that's the bare minimum.If you are someone who is working and has a lot of things on their schedule already, you may need to prioritize before signing up for the program.

• Expense

CFA is an expensive program, there is no doubt about it. The minimum cost for the CFA Program is USD 3,170 [ close to Rs.2,66,000 assuming an exchange rate of Rs.84] which includes a one-time enrollment fee and discounted early registration, but excludes GST for Indian students. You also will have to pay an additional 18% GST on whatever your examination fee comes out to be. This is assuming that you clear all the levels in the 1st attempt, which is quite a difficult thing to do considering the exceptionally low pass rates, especially for level 1.

• Not interested in core finance

Let's face it, CFA is extremely useful for those who have a core finance job or are looking to break into such jobs which require you to have an extremely deep knowledge of finance. This is especially true for roles such as equity valuation, research analysis, fixed income, portfolio management, etc. If you are more into sales, accounting, or in technical position, you should probably look into doing an MBA, which will improve your knowledge and managerial skills in a wide variety of ways through a wide range of subjects.

• The crowd/herd effect

Lastly, don’t do the CFA program just because everyone else in your batch or your friend circle is doing it. Herd mentality will push you to do things that may not be beneficial for you in the long run. You shouldn’t be influenced to do the program for the wrong reasons, only to realize later that it might have been a mistake and you were much better off doing something else.

Conclusion

These are some of the reasons you should consider before enrolling in the CFA program. Everything has its own advantages and disadvantages, and it's up to you to make a decision that will only help you in the long run.

And we at CharterBuddyy are here to assist you in making that decision. Please check out our other blogs that might be helpful in your CFA journey.