The Chartered Financial Analyst program requires participants to complete a series of three standardized tests, referred to respectively as Level One, Level Two, and Level Three. In order to progress to the next level, one must pass the current level by a percentage that varies each year, and which is determined by the CFA Institute.
The tests are typically administered once per year (twice per year for Level One), and so it often takes three or more years to complete the program depending upon whether a participant must repeat any of the exams.
In addition to passing the three exams, successful participants are required to agree to abide by a strict set of ethics, and also must pay yearly dues for as long as they desire to maintain their CFA status.
In order to be eligible to enter the program, participants must have completed a bachelor's degree, or have at least four years of qualified job experience, or a combination of both that equals four years of experience. Additional requirements must be met before candidates receive their Charters after passing all three exams.
The Chartered Financial Analyst designation is widely recognized and highly respected throughout the financial community. While the program was created in, and is administered from within the United States, the program has also gained wide recognition abroad. Participants normally prepare for each exam over the course of several months, and the exams are notoriously difficult. In fact, the knowledge base that they cover is often compared with postgraduate level material. Thus, successful completion of the program is seen as an accomplishment, as well as an indication of the participant's persistence and endurance over time.
CFA Charter Holders receive a number of benefits in addition to having the right to note the accomplishment on their resumes and business cards. Charter Holders become members of a global network of more than 80,000 finance professionals. They have access to exclusive information such as job listings not posted elsewhere.
Charter Holders may join a local CFA chapter in their area where they live and work, allowing them to attend regularly held meetings and make contacts with other Chrter Holders in the area.
Professional and governmental institutions in many countries offer certain requirement exemptions for Charter Holders, and, in some cases, even for those who have passed certain levels of the the CFA exam. For example Certified Public Accountants who are CFA Charter Holders can meet the Accredited in Business Valuation examination requirements by taking only the half-day ABV I examination.
The CFA curriculum specifics change slightly every year in order to keep up with trends. However, the core subjects remain the same. These include Ethics, Quantitative Methods, Economics, Financial Statement Analysis, Accounting, Security Analysis, and Portfolio Management.
Most of these subjects are covered on each of the three exams, at progressively higher levels of difficulty. Each exam level is administered in a single day and is broken up into two three-hour sessions. Strict rules are enforced to prevent cheating. Candidates usually receive their results 2-3 months after the exams are administered. Instead of receiving a numerical grade, they are given a pass/fail result, along with percentage results for each general subject area. If a candidate fails an exam at any level he or she has the option to take the exam again the next time it is offered.
The first CFA examination was administered in 1963 by an organization known as Institute of Chartered Financial Analysts (ICFA). Only 283 candidates took that first exam. Since then, the exam has become substantially more sophisticated, and while still concentrating on the fundamentals of equity security analysis, it has grown to encompass many other important aspects of the profession as well. In time, the ICFA merged with other professional organizations to form the CFA Institute. Today, thousands of people take the CFA exams every year in hundreds of locations around the world.