Mendoza School of Business

CFA qualification a hot ticket

Published: June 4, 2007 / Author: Sriwipa Siripunyawit

The number of Chartered Financial Analyst (CFA) candidates has been rising due to the increasingly widespread acknowledgement of the profession throughout the world.

The CFA Institute reports steady growth in the total number of worldwide candidates, up 36% last year to 140,000.

The top 10 countries for new CFA candidates were: India (143% growth from 2006), France (71%), Korea (60%), China (57%), Singapore (48%), Australia (47%), Hong Kong (39%), Canada (33%), the United Kingdom (32%), and the United States (20%).

Growth was also robust in developing markets including Vietnam (143%), Egypt (60%), Russia (59%), Brazil (29%) and South Africa (18%).

Currently, there are 90,900 charter holders in 134 countries.

In the past, the term CFA was recognized only by a very limited group of people already deeply involved in financial markets. However, these days, the charter is widely accepted in various industries as a ticket to fast-track career advancement and handsome financial rewards.

According to Frank Reilly, a professor of finance at the University of Notre Dame and an author of CFA textbooks, the CFA designation has become the global investment credential, recognised as a passport to work anywhere.

“On average, the number of candidates taking the CFA examinations has continued to grow by 15% to 20% annually,” he says.

Dr. Reilly said the CFA designation is not a hard and fast requirement. However, it’s more like a personal badge of honour to employers that a candidate has passed a globally standardized and internationally recognized examination.

As a result, the number of employers considering the charter as an important qualification in job
applications and career advancement has increased steadily.

In Thailand, the Securities and Exchange Commission requires stock analysts to pass at least level one of the CFA exam, and futures analysts to pass at least level two. In addition, it also may require all fund managers to pass all three levels of the CFA exams.

According to a 2005 study in the United States, employers were willing to pay a premium for investment professionals with CFA qualifications.

For employees with 10 years’ experience or more, those with the CFA designation out-earned their peers by 24%, or a median of US$248,000 compared to $200,000. The gap is even wider among all respondents, regardless of experience level. Those with the CFA designation command compensation levels 54% higher than those without it.

Additionally, a 10-year professional with a CFA out-earns one with only an MBA by 18%, or a median of $236,510 versus $200,000. Nevertheless, the combination of the charter and the MBA ultimately is the most lucrative mix with a median of $255,000.

The CFA is globally recognized as a measure of the competence and integrity of financial industry professionals, including financial analysts, portfolio managers, investment bankers, accountants, investment advisers and others.

To attain the designation, candidates must pass three levels of examinations held in 180 countries.

Usually, it takes at least 250 hours to prepare for the exams. The global pass rate for level one is 40%, level two 40% to 50% and level three 60%.

Registration fees for all three levels are $1,500, while textbooks cost around $1,200. Currently, Thailand has about 300 CFA charter holders.



Topics: Mendoza