Last week, the CFA Institute—the global association of investment professionals—released a compensation study which noted that the average salary of a new CFA charterholder in India is Rs 28.6 lakh per annum. CFA charterholder is a qualification gained after passing three levels of the chartered financial analyst (CFA) exam, and 4,000 hours of work experience over a minimum of 36 months. “The average annual income of a CFA level 1 candidate to recently awarded CFA charterholder has increased by 192%,” said Nick Pollard, MD, Asia Pacific, CFA Institute. In an interview with FE’s Vikram Chaudhary, he added that in addition to metro cities, candidates can now take CFA exams also in Kochi, Chandigarh, Bhubaneswar and Guwahati. Excerpts:
During Covid-19, the CFA exam was shifted to computer-based testing. Is this change permanent?
Yes, the computer-based model shall remain indefinitely.
Who is the right candidate for CFA certification?
One must possess a bachelor’s degree (or equivalent) or the exam window must be 23 months or less after the month of your graduation in order to meet the CFA Program admission criteria. Candidates enrolled in college can take the Level 1 exam, but can’t take Level 2 until they’ve graduated (although they can register for Level 2 prior to graduation).A candidate can satisfy the entrance requirements without having a degree if she has 4,000 hours of competent, professional job experience, or a degree-plus-work experience of 36 months. It is not necessary to have experience in the investing industry to be considered for admission to the programme without a degree.
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What is the Return on Investment and Return on Time for CFA certification?
The investment can go up to $4,500 on standard registration, but if you do early registration the entire process costs about $3,500. Candidates may also spend on tuition. All this is substantial. That’s why we have partnered with Eduvanz Finance so that candidates can pay CFA exam fees in low-interest monthly instalments.
As far as investing time is concerned, CFA provides candidates with one of the highest distinctions in the investment profession. The credential was benchmarked by Ecctis as equivalent to a master’s degree in finance in many markets (comparable to NSQF Level 9 in India).
There is no other credential as recognised globally across the investment profession. Earning the CFA distinction is not only about getting a foot in the door. It’s also about moving roles: such as those investment professionals who are interested in going to buy-side. It’s for practising professionals who want to signal their talent and professional mobility. The charter continues to be highly valued by employers, many of whom pay for their employees to enrol. Many job listings cite the charter. Our own surveys have shown the charter leads to increases in compensation over time.
What have been the pass rates of CFA certification?
The 10-year average pass rate from 2013 to 2022 is 44%.
Is it preferable to take coaching before taking a CFA exam?
While there is no prerequisite for availing a coaching class, it is recommended that a candidate appearing for Level 1 must spend at least 300 hours in the form of self-study or via a coaching institution.
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Who runs your test centres?
We have selected Prometric for it.
What are other major changes to CFA rules?
We recently announced that the CFA Program candidate eligibility is being extended by one year to include students with two years remaining in their undergraduate studies. This change was effective from November 1, 2022. The expansion of the eligibility policy will provide students with the opportunity to use Level I of the CFA Program as a clear signal to employers that they are serious about a career in the investment profession. Our research found that undergraduate university students—already immersed in studying and skilled at exam preparation—expressed interest in enrolling in the CFA Program earlier as they seek an edge in the marketplace for coveted internships and employment. This is also designed to help address industry demand for well-trained, ethical professionals.
By 2026, the employment of stock market experts is expected to rise faster than average employment because the market is one of the top achievers among global economies; there are many more career options in the equity market that one can select according on your interests and talent, so it’s not just restricted to traders or investors.
While there is no upper age limit for enrolling in the course, one must fulfill the eligibility criteria to be able to sit for the exam.
How have the codes developed by the CFA Institute benefited the corporate world?
The creation and administration of regulations, best practice guidelines, and standards that direct the investment industry and make sure all investment professionals put the interests of their clients first are essential components of the CFA Institute’s purpose.
To help investors identify asset managers who have committed to high standards of professional conduct, one of these is the voluntary Asset Manager Code (followed by more than 1,000 businesses worldwide).
The global standard for professional conduct for investment professionals is the Code of Ethics and Standards of Professional Conduct.
A voluntary, international industry standard for disclosure requirements for investment products with ESG-related elements has also been produced by the CFA Institute.
I think that our optional code of conduct for DEI can contribute to the inclusion of a larger range of perspectives from diverse talent, which should lead to better investment outcomes.