Chartered Financial Analyst (CFA) Definition and Exams (2023)

What is a Certified Financial Analyst (CFA)?

A Chartered Financial Analyst (CFA) is a globally recognized professional title, issued by theCFA-Institut, (formerly AIMR (Association for Investment Management and Research)), which measures and certifies the competence and integrity of financial analysts. Candidates must pass three levels of exams covering areas such as accounting, economics, ethics, money management and security analysis.

From 1963 to the first half of 2022, more than two million candidates applied to theLevel I exam, with 291,500 candidates ultimately passing the Level III exam, representing a weighted average completion rate of approximately 11%. In the last 10 years, the graduation rate was just under 9.6%.

Historically, pass rates on any exam have been under 50%, making obtaining the CFA charter one of the most difficult types of financial certification. A minimum of 300 study hours is recommended for each exam.

  • The CFA chart is one of the most respected designations in finance and is widely regarded as the gold standard in investment research.
  • To become a charterholder, candidates must pass three rigorous exams, have a bachelor's degree, and have at least four years of relevant work experience. Passing the CFA program exams requires strong discipline and a lot of study.
  • There are more than 160,000 CFA cardholders in 164 countries and regions worldwide.
  • The designation is conferred by the CFA Institute, which has nine offices and 156 local member societies worldwide.

The basics of becoming a Certified Financial Analyst (CFA).

The CFA letter is one of themost respected designationsin finance and is widely regarded as thegold standardin investment analysis. The award is presented by the CFA Institute, a global nonprofit professional organization with more than 164,000 charterholders, portfolio managers and other finance professionals in more than 151 countries.Its stated mission is to promote and develop a high level of educational, ethical and professional standards in the investment industry.

Before a candidate becomes a CFA certification holder, they must meet one of the following educational requirements. The candidate must have four years of professional experience, a bachelor's degree or in the final year of the bachelor's program, or a combination of professional experience and education totaling four years. For the undergraduate qualification, the bachelor's degree must be completed before registering for the Level II exam. In addition to the educational requirements, the candidate must have an international passport, take the exam in English, meet the eligibility criteria for professional conduct, and live in a participating country.

After meeting the enrollment requirements, the candidate must pass all three levels of the CFA program consecutively. The candidate must then become a member of the CFA Institute and pay annual dues. Finally, they must sign annually that they follow the CFA Institutecode of ethicsand standards of professional conduct. Failure to comply with ethics and standards is grounds for possible lifetime revocation of the CFA Charter.

Passing the CFA program exams requires strong discipline and a lot of study. All three exams can be taken once a year in June, with the exception ofNivel I, which can also be taken in December.

Although the exams can be taken as many times as needed, each exam generally requires candidates to study in excess of 300 hours.Given the significant amount of time that must be devoted to the degree, many candidates are discouraged from continuing with the CFA program after failing one of the levels. To receive a letter, each candidate must pass all three exams and have four years of qualifying professional experience making investment decisions.

The exams are difficult. Only 43% passed the placement test in June 2018, similar to previous years.Having the right plan and the discipline to follow the plan are essential skills to pass all three exams. Notably, 2018 saw a record number of test takers, according to theCFA-Institut. The institute said more than 79,000 people took their Level I test in June, a 25% increase from 2017.The increase in test participants came mainly from Asia. The institute now has testing centers in 43 countries around the world.

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Level I exam

The CFA Level I exam is held twice a year in June and December. It focuses on the analysis using the tools of the candidate's 10 subject areasbody of knowledge. These areas are ethical and professional standards, quantitative methods, economics, financial reporting and analysis, corporate finance, equity investing, fixed income, derivatives, alternative investments and portfolio management, and estate planning. The exam format consists of 240 multiple-choice questions that must be completed within six hours.


The Level I exam pass rate has averaged about 41% over the past decade, and for the Level I exam in February 2022, only 36% of test takers passed, allowing them to proceed to Level II.

Chartered Financial Analyst (CFA) Definition and Exams (1)

Level II exam

The Level II exam is only offered once a year in June. It focuses on the valuation of different assets and emphasizes the application of investment tools and concepts in contextual situations. Financial Reporting and Analysis exam questions are usually based onInternational Financial Reporting Standards(IFRS). The exam format consists of 21 item sets (mini case studies) with six multiple choice questions for each item set (120 questions in total).


The 10-year weighted average pass rate for CFA Level II is 45%. As of August 2021, only 29% of Level II test takers passed, allowing them to proceed to Level III.

(Video) 5 Benefits of Becoming a CFA Charterholder

Chartered Financial Analyst (CFA) Definition and Exams (2)

Level III exam

The Level 3 exam is only offered once a year in June. It focuses on effective wealth planning and portfolio management as the candidate is required to synthesize all of the analytical concepts and methodologies throughout the curriculum. The exam format consists of eight to twelve multi-part structured essay questions and ten multiple-choice questions that must be completed within six hours. Handwritten answers are hand-graded.


The 10-year weighted average pass rate for Level III is the highest at 52%.

Chartered Financial Analyst (CFA) Definition and Exams (3)

(Video) CFA | Chartered Financial Analyst | Everything you need to know about CFA

Restrictions on CFA Letters

The CFA Charter is widely respected, recognized worldwide, and is a difficult task. However, it is not a guaranteed path to wealth and fame. Before taking the plunge, you should carefully consider various downsides that come with acquiring one. The CFA is not a quick fix for a sick personcarrera. If you are enrolling in the program to jump-start a stalled career, you should first look for other reasons your career is not progressing. Before investing an inordinate amount of time and money into building your family tree, you might decide to improve your family treeSoft Skillslike work ethic and political softness.

Becoming a CFA certification holder is a large investment of time (recommended minimum of 300 hours per year for three years) or more if you fail and decide to retake an exam. You are likely to sacrifice time with family and friends and the pursuit of hobbies you enjoy. And after wasting so much time, there's no guarantee you'll get the letter.

Even if the cost factor does not play a major role, it is worth thinking about. A Tier I candidate pays a one-time program registration fee plus an exam registration fee. Level II and III candidates also pay a registration fee. Add to that the cost of the books and study programs you need to buy. Overall, you should expect to spend several thousand dollars each time you take the exams.

How long does it take to pass the CFA exams?

CFA exams are difficult and have a high failure rate. Each exam requires at least 300 study hours on average. Successful candidates take an average of four years to earn the designation.

How much do CFA exams cost?

Each of the three levels of the CFA exam costs $1,000 (reduced to $700 if you register early). There is also a one-time registration fee of $350.If you registered early, you would end up paying a total of $2,450.

Are CFA exams multiple choice?

The CFA Level I exam is fully multiple choice with 180 questions. The Level II exam consists exclusively of item pool questions. Level III consists of constructed response (essay) items during the morning session and item set questions during the afternoon session. Constructed Response Items typically consist of multiple parts related to a case study that describes one or more investment challenges.

(Video) How to Pass the CFA Level 1 Exam *2023* (90th Percentile)

Are CFA charterholders paid better?

Industry reports indicate that CFA certificate holders are paid more than those who have not completed the program. According to test prep provider 300 Hours, a CFA certificate holder earns, on average, 53% more than a Level I candidate when screened for years of work experience.


What are the 3 CFA exams? ›

  • CFA Exam Level I Overview. Level I, the first of the three CFA exams, measures basic understanding of the content areas above, along with investment analytical skills. ...
  • CFA Exam Level II Overview. The CFA Level II exam focuses on asset valuation and properly applying investment tools. ...
  • CFA Exam Level III Overview.

Is CFA a hard exam? ›

Overall, the CFA exams are very difficult, but candidates can increase their chances of passing by studying for over 300 hours, utilizing alternative prep materials, answering as many practice questions as possible, and creating a structured study plan.

How many exams are there for CFA? ›

The CFA program consists of three rigorous exams—CFA Level I, Level II, and Level III—that candidates must pass. In order to receive the CFA charter, candidates must also meet certain work requirements set out by CFA Institute.

What does the CFA exam allow you to do? ›

Getting your CFA charter allows you to gain analytical skills and expertise in quantitative methods, economics, financial reporting, investment analysis, and portfolio management. This set of skills and knowledge you will develop as you become a CFA charterholder will serve you well throughout your career.

How much does a CFA cost? ›

Registering and Paying for the CFA Exam
CFA Level 1 exam fee 2023
$350 one-time enrollment fee for 'first-timers'Early Registration deadline$900
Standard Registration deadline$1200

What is CFA Level 3 expected salary? ›

CFA level 3 salary 2023: The CFA Institute has updated the Level 3 Salary CFA 2023 and compensation on its official website, As per an impact assessment survey conducted by CFA Insititute in January 2023, the fresh CFA charter holders in India are offered an approximate 26.28 LPA salary.

How many times can I fail CFA? ›

How many times can you retake the CFA? CFA candidates can take each exam level a maximum of six times, a policy that was instituted in 2021. Also beginning with the 2021 exams, candidates can take an exam up to two times per calendar year, but cannot take the exam in windows that are less than 6 months apart.

What is CFA passing score? ›

Shoot for 70%, But Don't Worry if You're Lower

The Minimum Passing Score (MPS) set by the CFA® Institute will never be higher than 70%.

What is the salary of CFA Level 1? ›

An Entry Level CFA with less than three years of experience earns an average salary of ₹4.8 Lakhs per year. A mid-career CFA with 4-9 years of experience earns an average salary of ₹4 Lakhs per year, while an experienced CFA with 10-20 years of experience earns an average salary of ₹6 Lakhs per year.

How long is CFA exam valid? ›

No. Your results do not expire.

How many years does it take to clear CFA exam? ›

The CFA® Institute says that it takes the average candidate four years to finally become a licensed CFA®. However, some people have said it took them up to seven years to finally pass all three levels. On the other hand, the most accomplished CFA ®candidates have passed all three exams in 18 months.

Do you need all 3 levels of CFA? ›

CFA Program contains three levels of curriculum, each with its own exam. Passing the exam for all three levels is a requirement to obtain the CFA charter. Complete work experience requirements before, during, or after participation in CFA Program.

Can you take CFA exam without degree? ›

To fulfill the CFA Program entrance education requirements, you must have a bachelor's (or equivalent) degree or your exam window must be within 23 months of your graduation month.

What are CFA requirements? ›

The CFA Institute runs the CFA exam. Registration requires each candidate to hold a bachelor's degree or be enrolled in the last year of a bachelor's program. Applicants can also qualify by completing 4,000 hours of professional work experience or a combination of professional work experience and higher education.

Can I give CFA exam without experience? ›

You must have at least 4,000 hours of experience, completed in a minimum of 36 months. Qualified hours must be directly related to the investment decision-making process or producing a work product that informs or adds value to that process.

Do you have to pay again if you fail CFA? ›

The CFA program enrollment fee will remain valid throughout your candidacy, and you will need only to pay the registration fee for any future exams.

What if I fail the CFA exam? ›

If you fail the exam twice within a six month period, you will not be permitted to register again until six months after the date of your first failed appointment. Candidates are not eligible to retake the exam once they have passed.

Is CFA worth doing? ›

After removing the effect of work experience, we found that on average: CFA candidates who passed Level 2 saw an increase of 34% in total compensation; CFA candidates who passed Level 3 or Charterholders earned 53% more than those who had yet to pass CFA Level 1 exams.

Who earns more CPA or CFA? ›

If you compare the experience levels of the CFA and CPA samples, you'll see that in our analysis, the average CFA charterholder is more experienced than the average CPA. So you would expect the CFA charterholder to earn more, since they are likely to be in a more senior and higher-paid position.

Will CFA Level 1 get me a job? ›

If you complete the CFA level 1, you are eligible to work with several financial firms and mega companies. The first level is an intensive course, which ensures you are proficient in a wide range of finance subjects. Your training makes you a worthy hire even if you haven't finished all three levels.

How many people pass all 3 CFA exams? ›

CFA Pass Rates Statistics from 2016 to 2020
Level 1B43%45%
Level 246%45%
Level 354%56%
All levels45%46%
1 more row

How much does CFA earn in USA? ›

Chartered Financial Analyst (CFA) Jobs by Salary
Job TitleRangeAverage
Portfolio ManagerRange:$74k - $163kAverage:$108,124
Senior Financial AnalystRange:$71k - $120kAverage:$91,290
Vice President (VP), FinanceRange:$99k - $201kAverage:$146,092
Chief Financial Officer (CFO)Range:$98k - $255kAverage:$167,720
3 more rows
Feb 24, 2023

What percent of people pass all CFA exams? ›

The latest CFA pass rates are: 36% for Level 1 (Nov 2022) – the trend is still slightly below long term average. 44% for Level 2 (Nov 2022) 48% for Level 3 (Aug 2022)

How much does it cost to retake CFA? ›

Retake Fees

If you retake any level of the CFA exam, you will be charged the same examination fee. The fee will range from $700 to $1,450, depending on when you register to retake the exam.

How many times Pass CFA? ›

Candidates will have a total of six maximum attempts per exam level. Partially completed exams (e.g., completion of only one session) count towards the maximum attempts .

Can you fail CFA? ›

The chartered financial analyst (CFA) exams have always been difficult to pass, with the average pass rates for all three levels at 45% for the period from 1963 to 2021. 1 The COVID-19 pandemic has led to pass rates dropping even further due to multiple factors including exam cancellations and candidate deferrals.

How many hours is CFA Level 1? ›

Studying for the Level I exam is crucial, and it takes a substantial effort. There are no shortcuts. The one thing standing between you and success on the Level I CFA® Program exam is hard work. CFA Institute recommends you aim to spend at least 300 hours preparing for the Level I exam.

Is there a lot of math in CFA Level 1? ›

Most of the math is basic, but if you are going to take math anyways, statistics would be most helpful. The rest is basic algebra.

What is CFA Level 2 expected salary? ›

Employees who knows Cfa Level 2 earn an average of ₹19lakhs, mostly ranging from ₹18lakhs per year to ₹23lakhs per year based on 2 profiles. The top 10% of employees earn more than ₹22lakhs per year.

What is the minimum salary of CFA? ›

CFA Level 1 candidates on average earn ₹9.8 lakh. CFA Level 2 candidates earn ₹13.5 lakh, Level 3 candidates earn 17.5 lakhs and Level 3 cleared - charter pending candidates earn 20.7 lakh on average. Charterholders earn 44.4 lakh.

Can I complete CFA in 1 year? ›

The CFA course duration can be anywhere from 2 to 5 years. You have to study an intensive syllabus, sit for three competitive exams and pass all of them before you can call yourself a chartered financial analyst. Not everyone passes on the first attempt.

Can I study CFA on my own? ›

All three exams within the CFA curriculum are structured as a self-study programme, but there are some items that you must remember to prepare for the tests in order effectively, whether you plan to do them alone or by means of a tutor or study course.

How to pass CFA Level 1 in first attempt? ›

Focus on the heavier weighted topics, it is especially important in Level 2 that you focus on heavy weighted topics as you cannot chose questions in the exam. Leave enough time for practice questions and mock exams!

Can you do CFA without job? ›

Have a combination of four years (48 months) of full-time work experience and/or college/university education on the date of registering for the Level 1 exam. Work and education have to be full-time, but work does NOT need to be investment or finance-related.

Do you need a CPA to become a CFA? ›

The requirements to get your CFA license is quite different than the CPA license. If you have a bachelor's degree in any field, you can sit for the CFA Exam. If you don't have a bachelor's degree, then you need at least 4 years of experience—in any field—to take the exam.

Do you need maths for CFA? ›

To pass your CFA exam, you need to know your math 'cos 9 in 10 topics has formulas and requires that you do some calculation. To handle math problems, you need to get lots of practice. And to pass your CFA exam, you need to plan out your preparation.

Why CFA is better than MBA? ›

Traditional MBAs are broader than the CFA program, covering topics such as management, marketing, and strategy. The CFA program, on the other hand, provides deeper coverage of investment management. Ultimately, the decision on which one to pursue depends on what one's career goals in finance are.

Is CFA a degree? ›

CFA is a professional certification. It is not considered a post-graduate degree. But the level of education in the CFA program equals a master's degree. In other words, it is more of a qualified professional course, not an academic degree.

Is CFA Level 3 harder than 2? ›

Is the CFA Level III Exam Harder than Level II? Yes, the Level III exam is harder than the Level II exam because the Level III exam contains a constructed response section, and your knowledge in Portfolio Management and Wealth Planning makes up 35-40% of your score.

Is CFA Level 3 the easiest? ›

The Level III exam is considered one of the tougher exams for the CFA, as many of the questions are posed in essay format. The key to success is to practice as many essay type questions as possible and master topics specifically related to portfolio management, which is at the heart of this exam.

Do you have to take all 3 CFA exams? ›

To become a CFA Charterholder, you need to pass all 3 levels of the CFA exam. You can register for the level 1 exam if you meet the education and/or work experience requirements. The years of professional work also count when you pass the exams and want to use your CFA designation.

How many times can you fail CFA? ›

How many times can you retake the CFA? CFA candidates can take each exam level a maximum of six times, a policy that was instituted in 2021.

Is 2 months enough for CFA Level 3? ›

You should aim to commit at least 344 total hours to your Level 3 CFA exam preparation across the six to nine months of study.

What is the CFA minimum passing score? ›

Shoot for 70%, But Don't Worry if You're Lower

The Minimum Passing Score (MPS) set by the CFA® Institute will never be higher than 70%.

What score do you need to pass the CFA? ›

Passing Scores

Candidates must get a minimum passing score (MPS) of 70% on the multiple-choice questions on the CFA Level I exam, a minimum score of 65% to 70% on the multiple-choice questions on the CFA Level II exam, and a minimum passing score (MPS) of 60% on the multiple-choice questions on the CFA Level III exam.

Can I do CFA without a degree? ›

CFA Exam Requirements for 2021-2022

CFA candidates should have a bachelor's degree from an accredited educational institution. There is no restriction on major. However, since the exam itself is pretty tough, it is much better if you have majored in related subjects such as finance, business, and accounting.

What is the age limit for CFA? ›

Eligibility Criteria for CFA

Students must take the course's requisite entry tests. There is no upper age limit for enrolling in the course.

How long does it take to become a CFA? ›

Most candidates take 4-5 years to take and pass all levels of the CFA exam, and successful candidates spend around 300 hours studying for each level.

Which CFA exam is hardest? ›

Many CFA charterholders consider the Level 3 CFA Exam the most difficult because of the time and thought needed to answer the constructed responses successfully. While the typical Level 3 CFA Exam pass rates are the highest of the CFA Exams, only around 56% of CFA candidates pass the exam.

Can you get a job with CFA Level 1? ›

If you are a CFA Candidate with a finance background and are working on passing the CFA Level 1 Exam, some job opportunities available to you include: Investment Banking Analyst. Junior Financial Analyst. Personal Financial Advisor.


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