Most people know what a CPA does, or have worked with stock brokers, but when it comes to the most sensitive, high-value finance tasks, chartered financial analysts (CFAs) are the top dogs. Rather than helping individuals navigate their financial needs, CFAs almost exclusively work with large businesses or, in some cases, high-net worth individuals. That means honing financial research skills, equity investing, and corporate finance knowledge. It’s not an easy field to break into.
Becoming A CFA
If you are considering a career as CFA, you have a lot of work ahead of you. Because it’s such a high level role, in order to earn your charter, you need a significant amount of on-the-job experience – 4000 hours, in fact – in addition to passing your CFA exam and submitting letters of recommendation. Clients need to trust their CFAs in ways that go beyond basic professionalism, which is why the recommendation requirement is so important. There’s just too much at stake in the jobs they’ll go on to perform.
The Work Of The CFA
As established above, CFAs work with wealthy individuals or large businesses, but do they hold particular titles or roles beyond this license? This depends on a number of factors. For example, some CFAs pursue the license but then go on to become entrepreneurs. That’s because, much like an MBA, a CFA license comes with valuable business skills – though their capabilities go well beyond that of your average MBA holder. In fact, unless you’re able to parlay your CFA license into a successful financial consulting business, you’re likely underselling yourself.
Rather than becoming an entrepreneur, a much more common path for newly minted CFAs is becoming an investment consultant for other businesses. Though most entrepreneurs can handle their own investments, since they’re relatively small, major corporations, especially publicly traded companies, need more knowledgeable professionals to handle their investments wisely.
Another common job for CFAs is in investment banking. In fact, large banks and their affiliated wealth management programs are among the top employers of CFAs, as are hedge funds. Essentially, anywhere you find complex investment portfolios, you’ll also find CFAs at work.
An Evolving Qualification
The finance industry is evolving quickly, particularly with the growth of fintech, and that shift has had a substantial impact on the work of CFAs. As of 2018, the CFA Institute has included data analytics, algorithmic trading, and other fintech-related concepts on the qualifying exam. That means today’s CFAs may be working alongside robo-advisors to provide support for peer-to-peer lending platforms, and the many financial applications now populating the market.
Tackling the CFA exam takes a great deal of skill and experience, but it’s not always enough on its own. In some roles, you may also need to hold an MBA or additional certification, depending on your responsibilities. Luckily, because of the on the job experience earning your CFA requires, many candidates have already completed those requirements.
The key to success, then, is to stay abreast of recent innovations in the field and open to new opportunities. As with so many industries today, technology is changing how we work, and that applies as much to CFAs as any other profession.