If you’re concerned you won’t pass the CFA exams because you don’t have a background in finance, you can officially set those worries aside.
The purpose of the CFA is to gauge your ability to analyze financial and accounting information. If you didn’t study these fields in college, you have the opportunity to learn them now! The exam revolves around concrete concepts laid out in Learning Outcome Statements (LOS) for each of its three levels. That means that with a strong plan for prep, you can learn everything you need to before the big day—even if you didn’t study finance in school.
Now, candidates with a background in finance, either through work or education, will no doubt have a better understanding of those core concepts right off the bat—but that doesn’t mean they’ll sail through the CFA without dedicated prep. There are two main reasons why.
1. Many topics will be new to exam preppers from all academic backgrounds. There are many topics that are new even to candidates with finance experience, particularly on the more advanced stages of the exam (Levels II and III). Those less-widely-known topics include alternative investments, fixed-income, and ethics … all of which are not covered in most finance undergrad programs. In short, anyone planning to take the CFA will need to prep. While a finance background can give you a running start, a lack of one is more likely to affect your confidence than your preparation.
2. Confidence can lead to complacency. In case you need more convincing, our expert CFA instructors find that many candidates with finance degrees actually perform worse on the exam. Why? Well, one of the major reasons is complacency. Many candidates with finance backgrounds feel overconfident and therefore don’t take the proper time to study and prepare as seriously as they need. In contrast, there are many candidates from other academic backgrounds, such as economics and engineering, who devise a thoughtful study plan, stick to it, and pass the exam.
The key for all future charterholders is to focus on meeting set study hour goals and homing in on the LOS of the exam—regardless of experience in finance.
Since prepping for the CFA is so crucial, it’s imperative that you use your time wisely. To do that, it’s also recommended that you seek help from a top-notch prep provider. CFA instructors know exactly what you’ll face on the test, and therefore they know exactly what you need to study. By helping you identify necessary topics, an instructor can save you time and energy through the entire process. You don’t want to waste valuable time on irrelevant subjects, and a prep instructor can make your study time more efficient.
How about what comes after the CFA? Are you required to have a finance background to obtain a charter? The short answer is, again, no. The CFA Institute simply requires you to have a bachelor’s degree (or equivalent) or be in the final year of your bachelor’s degree program. You’ll also need to have four years of relevant work experience, and, of course, you must pass all three levels of the CFA exam. The requirements make no mention of having any other sort of finance background.
So, your success on the CFA is not reliant on having a background in finance. What’s far more important will be your work ethic and study discipline leading up to the test. While CFA exams may be difficult, if you spend sufficient time studying, getting proper help, and learning all the LOS, you will be very likely to pass.
Want to get your baseline score? Take our CFA Level I mock exam to find out where you stand.
FAQs
While a finance background can give you a running start, a lack of one is more likely to affect your confidence than your preparation. 2. Confidence can lead to complacency. In case you need more convincing, our expert CFA instructors find that many candidates with finance degrees actually perform worse on the exam.
Can you pass the CFA without a finance background? ›
It can be done! So what does this all mean? Not having any finance background doesn't mean you're hugely disadvantaged. Your drive and study discipline will be a far stronger determinant in your CFA exam success than your background.
Is CFA worth it for non-finance professionals? ›
The CFA Program is a good choice for those in the finance industry looking for career advancement, non-finance professionals with interest in finance and undergraduates who are considering the many job opportunities for CFA charterholders, including consultant, analyst, financial advisor, portfolio manager, ...
Can I take CFA without work experience? ›
To be eligible for the CFA charter, you must have relevant work experience in the investment decision-making process, which includes evaluating or applying financial, economic, and/or statistical data.
Why do so many people fail the CFA exam? ›
Failed to Study Enough Hours
CFA Institute estimates it takes in excess of 300 hours to properly prepare for each level of the CFA exam. It is often hard to manage the work, social life, and study balance.
Do you need to be smart to pass CFA? ›
You don't have to be smart to pass a CFA exam. Because ultimately, each of the three exams is not a test of intelligence. Of course you'll need a sufficient understanding of a variety of asset classes, including: 🏦Fixed Income 🚀Equity 💰Alternative Investments But high IQ doesn't translate to a high mark.
Is CFA the hardest finance exam? ›
The Chartered Financial Analyst credential is one of the most demanding exams on Earth when it comes to preparation and study time required. The average pass rate for the CFA Level 1 is only 41%. For Level 2, you're looking at a passage rate of 45%. And Level 3 is not much easier at 52%.
How strict is CFA work experience? ›
Does Your Work Experience Qualify? 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.
Can you put CFA Level 1 on resume? ›
Include your participation in the CFA Program In the education section of your resume. (For example: “CFA® Program participant, CFA Institute.”) You may also list the levels completed. (For example: “Completed Level I in 2020.”)
Can you work in finance without a CFA? ›
Financial analysts do not need the CFA credential to work in the field, but employers may prefer individuals with certification. Candidates with a relevant degree alone can qualify for entry-level positions.
Average pass rates tend to fluctuate. Level 1 pass rates have hovered around 37% Level 2 pass rates have been around 45% Level 3 pass rates have been better around 52%
What percentage of people who start CFA finish? ›
Level I, II and III pass rates equaled 36%, 44%, and 48%, respectively. Since the CFA began administering the program in 1963, Level I, II, and III pass rates have averaged 41%, 46%, and 56%, respectively, with a total of 2.1 million, 963,594, and 543,322 separate exams taken at those respective levels.
What is the average age of a CFA candidate? ›
The average age of a CFA level I test taker was 26.6 in 2018. 12 However, these days, younger students frequently enter the program in their last year of school or shortly thereafter.
Can anyone take CFA level 1? ›
To register for the Level I exam, candidates must meet one of the following CFA certification requirements: Hold a bachelor's degree. Be an undergraduate student within 11 months of graduation.
Does CFA cover everything in finance? ›
The CFA covers a variety of corporate finance topics, such as budgeting, leveraging, portfolio management, working capital management, and foreign exchange.
Can you get a CFA with an economics degree? ›
The CFA Program is typically completed by those with backgrounds in finance, accounting, economics, or business. CFA charterholders earn the right to use the CFA designation after program completion, application, and acceptance by CFA Institute.
Is CFA necessary for finance? ›
Meaning of CFA Qualifications in the Financial Industry
As a private body, there is no legal requirement to hold a CFA certification to work in the fields of investment or finance; you only need to meet the licensing requirements for your occupation set by state and federal regulators.
