Home Business If I Pass The CFA Exam Will I Get Higher Pay?

If I Pass The CFA Exam Will I Get Higher Pay?

The CFA exams are favored as one of the top financial services qualifications to achieve—across the world. A common misconception is held though that simply passing the exams will help you get higher pay. Education always opens the door to better-salaried jobs. True, right? Hmm. Many students ask me straight, “If I pass the CFA exam will I get higher pay?” and my answer to them is always, “No.” This may come as a shock, so let me explain more.

Get The Timeless Reading eBook in PDF

Get the entire 10-part series on Timeless Reading in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.

See 2017 Hedge Fund Letters.

Valuation Master Class

Only Time Will Tell

According to the CFA Institute, “Candidates report dedicating in excess of 300 hours of study per level to prepare for each exam.” This means nearly 900 hours of study is necessary to pass all three CFA exam levels.

900 hours = 5.36 weeks = 37.5 days

That’s all of your average paid working vacation, and then some. If you’ve started early—perhaps you’re studying in full-time education—the added pressure of CFA exam preparation is still going to be a monumental task. You may get more vacation time, but this is still no easy feat. And don’t fall victim to the belief that a financial degree means you won’t need to put in the same study hours, the CFA exam is not the same as college. Once you’ve decided to begin, you should commit to studying and passing all three levels. Passing the CFA Level I exam only allows you to put “Level One candidate” on your resume. To gain full CFA charterholder status, you must sit and pass all three. And the work doesn’t stop there. Being disciplined enough to devote 900 hours to any area of your life is hard, but applying that length of time to solitary study alone is nearly impossible for most. The good news is that you only have to study 300 hours between each CFA level since the exams occur iteratively over time.

Equality For All

Setting yourself the target of passing all three CFA exams is an intelligent and admirable choice in such a competitive global economy. The financial world needs experts who are capable of offering crucial financial advice. But while the CFA program can help you break into the financial industry of equity research, asset management, and hedge funds, there is a lot more you need to do than just pass the three exams. Once you’ve passed Level III, you also need to submit 48 months of requisite “acceptable professional work experience.” There is no limit to the number of times a candidate can sit the CFA exam. Once completed, it will not matter how long it took, those who pass Level III will receive the same designation as others on the same level.

What are the implications of this, you ask? Consider: One candidate takes 10 years or more to pass, with multiple exam failures on each of the three levels. A second candidate passes all three tests in the swiftest possible time of 18 months. Having passed Level III, these two now have the exact same designation, and there is no way to tell them apart if they apply for jobs or speak as an authority on a financial subject. The distinguishing accomplishment only comes from achieving the full CFA charter designation once all the requirements are met—including the strict work experience guidelines.

Motivate Yourself

So, back to the salary. If your main goal is only to earn a higher income, then you are unlikely to stay motivated for 900 hours. However, if your goal is about becoming a leader in the field of finance, becoming a leading financial employee, and becoming a better manager of your own money, then you may just be able to stay focused long enough. Heed this article’s warning; If you’re ready to work hard, the CFA charterholder designation is definitely a worthy ambition. But don’t make money your sole motivation for aiming to reach this prestigious global designation.

Article by Become A Better Investor

Previous articleAncient Human Finger Sheds Light On Migration
Next articleRadical Heights, A New Battle Royale Competition To PUBG, Fortnite
Dr. Andrew Stotz, CFA is the CEO of A. Stotz Investment Research, a company providing institutional investors with ready-to- invest portfolios in Asia that aim to beat the benchmark through superior stock selection. The company also provides buy- and sell-side clients with financial models to value any company in the world and World Class Benchmarking to determine what companies are financially world class. Previously, as Head of Research at CLSA, Andrew was voted No. 1 Analyst in Thailand in the Asiamoney Brokers Polls for 2008 and 2009. He was also voted No. 1 Analyst in Thailand in the 2009 Institutional Investor magazine All-Asia Research Team Report. Andrew earned his PhD in finance at the University of Science and Technology of China in Anhui province, with a focus on answering questions raised by fund managers and analysts during his career about picking stocks and managing portfolios. In addition, Andrew has been a lecturer in finance for 22 years at various universities in Thailand. Since 2013, he has been the president of the CFA Society of Thailand. He is also the author of How to Start Building Your Wealth Investing in the Stock Market.