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.

Play Quizzes 4

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

London Value Investor Conference: Joel Greenblatt On Value Investing In 2022

The first London Value Investor Conference was held in April 2012 and it has since grown to become the largest gathering of Value Investors in Europe, bringing together some of the best investors every year. At this year’s conference, held on May 19th, Simon Brewer, the former CIO of Morgan Stanley and Senior Adviser to Read More

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

Updated on

In 1992 Dr. Andrew Stotz, CFA, left a management career at Pepsi-Cola in California to teach finance in Thailand. In 1993, he found his life calling as a financial analyst, a job for which he was eventually voted #1 in Thailand. In the second half of his 20-year career in investment banking, Dr. Stotz was a Head of Research, leading teams of financial analysts. He served as a two-term president of CFA Society Thailand and now runs his firm, A. Stotz Investment Research, which provides research and tools for institutions and high-net-worth investors and helps CEOs make their companies financially world class.
Previous article Ancient Human Finger Sheds Light On Migration
Next article Radical Heights, A New Battle Royale Competition To PUBG, Fortnite

No posts to display