In an online chat with readers, Vidhu Shekar, CFA, country head-India, CFA Institute shared advice on how to crack the CFA exam.
The Chartered Financial Analyst (CFA) Program is a professional examination that tests aspirants for their analytical skills and knowledge in the core areas of finance.
The program covers topics on investment management, financial analysis, stocks, bonds and derivatives, which are of interest to finance professionals.
To earn the CFA charter, candidates must pass all three exams, considered to be the most rigorous in the investment profession; meet the work experience requirement of four years in the investment industry; sign a commitment to abide by the CFA Institute Code of Ethics and Standards of Professional Conduct; apply to a CFA Institute society; and become a member of CFA Institute.
Over 1,89,760 candidates registered for CFA Level I, II and III in June 2017 exams globally, of which 17,125 were from India.
CFA Charterholders work across diverse sectors in various roles such as investment management, research, portfolio management, wealth advisory, etc.
The next CFA exam will be held on Saturday, June 3, 2017.
For the benefit of readers, Rediff.com had organised a chat with Vidhu Shekhar, CFA, country head - India, CFA Institute on Wednesday, June 1 between 3 pm and 4 pm IST.
Those who missed the chat, here's the unedited transcript:
senthilrajagopal: I am a CA and aged 49 can I take up now the CFA?
Vidhu Shekhar: There is no age limit for taking CFA exams. There are many candidates who do CFA in their forties and fifties.
Chintamani Kale: Hello sir. Usually after level-2 only people get good job. will it be difficult to crack level-3 while doing job? or should a candidate complete all levels before joining job?
Vidhu Shekhar: Hi Chintamani, Many of our L3 candidates work full time when they prepare for the exams. The CFA exam is intended for practicing professionals. However, you do need to make sure that you can find enough time to prepare. It would also help if you take a few days off before the exams.
Vishal Anand: How Vidhu, can you guide as to how we can become independent financial advisor
Vidhu Shekhar: Hi Vishal,CFA Level 3 has readings on private wealth management that covers essential topics like developing an investment policy statement, risk profiling and asset allocation. Once you have mastered the subject, you will need to understand the markets and then create an asset allocation that meets the client's needs. You should also develop a client base.
Deepalikumari: Mr Shekhar, can engineers also apply for CFA? How will it benefit my career?
Vidhu Shekhar: Yes, many engineers go through the CFA program. Quite often they can find work as securities analysts as a first step in a rewarding investment industry career. Many global centres of excellence hire engineers with CFA level 1 and then train them further.
Vishal Anand: I have done CFA from ICFAI. Would you suggest me to pursue FRM from GARP
Vidhu Shekhar: Decision to pursue FRM would depend on your exact job role. In general, CFA covers risk management topics as well so you would have the basic risk management knowledge if you have passed the CFA exams.
Vishal Anand: Hi, I have done CFA from ICFAI. Should i pursue CFA from CFA Institute
Vidhu Shekhar: Yes, CFA from CFA Institute is the globally recognized credential for investment professionals. It also offers you the opportunity to become a member of CFA Institute and participate in the life long learning that is required to be a good professional.
Kushal trivedi: What is the criteria for appearing for this exam?
Vidhu Shekhar: You should be in the final year of your undergraduate degree course when you sit for the Level 1 exam. You should have obtained your undergrad degree before you sit for L2.
Rishi Vij: How to study Quantitative and Qualitative Material Differently ?
Vidhu Shekhar: In both cases you should first master the concepts. Quantitative subjects require a lot of practice so that you don't make mistakes in calculations. For qualitative subjects, proper conceptual understanding is important in order to distinguish correct answers from incorrect answers.
sreehari nair: Does scoring upwards of 67 per cent on the exam will ensure a minimum passing grade?
Vidhu Shekhar: There is no pre decided minimum passing score for the CFA exams, The minimum scores are decided based on a number of factors including the overall level of difficulty and performance of candidates.
Tj: Hi sir, I would like to pursue CFA charterholder. I have heard that CFA exams are quite tough so how one should prepare for CFA exams? Also, how CFA Program will help building my investment career
Vidhu Shekhar: The exams are not difficult if you put in the required hours of study. In general we find that candidates who prepare systematically and give start early find it easier to pass.
Saneeth: Hi, I'm giving CFA level-2 this year. I would also like to pursue MBA in finance. What are the advantages/disadvantages and probable career path of a person with both MBA and CFA. My primary interest is to work in front-office roles of IBs
Vidhu Shekhar: MBA and CFA are generally complementary. While MBA will increase your knowledge and skills across a wide area, CFA will give you in depth knowledge of areas related to investment analysis and management.
Divya Ramakrishna Nallabilli: Hello sir. I'm appearing for Level 1 day after tom. While writing mocks, I've observed that I need to improve in ethics and fra. Kindly suggest what I could do at this point of time.
Vidhu Shekhar: While last minute preparation is helpful, you should try not to stress yourself up too close to the exam. Just review what you have already done and make sure you are relaxed on exam day.
Viraj Garad: Sir, I have been trying to clear this exam since 3 years now. Kindly share some tips.
Vidhu Shekhar: There are no short cuts. You have to study between 300 and 400 hours for each level. It would be best to focus on the CFA curriculum materials when you study. There are preparatory course providers who provide classroom and online training. However, CFA program is structured as a self study program so you can study from the curriculum by yourself.
Sandeep Rajapure: Is there negative marking in CFA?
Vidhu Shekhar: No, there is no negative marking.
Chinmay Thakur: Where can I find previous years' question papers?
Vidhu Shekhar Mock exams are available to candidates. You can also practice with the end of chapter questions in the curriculum readings.
Roshan Parkar: How is CFA different from CA?
Vidhu Shekhar: CFA is meant for roles requiring investment decision making while the focus of CA is mainly accounts and taxation. Many CAs also pursue CFA.