Are you planning to become a CFA Charterholder? In order to become a CFA Charterholder, completing the three levels of CFA exams is not enough. Aside from having the right knowledge and skill to study and pass the CFA exams, you will also need to have relevant work experience to be able to earn your charter.
If you want to receive your CFA charter, it will be needed for you to become a member of the CFA Institute, and to be able to become a member of the CFA Institute, you will have to produce the relevant work experience.
What does qualified investment work experience mean? According to the official website of CFA Institute at cfainstitute.org, qualifying work experience refers to the kind of experience in activities described as follows:
- Evaluating or applying financial, economic, and/or statistical data as part of the investment decision-making process involving securities or similar investments, which includes, but is not limited to, publicly traded and privately placed stocks, bonds, and mortgages and their derivatives; commodity-based derivatives and mutual funds; and other investment assets, such as real estate and commodities, if these other investment assets are held as part of a diversified, securities-oriented investment portfolio; or
- Supervising, directly or indirectly, persons who practice such activities; or
- Teaching such activities.
When is the time to get this kind of experience? Feel free to complete the work experience any time before you take the exams, during the time you are preparing and writing the exam or after you have completed a total of three levels of the exam. Do not forget to spend a minimum of 50% of your time in the investment decision-making process. Another to take note is that it is a must for your employment with the state job title to have been full time. As for the accrued employment for summer, internship and part time positions, they all do not qualify.
Then, how much work experience is required for CFA? According to the official website of CFA Institute, it is a must for you to have a minimum of 4,000 hours of experience, completed in at least 36 months or in a minimum of 3 years. It should be noted that qualified hours have to be directly related to the investment decision-making process or producing a work product that informs or adds value to that process. As mentioned above, every experience that is earned through full time, part-time, or remote work arrangements can qualify, whether it is before, during, or after your participation in the CFA Program.
If you want to calculate your work experience, you can do it by calculating the percentage of time that you spend every working week performing investment decision making activities. After that, it will be calculated for you based on the number of months that you have been working in every position.
In case you have a hard time to calculate your work experience, CFA Institute has a tool that will guide you through what is considered relevant work experience. This tool is easy to use. Here is the link that you can click to find such a tool: https://interactive.cfainstitute.org/work-experience-self-assessment.
Feel free to take the short assessment to see whether your work experience is likely to qualify for regular membership by going to the link above. There are a total of ten questions that you will be able to find, including:
- Do you construct or rebalance client portfolio, prepare financial models, or perform/evaluate independent analysis leading to an investment decision?
- Yes ● No
- Do you make investment decisions based on the application of finance, economic, or statistical data involving securities or similar investments held as part of an investment portfolio?
- Yes ● No
- Do you determine capital structure and funding needs through equity, debt, and alternative investments, conduct long-range financial planning, evaluate financial fundamentals, analyze and value securities for public offerings or mergers and acquisitions, and/or make asset sales and capital investment decisions?
- Yes ● No
- Do you conduct asset allocation analysis or apply investment knowledge to develop, analyze, and/or explain investment policy statements or strategies designed to achieve investor goals as part of the overall investment process?
- Yes ● No
- Are you engaged in investment/financial advising or planning for corporations, institutions, or individuals (other than yourself or your family)?
- Yes ● No
- Do you supervise employees who evaluate or apply financial, economic, and/or statistical data as part of the investment decision-making process?
- Yes ● No
- Do you research or develop tools, models, strategies, and/or communications that assist portfolio managers and traders with investment decision and risk management?
- Yes ● No
- Do you oversee legal/regulatory compliance matters in the investment profession, perform due diligence, and/or ensure that investment firms adhere to applicable laws, regulations, and professional standards of practice?
- Yes ● No
- Are you a full-time professor or instructor teaching finance-related courses and/or CFA Program curriculum, developing educational content, and engaging in research to advance the understanding of investment practice and theory?
- Yes ● No
- Do you design and implement software solutions for people, processes, and technology that directly drive investment decisions (i.e., software and/or platforms that are used to build financial models, construct, manage, and analyze portfolios, analyze risk and return)?
- Yes ● No
As stated before, the CFA work experience requirement for CFA Institute’s regular membership is 4,000 hours. It has always been like this even before March 3, 2021. While it remains the same for CFA Institute’s regular membership, the CFA work experience has been changed for CFA Program enrollment criteria when registering for Level 1. Before March 3, 2021, CFA Program enrollment criteria when registering for Level 1 include: have a bachelor’s degree or equivalent; or be a final year university student; or have a combination of professional work experience (it is fine if it is not related to investment) and education totaling 4 years. For those who are wondering about part time work, it is excluded. As for full time paid internships, they are accepted. Starting from March 3, 2021, the criteria includes having a combination of 4,000 hours of work experience, which can be non-investment related, and or higher education more than a minimum of 3 sequential years. If applicable, you can also assume 1,000 hours a year for higher education.
