CFA Level 1 Eligibility: Undergrads Can Now Start A Year Earlier
The Chartered Financial Analyst (CFA) exam is one of the toughest feats for finance aspirants and certainly one of the most coveted credentials in the finance industry.
Until November 2022, only students in the last and final year of their undergraduate studies could enrol in the CFA Level 1 examination. But what if we told you that now you can take your CFA Level 1 exam a year earlier
Yes, you read that right. The CFA Level 1 eligibility criteria has changed.
The CFA Institute has bent its rules for the better with effect from November 1, 2022. Students with two years left in their undergraduate studies can now sign up and take the CFA Level 1 exam. Before enrolling for the CFA programme, you need to thoroughly research on what you need to know about the CFA exam.
What Is The CFA Exam?
The professional credential CFA, or Chartered Financial Analyst, is given by the CFA Institute to individuals who successfully demonstrate proficiency in wealth management and investment analysis. This programme is recognised as a high-level qualification in about 165 nations, giving it international significance
Any senior or executive position in the investing business is open to CFA charter holders. CFAs support financial markets, assist firms and clients in trading securities, and aid in investing decisions
Read more about the scope of CFA in our blog “CFA Scope and Job Opportunities in 2022: Top Recruiting Sectors”.
Revised CFA Level 1 Eligibility Criteria
Aspirants keen on starting their careers as Chartered Financial Analysts must be up-to-date on the revised CFA exam eligibility criteria. These are as follows:
- Candidates must possess a bachelor’s degree or an equivalent.
- If candidates do not have a bachelor’s degree, they need 4,000 hours of competent, professional work experience.
- Candidates can also have a mix of work experience and education collected over a minimum of 36 months. However, the dates of education and practical job experience cannot coincide.
- Undergraduate students can now begin their CFA career a year earlier. Candidates in their second year of their bachelor’s programme can enrol.
- Candidates must possess a valid international passport to enrol in this programme to fulfil the CFA exam eligibility criteria.
- Candidate must be proficient in English to take the CFA exam.
Why Did The CFA Institute Make This Amendment?
According to the CFA Institute’s press release, the CFA Level 1 eligibility criteria amendment will allow students to showcase their CFA Level 1 achievement as a solid indicator of their commitment to a future in the investing sector.
Significant research undertaken by CFA Institute supports this new change. According to the findings, undergraduate students who are already engaged in academics and regular exams reported interest in signing up for the Chartered Financial Analyst programme sooner. This was reported because students wanted to stay ahead of the curve in internships and job opportunities. The change is going to open more avenues for aspirants.
CFA Level 1 Subjects
1. Ethical and Professional Standards
One can never excel in their profession if they do not adhere to ethical practices and high professional standards. The importance of ethics and professional standards is no less among CFAs. The total weightage of this paper is 15-20%.
2. Quantitative Methods
The Quantitative Methods paper holds great significance in the first level of the exam. It covers topics like cash flows and analytical tools and holds a weightage of 8-12%.
3. Financial Statement Analysis
Topics like analysing primary financial statements and understanding concepts such as revenue recognition and taxes are the main areas covered in this paper. There is 13-17% weightage on this paper.
4. Portfolio Management and Wealth Planning
The principles of portfolio and risk management are covered in this subject, along with return and risk measurement, portfolio planning, and portfolio creation. The weightage of this paper is 5-8%.
5. Economics
Analysis of supply and demand, different market structures, economic expansion, and the effects of business cycles on economic activity are some topics covered in the economics paper. The total weightage of this topic is 8-12%.
6. Corporate Issuers
A framework for understanding and assessing stakeholder management and corporate governance is a crucial part of this topic. This paper has 8-12% weightage.
7. Fixed Income
Markets for fixed-income securities, yield metrics, risk considerations, and valuation metrics and drivers are some of the concepts that students have to study as a part of this paper. The total weightage of this paper is 10-12%.
8. Alternative Investments
The five main categories of alternative investments are hedge funds, private capital, resources, real estate, and infrastructure. The Level 1 Alternative Investments curriculum carries a 5-8% weight.
9. Equity Valuations
Analysing the features of security markets, equity investments and indexes are a few areas covered in this paper. The total weightage of the equity valuations paper is 10-12%.
10. Derivates
The paper on Derivatives teaches students the key aspects and valuation ideas for forward commitments like forwards, swaps, futures and contingent claims. The total weightage given to this paper is 5-8%.
While the syllabus might look overwhelming initially, you can clear this exam quickly with a good CFA study plan.
CFA Level 1: Format
There are a few things you must remember about the CFA Level 1 exam format. Check out the CFA Level 1 exam format below:
- The CFA Level 1 exam duration is three hours, divided into a morning and an afternoon session.
- There are 240 multiple-choice questions with three alternatives. 120 questions each will be given in the morning and afternoon sessions.
- There is no mark deduction for incorrect answers.
- The exam can be taken in June and December.
Wrapping up
Students can start their professional journey a year ahead with the positive change introduced by the CFA Institute in the CFA exam eligibility. The policy reform meets the needs of candidates by allowing them to prepare for investment jobs. At the same time, it seeks to meet the industry demand for adept and ethical professionals.
If you aspire to become a qualified CFA, explore the CFA course by Zell Education. With an all-encompassing curriculum, personalised study plans, and an 80% passing rate, Zell ensures that you embark on a bright professional journey. Meanwhile, if you want to explore the benefits of the CFA Level 1 exam, read our blog “Is CFA Course Worth it? Top 7 Benefits of doing a CFA”.
Who is eligible for CFA?
The revised CFA exam eligibility criteria are as follows:
1. Students in the second year of their bachelor’s degree programme.
2. Students who have completed their bachelor’s degree.
3.Students who do not fulfil the educational requirements but have 4000 hours of work experience.
Can the 12th pass apply for CFA Level 1?
If you have four years of professional work experience, you can apply for the CFA Level 1 examination even if you have just passed the 12th grade.
Can I do CFA without a degree?
CFA without a degree can only be done if you have 4000 hours of professional work experience in the relevant field.
Does CFA Level 1 require work experience?
It does not essentially require work experience. But students who do not have the required educational qualification can apply if they have 4000 hours of work experience.
