CFA Levels Explained: Complete Guide to CFA Levels, Syllabus and Exam Structure

Key Takeaways

• How many levels of CFA are there? The CFA Program is a globally recognised credential divided into three increasingly difficult levels.

Comprehensive Guide: CFA Levels

• What is CFA?

The CFA is a globally recognised professional credential for investment and finance professionals.

• What is CFA level 1?

This first exam focuses on fundamental financial tools and asset valuation knowledge.

• What is CFA level 2?

The second exam emphasizes complex asset valuation and financial statement analysis techniques.

• What is CFA level 3?

The final exam focuses entirely on portfolio management and wealth planning strategies.

• What is differences in CFA levels?

Each consecutive level shifts focus from basic knowledge to complex investment applications.

• What is scope after CFA levels?

Passing the levels opens excellent career opportunities in global investment banking and research.

A complete guide to CFA levels, which consists of the total number of CFA levels, will include the specific requirements for each CFA level (syllabus), the difficulty of the exams, and pass rates, along with career opportunities at each of the three levels of the CFA Program.

Want to Know Exactly What Your Next CFA Step Should Be?

Plan Your CFA Journey

You’re probably wondering how many levels exist under the CFA and what is required to complete them. You’re not alone! There are thousands of people aspiring for a CFA. Looking for the CFA programme will open up many career possibilities worldwide in fields such as Investment Banking, Portfolio Management, and Financial Analysis.

Before registering for the Level 1 CFA exam, you must understand the structure of all CFA levels, the total number of CFA levels, the number of subjects broken down by each level, how difficult each level will be, and the pass rate of each level.

This comprehensive guide will show you the syllabus for each CFA level, demonstrate how each CFA level differs from one another, and provide you with the necessary information to plan for each level by taking one step at a time.

What Is CFA?

What is CFA?, CFA is the Chartered Financial Analyst program by CFA Institute with global recognition. The CFA Program has different faculties for investment management, financial analysis, portfolio strategy, and ethics in finance. The CFA charter is one of the most well-respected credentials globally within the finance profession. 

Understanding the Levels of the CFA Program

The CFA program consists of a total of three (3) levels, including:

1. CFA Level I Exam
2. CFA Level II Exam
3. CFA Level III Exam

The purpose of each level is to provide a test of the candidate’s skills of increasing complexity, and beyond just knowledge. Now, let’s talk about how you can accomplish the CFA Program successfully with the following description of what is included in each level.

CFA Program Structure

The CFA Program consists of three sequential levels. Here’s how the structure works:

• Three sequential exams – Each level must be passed before moving to the next.
•  Computer-based Tests: Available multiple times during the year.
• Increasing levels of difficulty: From basic concepts through portfolio decision-making.
• Ethics policy on all levels of the CFA: Every level tests for ethical compliance and conduct.
• Experience Requirement: Must have 4,000 hours of related work experience to be awarded the charter.
• International Acceptance: Approved in 160+ countries.

Knowing the full number of levels to be achieved will help you understand how to organise your time and prepare.

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CFA Level I: Laying the Foundation

The CFA Level 1 Exam is the entry point into the CFA Program. It focuses on fundamental knowledge and basic investment tools.

If you’re asking about CFA Level 1 subjects, here’s what you need to know.

CFA Level 1 Subjects

The CFA levels syllabus at Level 1 focuses on understanding concepts rather than applying complex valuation models.

Key Focus of CFA Level 1 Exam

• Comprehending Financial Statements
• Basic Tools for Valuation
• Ethics in Accounting and Finance
• The Time Value of Money
• Introduction to Portfolio Management

All Questions on the CFA Level 1 Examination are multiple-choice questions. 

CFA Level II: Analysing Investments

Upon completion of Level 1, your next step is to take the CFA Level II exam because the focus moves from understanding to applying knowledge.

Before registering for CFA Level II, many candidates look to discover more about the important subject areas.

CFA Level 2 Subjects

The CFA Level 2 subject areas remain similar to Level 1, but the complexity increases significantly.

Key Focus of CFA Level 2 Exam

1. Learning through real life
2. Valuation models are used (Discounted Cash Flow, Residual Income).
3. Adjustments to financial statements to facilitate evaluation.
4. Method of evaluating securities’ worth by using their value or income generation capability.
5. Conduct a thorough analysis of potential investments.

The CFA Level 2 Examination utilises an item set format that requires greater analytical ability and requires many calculations as compared to the CFA Level 1 Examination.

CFA Level III: Applying Portfolio Management

The CFA Level Three Exam, or CFA exam 3, is the third and final exam in the CFA programme and is often regarded as the most tactical level of the CFA programme.

Candidates looking for CFA Level 3 subject matter typically wish to focus on portfolio management.

CFA Level 3 Subjects

Unlike earlier CFA levels, Level 3 emphasises portfolio management and wealth planning.

Key Focus of CFA Level 3 Exam

• Financial Planning
• Asset Allocation
• Behavioral Finance
• Risk Management Strategies
• Institutional Portfolio Management

The following are the components of the CFA Level 3: Exam:

• Constructed Response
• Case Studies
• Application of Problem-Solving Skills

The CFA Level 3 exam tests applicants’ capabilities to make decisions rather than simply know things.

Differences Between CFA Levels

Now that we have learned the Total Levels of the CFA programme, let’s examine how each level differs in its formats, depths, and difficulties and how much they can impact salaries for CFA Candidates to become successful.

Why is CFA Level 1 Different from the Other Levels?

The CFA Level 1 exam is different from other levels because it creates the foundation.

• Question Format is: 100% Multiple Choice
• The Knowledge depth of this level is: Basic Understanding
• Topics are weighted: There is a broad coverage of subjects: 10 subjects
• The Difficulty Level is: Moderate
• The pass rate is approximately 35-40%.
• The salary for someone who passes level 1 at this point would be starting as an entry-level analyst at around ₹ 4 – 8 LPA (4 – 8 Lakhs Rupees per Annum) in India.
• The focus of someone preparing to take their CFA Level 1 Exam would be on obtaining thorough knowledge of the subjects.

When compared to the other levels of the CFA Program, Level 1 tests more breadth than depth.

Why is CFA Level 2 Different from the Other Levels?

The CFA Level 2 exam is more analytical, focusing on valuation techniques.

• The Question Format is: Item Sets/Case Study Type Questions/MCQ
• The Knowledge Depth of this level is: Advanced Application
• Topics Weighed: Heavily weighted towards Financial Reporting and Equity
• The Difficulty Level is: High
• The Pass Rate is approximately 40-45%.
• The Salary after passing CFA Level 2 for Investment Analyst positions is ₹8-15 LPA in India.
• The Focus of someone preparing for CFA Level 2 will be mastering the subjects at a higher level of understanding.

Level 2 Exams are the most difficult of all CFA Examinations because the majority of questions contain calculations.

Why is CFA Level 3 Different from Other Levels?

The CFA Level III test is strategic and decision-based.

• Question Format: Essay + Case Study
• Knowledge Depth: Portfolios in the real world
• Topic Weight: Heavy Portfolio Management
• Difficulty Level: Conceptually Difficult
• Pass Rate: Approximately 45 to 50%
• Salary after Level III: Portfolio Manager ₹15–30+ LPA
• Focus: Application of the CFA Level III Syllabus in Real-World Examples

Level III is a culmination of all CFA Courses Syllabus successfully and its Application to Real Life Investment Strategies.

Quick Comparison of CFA Total Levels

The CFA Program consists of three progressively challenging levels that require a minimum of 300 study hours each: Level I (tools and concepts), Level II (asset valuation), and Level III (portfolio management)

Why Zell?

Zell is more than a training program – we provide support to help you through the entire process of completing your CFA preparation and all three levels of the CFA certification.

Here’s what makes us different from our competitors: 

• Each CFA Level has structured coaching provided.
• Our instructors have extensive experience in the finance industry. 
•  You will be assigned a dedicated mentor. 
• Mock exams that match the actual CFA exam (i.e., CFA Level 1 exam, CFA Level 2 exam, CFA Level 3 exam), and we provide placement assistance to all students.

So, whether you are asking, “How Many Levels Are in CFA?” or preparing for your CFA Level 2 exam on a subject-specific basis, Zell will help you get clarity, structure, and results on your journey to completing the CFA program.

To start your CFA journey, it is important to know how many CFA total levels exist; in order to be successful in your journey, though, you also need to have the right guidance.

Conclusion

To be considered a Chartered Financial Analyst, you need a clear understanding of the CFA Program levels. You must first learn the topics from CFA Level 1; then take a more in-depth study of the topics from CFA Level 2; after that, you’ll use the information learned in CFA Level 3 to create an advanced understanding. As a finance student with all the knowledge you have gained while completing all levels of the CFA Program, your perspective will shift to that of an investment professional.

FAQs on CFA Levels Explained

How many levels are there in CFA?

The CFA Program has three exam levels. Level I tests basic concepts, Level II evaluates analytical application, and Level III focuses on portfolio development.

Is CFA Level 1 vs 2 vs 3 difficulty?

Within each level of the CFA, Level I tests knowledge of both the subject matter and the concepts, Level II tests calculations and analytical skills, and Level III tests practical application and concept-based problem-solving capabilities.

Which level of CFA is most difficult?

Many candidates feel that Level II has traditionally been the most complex level due to its case study format and extensive area of coverage.

Can CFA Level 2 get you a job?

Successful completion of CFA Level II enhances job opportunities in characterising investment securities, as employers value development in the CFA Level II syllabus and quantitative evaluation ability demonstrated through Level II completion.

Is 7 months enough for CFA Level 3?

Yes, 7 months can provide sufficient time to prepare and complete the CFA Level III Exam, provided study is ongoing throughout the 7 months, and focus is on working through the CFA curriculum.

Is CFA higher than MBA?

The CFA Program concentrates on investment management across all 3 levels, while an MBA is a broader-based study of management throughout business areas.

Current Role

Co-Founder & CEO at Zell Education

Education

• ACCA – Association of Chartered Certified Accountants, Finance (2011 – 2014)
• Bachelor of Commerce (BCom), Financial Markets from H.R. College Of Commerce & Economics (2010 – 2013)

Location

Mumbai, India

Expertise

ACCA Certified