CFA Institute announced today that 43 percent of 115,027 current and aspiring investment professionals worldwide passed the June 2011 CFA exams, bringing them one step closer to earning the CFA designation, a mark of distinction that is globally recognized by employers, investment professionals, and investors as the definitive standard by which to measure serious investment professionals.
To earn the CFA charter, candidates must sequentially pass three six-hour exams that are widely considered to be among the most rigorous in the investment profession. The 2011 exams were given at 266 test centers in 189 cities worldwide.
The Level I global pass rate was 39 percent (48,068 took the exam, up from 46,863 in June 2010) and the Level II global pass rate was 43 percent (44,175 took the exam, up from 43,406 in 2010). Of the 22,784 individuals (up from 21,462 in 2010) who in June 2011 took the third and final exam that leads to the prestigious CFA designation, 51 percent passed. CFA Institute expects that the majority of candidates who passed the Level III exam will become CFA charterholders later this year, bringing the number of charterholders worldwide to nearly 100,000.
“It is encouraging to see the growth in the overall number of candidates registering for the CFA Program, despite the volatile aftermath of the global financial crisis,” said John Rogers, CFA, president and CEO of CFA Institute. “A number of factors are driving the demand for further financial education, including a desire for personal career development and a growing demand for well-qualified investment professionals.”
“We believe that we can help to rebuild trust in the financial community through education and the advancement of professional ethics in the investment profession; our charterholders do this by adhering to our Code of Ethics and our Standards of Professional Conduct. Last year, we conducted 20 panel discussions in worldwide locations to test our curriculum against what the profession needs and uses now. This continuous practice analysis process enables us to revise the curriculum annually – ensuring that we provide candidates with current and relevant practical knowledge.”
Commenting on the continued growth in the number of candidates sitting the CFA examinations from within this region, Nitin Mehta, CFA, managing director for Europe, Middle East and Africa at CFA Institute, said: “A CFA qualification has become a clear mark of distinction for investment professionals working in the Middle East. The rapid development of the financial services has seen a rise in demand for higher standards of professionalism within the industry and this is reflected in the number of candidates who have sat our exam over recent years and the number that have subsequently passed. The growth in demand has allowed us to expand the total number of examination centres to ten, with the recent addition of Abu Dhabi and Doha.”
The CFA curriculum includes ethical and professional standards; financial reporting and analysis; corporate finance; economics; quantitative methods; equity, fixed income, alternative investments; derivatives; portfolio management; and wealth planning. CFA Institute has administered well over a million exams since the inauguration of the CFA Program in 1963.
On average, candidates report spending in excess of 300 hours of study to prepare for each level. CFA candidates typically take four years to pass the three required exams. The Level I exam is offered twice per year, while the Level II and Level III exams are offered once each year. The Level I exam consists of multiple-choice questions. Level II is composed of item sets (i.e., mini cases with detailed vignettes), and the questions at Level III are 50 percent item set and 50 percent short answer and essay.
Those who passed the Level III exam – 11,567 candidates − will begin receiving their CFA charters in early October 2011, provided that they also have completed the minimum work experience requirement of four years in the investment industry, signed a commitment to abide by the CFA Institute Code of Ethics and Standards of Professional Conduct, applied to a CFA Institute society, and become a member of CFA Institute. (View an interactive website that recognizes the 7,353 charterholders who earned their charter in 2010.)
Just as earning the CFA charter shows that an investment professional is committed to a higher standard, hiring a CFA charterholder signifies that a firm is, too. Employers and media around the world recognize the CFA charter as the standard of professional excellence, and, with such widespread recognition, CFA charterholders earn a significant competitive advantage for international employment. CFA charterholders are typically employed by investment companies, mutual funds, broker-dealers, investment banks, and as private wealth managers.
Regulators around the world also recognize the value of the CFA charter (read more). Nearly all U.S. state securities commissions grant CFA charterholders an exemption from their licensing exams for investment advisers and investment adviser representatives. The NYSE and FINRA provide an exemption from the analysis portion (Series 86) of the Research Analyst Qualification Exam for certain applicants who have passed Level II of the CFA exam. Additionally, regulators in 21 other countries and territories such as Australia, Brazil, Canada, Hong Kong, Mexico, Peru, Singapore, South Africa, and the United Kingdom accept the CFA designation as meeting licensing or qualification requirements. In Indonesia, the Philippines, and Thailand, passing a certain level of the CFA exam is required to practice in the jurisdiction.
Select colleges and universities have an appreciation for the global relevance of the CFA charter and the advantages it provides for their graduates. These institutions have been identified by CFA Institute as CFA Program Partners and they embed a significant percentage of the CFA Program Candidate Body of Knowledge into their degree programs, as well as commit to cover the CFA Institute ethical and professional standards in the curriculum. This recognition tells students and employers that the university curriculum is closely tied to professional practice and is well suited to preparing students to sit for the CFA exams. Currently, there are 137 CFA Program Partners on six continents, including Saïd Business School at the University of Oxford and The Johnson School at Cornell University. (View historical pass rates) (PDF)
Examples of countries and territories with the largest number of candidates that took a CFA exam are the United States (29,537), Mainland China (13,787), India (10,515), Canada (9,514), the United Kingdom (7,742), Hong Kong (6,534), Singapore (3,619), Germany (1,689), South Africa (1,621), Switzerland (1,543), France (1,431), and the United Arab Emirates (1,158).
