CFA career paths: the roles the qualification is built for
The CFA is not a ticket to a single job. It is a qualification in investment analysis and management, and it is most relevant to roles where you analyse securities, manage portfolios, measure risk or advise on investments. This guide describes those roles in general terms and points out how the curriculum maps onto them. It makes no claims about pay or hiring, which vary too much to state responsibly.
Equity research
Research analysts study companies and industries and write recommendations. The daily work is reading financial statements, building forecasts and valuation models, and talking to management.
The curriculum material that bears most directly: financial statement analysis, equity valuation, corporate issuers and economics. The DuPont analysis guide and the inventory methods guide are examples of the techniques an analyst uses to read a company's accounts.
Portfolio management
Portfolio managers decide what to buy and sell, and in what proportion, within a mandate. Some run funds that invest for many clients, and some manage money for a single institution or family.
This is what the program is built around: portfolio theory, asset allocation, risk and return, and the construction and evaluation of portfolios. See the CAPM guide for the core return and risk model.
Fixed income and credit
Fixed income specialists price bonds, assess credit quality and manage interest rate risk, for asset managers, banks and insurers. Credit analysts look at an issuer's ability to pay.
Relevant material: fixed income, derivatives, and the quantitative tools that underlie them. Start with bond pricing and duration and convexity.
Risk management
Risk professionals measure, monitor and report the risks a firm or a portfolio is taking: market, credit, liquidity and operational. They build and challenge the models.
Relevant material: quantitative methods, portfolio management, derivatives and fixed income. A different qualification, the FRM, is aimed squarely at this field, and some people hold both.
Wealth management and advice
Advisors work with individuals and families to set goals, build portfolios and manage their money over a lifetime. The work involves as much listening and communication as analysis.
Relevant material: portfolio management for individuals, ethics and professional standards, economics and the basics of valuation. The ethics material is particularly relevant where clients rely on you.
Corporate finance and investment banking
Corporate finance teams decide how a company invests and funds itself. Investment bankers advise companies on raising capital and on deals. The CFA is less central here than in the roles above, and other qualifications and experience matter as much or more, but the valuation and corporate finance material overlaps substantially. The NPV vs IRR guide covers a core corporate finance decision rule.
Other places the knowledge turns up
Consulting, data and analytics roles in finance, financial journalism, regulation and academia all use the same body of knowledge, and some people take the exams for the learning rather than the charter.
How to use this
- Treat the list above as a map, not a ranking. Which roles are open to you depends on your background, location and the state of the market.
- Look at real job descriptions for the roles you want. If the CFA appears as required or preferred, that tells you more than any general claim.
- Talk to people doing the job. Ask what they use from the curriculum and what they wish they had studied.
- Remember that the charter requires qualifying work experience, so being in a relevant role matters as well as passing exams.
For a framework on whether the qualification is worth the effort for you, see is the CFA worth it?.
Sources
- CFA Institute, The CFA Program: the curriculum's topic areas and the charter.
This guide describes typical roles in general terms. It does not cite hiring or salary figures, because they vary widely by firm, region and year.