The CFA Curriculum

The CFA study program encompasses many areas of the financial industry, as well as a strong emphasis on ethics and professional responsibility. As we’ve discussed briefly, the CFA candidate must pass three exam levels. The CFA Institute recommends that each candidate spend at least 250 hours in preparation for each level. The curriculum is self-study, which means that the candidate can pace him or herself according to his or her own comfort level. However, as exams are only given on certain dates, the candidate must create the pace to fit within those timelines. From the organizational perspective, the fact that the program is self-paced is very important. The candidate that completes all three levels successfully will prove that he or she is dedicated, determined, and goal-oriented. From an education perspective, we know that any self-paced program requires this dedication and determination, not to mention the discipline to make study a part of every day life.

The next important aspect of the CFA curriculum is who determines topic areas, how those areas are chosen, and who writes the content for those topics. First, the curriculum itself changes from year to year due to the changes that constantly occur on a global scale in the investment world. Major changes are undertaken every five years – and only after a detailed analysis of the practice on a global scale. In terms of curriculum development, a committee of active CFA charterholders determines content and the content is then written under their tutelage by the CFI Institute staff. From a training and development perspective, many corporations would love to have a committee of practicing professionals who actively look at curriculum to keep it fresh. And because of the changing nature of the financial markets, the CFA curriculum must be in constant change, as well. This combination of practicing Subject Matter Experts as well as field analysis make the CFA curriculum strong, current, and in constant change with the financial world.

The topics that are currently covered in the CFA curriculum are varied, including ethical and professional standards, statistics, analysis, economics, financial reporting, corporate finance, equity investment, fixed income securities and markets, derivatives, alternative investments, portfolio management, and wealth planning. Because practicing CFA’s develop the curriculum, the content tends to be on the practical side, versus more theoretical knowledge that a person might obtain in a university degree program. Plus, the broad-based, generalist approach allows the CFA candidate to absorb topics in a way that keeps them from being too product or market specific. This approach also allows the organization to create a talent pool with broad knowledge that can be applied in various settings, positions, and projects.

The CFA curriculum is broken down into multiple study sessions within the topic areas. Each of these sessions contains readings from Institute content, textbooks, professional journals, analyst reports, and case studies, along with problem sets that correlate with the reading and require practical application of the information. In addition, each session and reading contains specific learning objectives so that the candidate can understand what he or she is going to be expected to do even before the lesson begins. The CFA Institute includes multiple additional resources, such as comprehensive outlines and indices, as well as a glossary.

The exams are almost textbook-perfect examples of Bloom’s taxonomy in action. Exams, as we’ve discussed, are given in June and December in multiple locations. Each exam is broken down into three levels that vary in both testing method and taxonomy levels. For example, Level One exam questions are generally multiple-choice and cover knowledge, comprehension, and some analysis. Level Two are case-study questions that cover analysis and application, and Level Three are both essay and case-based in nature, covering synthesis and integration. From an adult education standpoint, the fact that each exam has three levels that cover multiple testing methods and taxonomy levels is impressive. This shows us that the CFA Institute is dedicated to ensuring that each CFA leaves the program with not only knowledge but the skill necessary to apply that knowledge in multiple situations.

One of the other benefits from a learning standpoint is that the exams are given only in English. This may seem tough to some, but the Institute maintains that this is a method for ensuring fairness and accuracy in both delivery of exam material as well as grading. From a consistency standpoint, the English-only exams also ensure a high level of learning and application for candidates.

Before we move on, let’s look at the CFA curriculum and exam structure as it relates to organizational benefits. We’ve already determined that a self-study curriculum requires a dedication and discipline that some people simply do not possess. But in regard to the content itself, a CFA candidate will be receiving the most up-to-date content available since practitioners compile it. This seems to take the onus off of the organization for ensuring that the CFA is consistently up to date. With the network of CFA professionals in addition to the curriculum, your organization can concentrate on training in other functional or behavioral areas. This is a definite benefit if you are planning to build a department comprised of CFA’s. Finally, the exam structure ensures that each professional has a detailed knowledge – but is able to apply that knowledge. As organizational development professionals, we too often see that there is a gap between knowledge and execution. In the case of the CFA, this gap is probably very narrow.

Next, we will move from the curriculum to the recognition and standard of the CFA program as a benefit to both the organization and the individual.