If you’re interested in the Chartered Financial Analyst designation, the global standard for investment industry knowledge, then you’ll want to know about the recent updates to the CFA curriculum. At Skillfully, where we help firms and professionals find great courses, many of our client firms have been asking us about the changes.
Below are some common questions, and our answers. We’ve drawn on the expertise of Tim Davies from FTS, the training provider that features its excellent CFA I, II and III prep courses on Skillfully. Tim has trained more than a thousand CFA candidates, and is fully familiar with the new curriculum.
How big are these changes?
At Level I, they’re the most significant updates that the CFA Institute has made in six decades. But at Level II, the changes are relatively minor, and there are few changes to Level III – at least for now.
Why has the curriculum changed?
The CFA Institute, which administers the exam and awards the CFA designation, wanted to make the curriculum more practically applicable to the investment industry. The updates are based on years of consulting with stakeholders.
When do the updates come into effect?
People who take exams in 2024 will follow the new curriculum. Those writing exams in 2023 won’t be affected.
If you start studying now, by the way, you’ll very likely be aiming to write exams in 2024, since each level takes at least 300 hours of study.
Is the new CFA easier?
The content changes aren’t designed to make the CFA easier, but to be more relevant to the investment industry, allowing candidates to gain work-ready skills.
However, the structure of the updated CFA is meant to fit better into the life of an investment professional. CFA Level I is now divided into compact Learning Modules. Each Module can be covered in an evening of studying, and includes visuals, spreadsheets and other material salient to the industry. This is a change from the traditional structure, based on longer Readings. CFA Level II has partly made the transition to Learning Modules. Level III hasn’t (yet) done so.
How has the content of Level I changed?
Level I has sizable content updates. Compared to the 2023 syllabus, there is less focus on foundational or background knowledge. For instance, Quantitative Methods, Economics, and Financial Reporting & Analysis aren’t as prominent in the updated syllabus. Also, some of the foundational material is now prerequisite reading, rather than being directly examinable.
By contrast, there’s more focus on practical skills specific to investment professionals. The weighting has accordingly increased for Equity Investments, Fixed Income, Alternative Investments, and Portfolio Management.
Candidates must also complete an online Practical Skills Module, either in Financial Modeling or Python Programming Fundamentals. The PSM is not graded or examined, but you have to complete it timeously to receive your exam result.
How have the contents of Levels II and III changed?
Level II has relatively small content updates. One example is the change to Alternative Investments, where candidates now cover Hedge Fund Strategies instead of Investment in Private Equity Investments and Real Estate Through Private Vehicles.
Also, to receive their exam results, Level II candidates need to complete an online Practical Skills Module, choosing from three options: Python Programming Fundamentals; Analyst Skills; or Python, Data Science & AI.
Level III content hasn’t changed much. One of few updates is in the topic of Portfolio Management, where candidates will no longer deal with Behavioral Biases and Behavioral Finance, and there are minor adjustments to topics such as Overview of Private Wealth Management, Risk Management for Individuals, and Portfolio Management for Institutional Investors. Unlike in the two prior levels, the CFA Institute has not added a Practical Skills Module to Level III.
Do the updates mean anything for South Africans in particular?
Yes! To help you pass first time, it’s now an especially good idea to prepare for the updated CFA with the help of a prep provider that understands South African candidates well, and can stress suitable aspects of preparation.
For example, SA candidates don’t always have the foundational knowledge that the CFA requires. Until now, topics in these areas, like Economics and Quantitative Methods, have been fully explicit and an examinable part of the curriculum – a chance to catch up for those who don’t yet know enough. But in the updated curriculum, much of this knowledge is assumed and not examined, yet is still necessary to tackle the more investment-specific tasks.
We suggest that you check out the CFA I, II and III prep courses on Skillfully – they’re offered by experts who are also familiar with the needs of SA candidates. And if you have questions, please write to us at admin@skillfully.co.za.
Image source: DALL-E