What is good for you? CFA® vs. CAShashwat Mahaseth
What is the best certification course in finance? CFA® (Chartered Financial Analyst) or CA (Chartered Accountant)? Which one is the right choice for me? If you are thinking about whether to go for CA or CFA® or both, you have come to the right page. In this article, we will look in detail what CA and CFA® programs are all about, compare the two and deliberate on which course to go for.
CFA® and CA are two of the most recognized finance courses. Whether to go for one or the other depends on the learner’s aptitude and career inclination. While CFA® is geared more towards a career in financial industry CA is more suited for the industry agnostic roles in finance.
What is CFA® Program?
Chartered Financial Analyst® (CFA®) program is a professional credential for finance professionals. The CFA® program is run by CFA® Institute, a global association of investment professionals. It is a non-profit organization that sets the standard for professional excellence in the finance industry,
The CFA® program covers a range financial topics that are needed to succeed in the financial sector. It is one of the most sought-after financial management courses. Following are the CFA® course details:
- The program consists of three exams of progressive difficulty, CFA® Level I, Level II and Level III.
- Each exam takes about one year each to finish
- Focus area for CFA® level I exam: Investment Tools
- Focus area for CFA® level II exam: Asset Valuation
- Focus area for CFA® level III exam: Portfolio Management
- CFA® program also puts significant emphasis on ethics throughout
- After passing all the three levels and acquiring 4 years of relevant experience in finance, one can apply to become a charterholder
The road to becoming a CFA® Charterholder
What is CA?
Chartered Accountant (CA) is a professional designation in finance. It is highly respected and accepted in several countries. Chartered accountants work with the finance department of companies across industries. Their work areas include auditing, taxation, financial management, and general management. The Chartered Accountancy course is regulated in India by The Institute of Chartered Accountants of India (ICAI).
The CA program covers financial topics that enable the individual to handle the finance and accounting department of a company. Following are the CA course details:
- The program consists of 4 stages CPT (Common Proficiency Test), IPCC, Articleship and CA Final.
- Common Proficiency Test(CPT)- This is the first level entrance exam for CA. You are eligible to take the test after you pass 12th grade.
- Integrated Professional Competency Course (IPCC) – This is the second level of the CA course. You can appear for IPCC after clearing CPT or after graduation (with 55%+ marks) through direct entry scheme.
- Articleship – This is practical training for three years after two and a half years, are eligible to sit for the CA Final exam.
- CA Final – As the name suggests, this is the final exam you need to pass to earn your CA degree.
In the US, the equivalent to a CA is the Certified Public Accountant (CPA).
The road to becoming a CA :
CFA® vs. CA
CFA®: For appearing in CFA® Level I exam, you need to be graduate/final year of graduation/ four years of work experience in finance.
CA: To pursue CA, you can start right after passing 12th grade through the foundation route. For graduates with 55%+ marks, they can go through the direct entry route to the intermediate course.
Time taken for completion
CFA®: The three levels of CFA®, Level I, II and III, take one year each. So, A total of three years along with four years of relevant financial full-time work experience. The work experience can be accumulated before, during or after the CFA® exams.
CA: CA has three levels CPT(Common Proficiency Test), IPCC(Integrated Professional Competency Course) and Finals. CPT takes two years, IPCC one year, and Finals one year. So, A total of four years along with the exams. You need three years of articleship training, and only after two and a half years of articleship, you are eligible to apply for CA finals.
CFA®: CFA® is recognized worldwide.
CA: CA conferred by ICAI is primarily recognized in India and the Middle East. However, ICAI has MoUs with the CA professional bodies in Australia, Canada, and England.
CFA®: CFA® Institute charges are around INR 2 lakh (All three levels exams fee + enrolment). Coaching can vary from INR 90,000 to 1.5 INR Lakh for all three levels. Total cost estimate: INR 3-3.5 Lakh.
CA: ICAI charges around INR 50,000 for CA tuition. Coaching costs for the CA exams vary between INR 1 Lakh to INR 2 Lakh. Total cost estimate: INR 2-2.5 Lakh.
Course Focus Area
CFA®: Practical approach to Corporate Finance, Investment Analysis, Portfolio Management with emphasis on ethics at every stage.
CA: Taxation, Auditing, Accounting, Financial Management and Reporting, General Management, etc.
Industries where you can work
CFA®: Primarily financial industry recruits for CFA® charterholders. All the top investment banks and global financial institutions hire CFAs.
CA: The course is not industry-specific, and you can work in any sector. Also, you can set up your practice.
What is good for you CFA® or CA?
The question remains, which one is the best certification courses in finance? Well, the answer to it depends on your interests. If you want to join the financial industry in investment banking, equity research, portfolio management, among many others, then CFA® is the way to go (this CFA® course will help you crack the level 1 exam). In case you find working accounting, auditing, taxation or among other related fields, CA can be the right choice for you. Finally, doing both CFA® and CA is also a choice some professionals make. It is a valuable combination and can give you a jump start, or propel your career in finance.
Interested in CFA®?
If you want to know more about the CFA® course, join the webinar on “How Should You Start Preparing for CFA?” by Mr. Amit Parakh. Mr. Parakh is one of the most qualified global trainers in the CFA® Program space. He has a B-Com from Calcutta University and an MBA from IIM Ahmedabad. He has aced Chartered Accountancy, FRM, CS, CFA® exams all in the first attempt and has mentored thousands of students in their careers in finance.