If you’re considering a career as a financial analyst, or are already working as one, having a professional finance certification can significantly increase your earning power, reputation, and ability to deliver high-quality financial analysis. This guide will walk you through each of the top finance certifications and designations for any professional who is looking to advance their career as a certified financial analyst.
List of the Top Finance Certifications:
Chartered Financial Analyst (CFA) certification
Certified Public Accountant (CPA) certification
Chartered Alternative Investment Analyst (CAIA) designation
The CFA designation is highly sought after by finance professionals around the world. It consists of three levels and takes an average of about 4 years to complete all 3 levels. It is widely regarded as one of the top finance certifications.
The main focus of this finance certification is on portfolio management and investment analysis. The main exam topics include ethical and professional standards, quantitative methods, economics, financial reporting and analysis, corporate finance, portfolio management, equity, fixed income, derivatives, and alternative investments.
The designation typically costs between $4,000 and $5,000, depending on whether or not you have to rewrite any exams and how early (or late) you register for your exams. The pass rate to obtain the full certification program (all 3 levels) is below 20%.
Highly regarded and internationally recognized as one of the most challenging financial certifications. It is a requirement for many jobs in asset management and equity research. Completing this designation demonstrates a certain level of intelligence and a strong work ethic (it’s a good filter for employers to use in finding top employees).
This designation stands out from other finance certifications because the pass rate is so low and the amount of material covered is so vast. It may be an expensive goal that you never actually achieve. The curriculum is heavily focused on portfolio management, which may not be relevant for many career paths in corporate finance. Additionally, it is mostly theoretical and doesn’t use applications such as Excel.
Certified Public Accountant (CPA) Certification
Many finance professionals choose to have an accounting designation instead of a finance certification. CPA is the gold standard in the accounting world and also plays really well in a finance career path. The CPA curriculum consists of auditing and attestation, business environment and concepts, financial accounting and reporting, and regulation.
The total cost of a CPA certification (start to finish) is about $3,000 and is typically covered by the student’s employer. The pass rate per exam varies, but for a first attempt is about 50%.
If you want a career in accounting, then this certification is essentially a “must-have”. If you want a career in finance, it can be a great differentiator and excellent for anyone who wants to ultimately have the CFO’s job.
CPA only has a minor focus on corporate finance and thus is more suitable just for accounting jobs. Additionally, the journey to complete the accreditation can be a long one.
Chartered Alternative Investment Analyst (CAIA) Designation
The CAIA certification is focused on alternative investments and geared toward professionals in the asset management and hedge fund industries. The main topics covered in the CAIA are ethics, hedge funds, private equity, real assets, structured products, asset allocation, and risk management. CAIA is one of the top finance certifications.
The cost of the CAIA finance certification is about $3,000 (in total) and the program consists of two levels. The pass rate is about 70%.
The CAIA program is great for niche areas of finance, such as managing alternative investments (i.e. private equity, real assets, and hedge funds). It only takes 12-18 months on average to complete.
Since it’s so focused, it is not as versatile as broader designations or an MBA.
Certified Financial Planner (CFP) Certification
Earning a CFP designation can be a great path for anyone looking at a career in investment or wealth management. As the name implies, it’s focused on financial planning, which is the retail or high net worth segment of investment management. CFP is one of the top finance certifications for anyone who wants to manage high net worth clients.
CFP® is one of the finance accreditations that represents great value, as it usually costs about $2,000 but can be higher or lower depending on how many course materials you purchase. The pass rate is about 67%.
It’s good value and a great differentiator for retail banking, private banking, and wealth management careers.
The FRM certification is designed for professionals pursuing careers as risk officers, risk analysts, and other positions in risk management. The cost of the designation is about $1,500 and takes approximately a year to complete. The pass rate is approximately 50% for the FRM designation.
FRM is a good path if you want to have a very specific career in risk management and differentiate yourself. Compared to the above finance certifications, FRM is one of the most niche and targeted certifications. It’s very cost-effective and time-efficient as well.
The FRM designation is newer, and thus less globally recognized than designations that have been around longer. It’s less portable to other areas of finance outside of risk management.
A new and increasingly popular option for corporate finance professionals is to obtain a financial modeling certification from an institute such as CFI. Course topics range from how to build a financial model to advanced valuation techniques and sensitivity analysis, all using practical applications in Excel. The full Financial Modeling & Valuation Analyst Program (FMVA)® at CFI is an affordable investment, starting at $497, and comes with over 24 courses and over 100 hours of video instruction. The pass rate is approximately 70% for the FMVA™ test.
The most practical analyst skills gained from this certification include: