Should you take the CFA qualifications without a background in finance?

I am a CFA charterholder. And I did it with no previous financial background.

I passed my Level 3 and became a CFA charterholder in 2011. I didn’t know the first thing about finance when I first registered, so I’m living proof that you can take and pass the CFA exams without a financial background.

Here are a few strong reasons why a finance background shouldn’t factor into your decision to take up the CFA exams.

A finance background doesn’t necessarily increase your pass chances.

I run a website called 300Hours. We do a lot of candidate surveys. One of the most surprising things I learned from that was through post-exam surveys, where we matched passing and failing candidates with various traits. 

In a survey of more than 50,000 candidates across 5 years, we've found that andidates already working in the finance industry do report a significantly higher pass rate. However, having an educational background in finance doesn’t seem to do much for your CFA pass chances. In some cases, the demographic with no financial background even outscored the demographic with financial education.

What does this mean? Don’t feel like the lack of a financial education disadvantages you from taking the CFA exams. Committing the right amount of time and discipline to preparing for the exams is the most important thing if you don't want to fail. 

A finance background is not required to register and pass all 3 CFA levels

To enrol in the CFA Program and take the exams, you need to meet one of the following criteria:

1. Have a bachelor’s degree from a college/university or equivalent. The degree does not need to be finance-related.

2. Be a final-year student when you enrol for Level 1. You’ll need to have completed your education by the time you register for Level 2.

3. Have a combination of four years (48 months) of full-time work experience and/or college/university education on the date of registering for the Level 1 exam. Work and education have to be full-time, but work does NOT need to be investment or finance-related.

The criteria stipulate that candidates should have received a higher education or have 4 years’ work experience, but none of this needs to be finance-related. So you don't need a finance background to take the exams.

The CFA charter helps you especially if you DON’T have a finance background

Even if you aren’t in finance, there are many ways the CFA charter could benefit you - sometimes even more so. 

For example, your personal finance knowledge will be boosted by the CFA exams. If you’re a professional or fresh grad that doesn’t have a clue about finance, completing the CFA exams is probably the best way to power-up your financial knowledge. I’m always appreciative of the knowledge and confidence I gained from the CFA exams when managing my personal investments.

It helps too that CFA charterholders outside of finance are more rare. For this reason, they can be more prized. If you have a numbers, analysis or finance aspect to your role, having a CFA charter can really boost your finance credentials. Bankers with CFA charters may be a dime a dozen, but a software engineer with a CFA charter could be highly sought-after for CFO roles in startups

However, to move from simply having passed the CFA exams to becoming a (*drumroll*) CFA charterholder, you do need to have 4 years of work experience. This experience doesn’t strictly need to be in the finance industry either - as long as you’re contributing to investment or finance decisions at work, you should be able to include that in your application.

However, CFA candidates with zero financial background are in the minority

CFA candidates, however, do usually have some kind of financial background. Our research also shows that only 12% of CFA L1 candidates have no financial background at all, and this number dwindles to just 2-3% in CFA L3.

This could easily be just correlation, as you’re likely to take up the CFA exam if you’re involved in the finance industry in the first place.

Don’t go it alone. Get help and advice.

If you’re taking the CFA exams and you have no financial background, there’s zero reason to believe you’re somehow disadvantaged. But get help and advice from people who’ve done the CFA exams already.

I started 300Hours specifically for that - to help candidates prepare and pass the CFA exams.

Zee Tan has been a CFA charterholder since 2011. He runs 300Hours, a free online help hub for CFA candidates.

Photo by Tim-Oliver Metz on Unsplash