Who Should Take Caia Exam?
The CFA Program provides you with expertise and real-world skills in investment analysis that has become the gold standard in the financial and investment industry. The CFA programme covers a wide range of issues related to investment portfolio management and financial analysis of equities, bonds and derivatives, as well as generalising knowledge in other financial areas. A typical career pathway for a CFA investor includes portfolio management, buy-side research, investment banking, private equity and corporate finance.
The Chartered Alternative Investment Analysts (CAIA) Association ( trade association for the global alternative investment industry) announced recently that more candidates have passed its recent Level II exam than at any time in its history and it welcomes its largest new class of charter owners. CAA and the CFA Institute share a mission of excellence in investment education that reinforces the overlap between their respective membership bases. The Chartered Alternative Investment Analyst (CAA) is the professional name for investment professionals that the association offers.
Following completion of the CAIA Program, a candidate must pass the Level II test within 3 years and pass all Level I tests to qualify for the designation of Certified Alternative Investment Analyst. Passing the CAIA Level 1 and Level 2 exams together with a bachelor’s degree and at least a year of relevant professional experience is sufficient to obtain a CAIA title. Requirements for further training are also required to obtain the status of a chartered alternative investment analyst.
The CFA Institute reports a total of an average of 300 hours for each stage and 900 hours for all three, which has an average of $3,450 for CFA institutes. In order to pass the CAIA Level 1 and Level 2 examinations and obtain the CAIA title, you must have at least four years of professional experience. For CFA and CAIA-qualified CFA programs, candidates must have a bachelor’s or equivalent degree in the last year of their studies (according to update) to qualify for Level II, with at least four years of professional experience.
Applicants must have a Bachelor’s degree from an accredited university and be in the last year of the program to take the CFA exam. A CFA certificate is awarded to candidates who have four years of professional experience and passed the exam. Candidate who want to take the CAIA exam must have at least a year of professional experience and a bachelor’s degree.
Due to the difficulty of the exam, most professionals need three years or more to acquire the CFA designation. After passing all three tests and completing the required work experience to become a CFA, a candidate may use this designation. Once a candidate passes the Level 3 exam, he must gain at least four full years of relevant professional experience before he can charter an issue.
In recognition of this early overlap, CAIA last year declared that CFA charter owners who have no history of failing the CCAI exam can move up to CAIA Level II. As there are only two levels, the CAA will be the means by which CFA charter owners can acquire CAIA accreditation in a single test.
To understand what Kelly is saying, you need to look at the reasons why these two different accreditations exist. In short, CFA and CAIA are difficult insofar as they are comparable to a master’s degree.
In this background, it is important to note that the CFA exam has 3 levels while the CAIA exam has just 2 levels to pass. The two levels are taken in different exam cycles, which take place in March and September. A strong understanding of financial investment concepts is a prerequisite to pass the CAIAs exam.
The CAIA exam preparation courses offered by Kaplan and Schweser are expensive and range from $499 to $1,129 for CAIA Level I, but prices are competitive. You have access to all CAA exam preparation materials from enrolment to exam taking. In addition, they are the only providers we have seen publishing a typical pass rate in the range of 52-65% (to put that into perspective, the CFA pass rate is 43-47%).
If, of course, you are confused as to whether to get the CFA exam or the CAIA certification, I think you should read this article before making a decision. It is important to choose between CFA and CAIA because they are very similar and I find that many clients are professionals who are determined to establish themselves in the area of investment and financial analysis. A CFA designation may be useful if you plan to work in a traditional investment area or in more specific alternative investment segments.
The CAIA designation can be a great addition or complement to the CFA designation if you are planning to work for an alternative asset manager such as Blackstone, Macquarie or LaSalle, a private equity firm or a hedge fund such as Bridgewater Associates or The Carlyle Group. The terms CFA and CAIA may seem similar at first glance, but they are both aimed at financial professionals. For one thing, the various job titles in finance have no distinctive abbreviations, and CAIA differs from CFIUS “Charter Financial Analyst (R) or CFA (R) programs.
Although these different financial professional titles share some similarities, they differ in many aspects, such as their knowledge base and career hierarchy. To benefit as a budding financial professional, there is a crash course on the differences and similarities between titles and the pros and cons of these careers.
Although there are no exact figures for CFA programs or MBA programs, we can make some assumptions that apply to many prospective professionals. Our first assumption is that it takes an average of four exams to complete all three stages of a CFA program.
Since December 2003, three stages of the CFA programme have been carried out each year. Before that time, all levels of CFA exams that could be taken every year were available.
CFA candidates can take the Level I exam in December, the Level II exam June following and the Level III exam a year later – but it will take two years – assuming study begins in December for the Level I exam.
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