Which course to pursue – CA or CFA or both as a career option? This has been a big debate among the college students, especially who want to make a career in the financial world. Both the courses are the best in their respective industry and is highly respected and appreciated.
The biggest difference is that CA is entirely focused on the Indian account system, Indian laws related to taxation and companies, whereas CFA is a global course which is recognized in more than 150+ countries and follows the US GAAP and the IFRS.
Who is this course for?
Firstly giving a glimpse into both the courses from a broad view. CFA is the most generic international course in finance, as it covers every topic of finance in absolute detail and it is the most highly recognized and respected course in the field of finance throughout the world.
CFA is organized by the CFA Institute which was founded in the year 1947 and is headquartered in Virginia U.S.A. CFA is best suited for students who want to build their career in
- Equity Research
- Investment Banking
- Mergers & Acquisitions
- Private Equity
- Corporate Finance
- Portfolio Management
- Financial Advisory
Coming to CA, it is an India specific course that is organized by the ICAI which was a body founded in the year 1949. CA focuses more on accounting, company laws, taxation and auditing. If you want to build your career in these areas then perusing CA is the right choice. Some career roles as a CA:
- Audit team
- Financial Accounting
- Tax Consultant
- Financial Advisory
- Banking Division
- Company law and regulatory team
Difference between CFA and CA
|Eligibility||Must be in the final year or have a bachelor degree/ 4 years of work experience in any field||Qualify CPT and (10+2) Aggregate of 55% in graduation/under graduation|
|Exam Details||Level – I 240 MCQ Questions Exams held in June & December Level – 2 120 MCQ Questions Exams held only in June Level – 3 10 essay type questions and 60 MCQ Questions Exams held only in June||CPT – This is the 1st step and has 2 sessions of 100 marks each. IPCC – This has 2 groups in it. 1st group has four subjects of 100 marks each and 2nd group has 3 subjects of 100 marks each. CA Final- 8 papers of 100 marks each.|
|Passing Rates||Level – I 42% Level – 2 45% Level – 3 52%||CPT- 26% IPCC- 15% CA Final- 21%|
|Time taken||2-3 Years||5 years|
|Fees||$450 Registration Fees (Valid Throughout) $700/$1,000/$1,350 for each level depending on the time of registration||CPT –INR 6,700 IPCC- INR 9,000 Articleship Registration- 2,000 CA Final- 22,000|
From the cost perspective as we saw above clearly CFA is much more expensive as compared to CA.
Although one important part to emphasize here is that when opting for CA, after completing your IPCC exams you are required by compulsion to attain a three year articleship under a CA for which you are paid about 5-7K a month, whereas after completing your CFA Level-1 only you can choose to work as you get roles even after just completing CFA Level-1 with an average pay of 20-30K a month.
So, CFA is definitely a more expensive course than CA but if seen more from an opportunity cost point it is CA which ultimately turns out to be the more expensive exam as you have to compromise 3 years of pay while doing articleship and also the recognition is there only after becoming CA, but recognition starts from Level-1 only in case of CFA.
Which is more Difficult CFA or CA?
For CA you have to remember a lot of topics especially in Law and Tax which requires a lot of mugging up. For CFA it is more of a conceptual and analytical based course, so if you get the concepts and understandings you can clear the exam there is no mugging up required. On a broad level it is CA that is considered to be more difficult of the two exams.
CFA and CA Subjects
In total CFA has 10 subjects for Level 1 & 2and 7 subjects for Level 3
CA has 4 subjects for CPT, 8 subjects for IPCC, 8 subjects in CA final divided into 2 groups of 4 subjects each.
- Ethical and Professional Standards (Level 1,2,3)
- Quantitative Methods (Level 1,2)
- Economics (Level 1,2,3)
- Financial Reporting and Analysis (Level 1,2)
- Corporate Finance (Level 1,2)
- Equity Investments (Level 1,2,3)
- Fixed Income (Level 1,2,3)
- Derivatives (Level 1,2,3)
- Portfolio Management (Level 1,2,3)
- Alternative Investments (Level 1,2,3)
CPT (Common Proficiency Test)
- Fundamentals of Accounting
- Business Economics and Commercial Knowledge
- Business Mathematics, Statistics, and Logical Reasoning
- Business Laws and Business Correspondence and Reporting
IPCC (Integrated Professional Competence Course)
- Cost Accounting and Financial Management
- Advanced Accounting
- Auditing and Assurance
- Business Laws, Ethics and Communication
- Information Technology and Strategic Management
- Corporate and other Laws
CA Final Group 1
- Financial Reporting
- Strategic Financial Management
- Advanced Auditing and Professional Ethics
- Corporate and Economic Laws
CA Final Group 2
- Strategic cost management and performance evaluation
- Direct Tax Laws and International Taxation
- Indirect Tax Laws
Top few firms that recruit CFA and CA
- Deutsche bank
- Citi Group
- Goldman Sachs
- J.P. Morgan Chase
- Morgan Stanley
- HDFC Bank
- ICICI Bank
- SBI Bank
- Black Rock
- Mirae Asset Management
- Morning Star
- Care Ratings
- And many more
Average CFA Salary Vs CA Salary in India
|After CFA Level- 1||(3- 4+ Lakhs P.A.)|
|After CFA Level- 2||(6- 10+ Lakhs P.A.)|
|After CFA Level- 3||(12+ Lakhs P.A.)|
|After CFA Charter||(18+ Lakhs P.A.)|
An Average CA makes 7.36 Lakhs P.A. according to ICAI reports.
Highest packages is for CFA specializing in Investment Banking Industry with a decent amount of work experience, here the salary is north of USD $100,000 plus bonuses.
Benefits of doing CFA after CA
Pursuing CFA after CA is one of the best decisions one can make to further outgrow their careers.
Let’s prove this by numbers as the total asset management industry in the world is at around USD $70 Trillion. For those who don’t understand this number let me tell the current GDP of India which is USD $3 Trillion.
Just imagine the market share and opportunity size here. So if you plan to do CFA along with your CA, you possess skills which very few people do and this automatically gives you an edge over the others.
Also financial management and Investments have only started in India and it is going to grow at more than 16% over the next 10- 15 years of which you can be a part by pursuing both CFA and CA.
Be it mutual funds, venture capital, private equity Funds, insurance companies, hedge funds all these sectors are going to create enormous amounts of job opportunities as well as from an individual portfolio management perspective.
Also the pay in these industries is the best as compared to any other field in any industry, so going forward there is a huge potential in the Indian financial services sector which can be tapped into.
Hence, by pursuing both the courses you have knowledge about company laws, company evaluation, taxation, various asset classes, how the financial services sector works, etc. This will be an asset that will have no monetary value going forward specially in the Indian financial services industry.