The number of candidates taking CFA exams has declined again, according to the latest figures. At its peak in 2019, over 270.000 individuals registered, but the most recent figure stalled at 163.000. As is often the case, there are likely multiple explanations for this trend.
The CFA Institute itself attributes the slowdown to reduced growth from China and India, but this cannot fully explain the decline. While the COVID-19 pandemic initially caused a dip, that was five years ago, and the downward trend continues.
The most likely explanation is the phenomenon of certificate inflation. The number of CFA charterholders has grown significantly in recent years. As more people graduate at the same level, the relative value of the qualification diminishes. Additionally, students increasingly present extracurricular activities on their CVs to differentiate themselves further.
This inflation means more effort is required to achieve the same results. For instance, no one becomes a portfolio manager solely by earning a CFA certificate. Fewer companies now require the CFA qualification for such roles, preferring candidates with relevant work experience or skills like Python coding. Analysts come in all shapes and sizes, and data analysts are particularly in demand. At best, the CFA certificate now acts as a screening filter in the recruitment process.
The rapid growth of passive investing has also reduced the relevance of a comprehensive CFA education. You don’t need a CFA to buy QQQ. Passive investing can be seen as a technologically disruptive innovation, sidelining CFA holders. Meanwhile, artificial intelligence is just getting started.
The CFA curriculum covers subjects like accounting, economics, management, and finance, delving into numerous formulas. Yet, it never truly goes into depth; instead, it’s a lot of breadth. While it appears to offer specialisation, it doesn’t. In many ways, it’s an ideal domain for tools like ChatGPT.
MiFID II has also played a role. Since its introduction, asset managers must pay separately for the two primary services provided by brokers: trade execution and investment research. Previously, research costs were implicitly bundled into transaction fees paid to brokers.
This shift has caused a decline in public equity research, especially for smaller funds. Today, an increasing number of publicly listed companies are either not covered or covered by only one analyst. Sometimes, reduced demand for the CFA certificate is simply the result of fewer job opportunities in the field.
The CFA program itself has its shortcomings. A notable issue is the large number of inexperienced students participating. What’s overlooked is that education thrives on peer learning and practical experience. MBA programs, for instance, require at least two years of full-time work experience. The CFA program, by contrast, often attracts back-office workers aiming to move to the front office or technical professionals seeking a crash course in finance. While the exams are challenging, they often fail to align well with real-world practices.
The ongoing cost of certifications like CFA, PMP, CEng, or FImechE has also become an unnecessary burden. These credentials often lose their practical relevance over time and evolve into revenue-generating industries rather than consistently adding value to professionals. Once someone has proven their qualifications and expertise, why should they have to pay annually to continue ‘proving’ it?
Profit does not always equal value. The CFA Institute’s efforts to expand the curriculum to include ESG, climate change, private markets, wealth management, and even cryptocurrencies seem driven more by profit motives than by adding genuine value.
Lastly, during a visit to one of the world’s largest wealth managers, I encountered an interesting perspective. A particular investment fund being on this wealth manager’s “preferred list” made it easier for other asset managers to adopt it as well. While reviewing this wealth manager’s extensive due diligence forms, I noticed a section on CFA qualifications.
When I asked whether they required every employee at such a fund to hold a CFA certificate, the response was surprising. They actually used this section as a “red flag.” If a fund had too many CFA charterholders, it was rejected. The concern was groupthink, herd mentality, and a lack of creativity—traits perhaps suitable for accountants but not for investors. In an organisation that still presents CAPM as gospel, critical self-reflection is much needed. Yet within the CFA framework, there’s often only one acceptable answer: the CFA answer.
Han Dieperink is the Chief Investment Officer at Auréus Wealth Management. He previously served as CIO at Rabobank and Schretlen & Co.