Help! I passed all three exams but the Institute denied my charter!

“I got that email that every candidate waits for saying that I passed the Level 3 exam and was able to submit my application for membership to the CFA Institute and receive my charter. I was so happy I spent the next hour calling and emailing friends and family. My happiness was quickly turned to pain and disappointment a couple of months later when my application was denied!”
This is an excerpt from an email I received last year in December and is pretty typical of ones I get each year. The problem is almost always the same, lack of approved work experience.
Before you receive your charter and are approved for Institute membership, you must:

  • Pass all three exams
  • Have two sponsors fill out the Institute’s sponsorship application, one supervisor and one member of the local CFA society
  • Meet the requirements for 48 months of ‘qualifying’ work experience
  • Pay member dues and sign the Professional Conduct Statement

The requirement for 48 months of ‘qualifying’ work experience catches more candidates than you would think. The Institute fairly narrowly defines ‘qualified’ and will deny your application if your experience does not fit the mold.

‘Qualifying’ Work Experience


Below is the guidance from the Institute on what is considered ‘qualifying’ work experience.

  • Evaluating or applying financial, economic, and/or statistical data as part of the investment decision-making process involving securities or similar investments (e.g., publicly traded and privately placed stocks, bonds, and mortgages and their derivatives; commodity-based derivatives and mutual funds; and other investment assets, such as real estate and commodities, if these are held as part of a diversified, securities-oriented investment portfolio).
  • Engaged in responsibilities and/or producing work or work product that informs or adds value to those decisions.
  • Supervising, directly or indirectly, persons who practice these activities.
  • Teaching such activities.

The problem is that the definition provided is fairly broad while the actual criteria used in judging applications is more narrow.
In fact, my first application for membership in 2011 was denied for lack of experience. I was denied credit for my three years of work as a financial analyst since my role in the investment decision-making process was not clear.

Follow the Learning Outcome Statements


First, if you are a level one or level two candidate then you’re in luck and still have a few years to get the experience you need. If you are working in a front-office position and you’re job is directly involved in the decision-making process, you’re also in luck and shouldn’t have a problem.
If you do receive that disappointing letter, you can always provide more detail on your job duties. Focus on the learning outcome statements, especially those in the level 3 exam, and how they fit with your job duties. Every company makes investments of resources in projects and most personnel help in the decision-making process in some way. You just have to find your place in the process. After providing more detail on my work experience, including a rewrite of duties more closely related to the exam LOS, I was approved for membership and received my charter.
If you are not approved for membership even after re-applying, it’s not the end of the world. You will be given affiliate member status and will enjoy all the benefits of Institute membership but will not be able to vote. Leverage your ‘charter pending’ status into a job where your duties directly affect the decision-making process and reapply when you meet the 48 months requirement.
‘til next time, countin’ the days to start the 2018 study season
Joseph Hogue, CFA

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