Understanding the Shift: Why CFA Level III is Moving to Specialized Pathways in 2025

The CFA Institute is changing its Level III curriculum to better align with the diverse career goals of finance professionals. Traditionally, the CFA Program focused on preparing buy-side and sell-side equity and credit analysts to become portfolio managers and Chief Investment Officers. However, the finance landscape has changed significantly, with new opportunities emerging beyond traditional roles.

The Evolving Buy-Side Landscape

The buy-side has expanded beyond managing mutual funds and public market investments. Today, finance professionals are exploring diverse roles that reflect the changing dynamics of the industry. A notable shift is the rise of Private Markets, with the alternatives market expected to grow from $14 trillion to $23 trillion by 2026, approaching half the market cap of US equities. As interest rates rise, private credit is experiencing a “golden age,” broadening its focus beyond simple buy-outs.

For junior professionals, the role of an Investment Associate at a General Partner firm has become highly desirable and well-compensated. Rooted in mergers and acquisitions (M&A) and deal-making, private markets emphasize transaction workflows over traditional investing roles.

The Growth of Private Wealth Management

The Private Wealth industry has also seen significant growth as global wealth outpaces global output. Between 2000 and 2020, global investible assets surged from $160 trillion (4x GDP) to $510 trillion (6x GDP). Liquid assets, currently at $130 trillion, are projected to grow to $230 trillion by 2030, doubling Wealth Management industry revenues. Once considered a niche, this sector is now viewed as the future of finance, with more professionals entering the field.

Adapting the CFA Program to New Realities

In response to these industry changes, the CFA Program is adapting. About half of discretionary portfolio managers are CFA Charterholders, but many Charterholders now work in Private Markets and Private Wealth. This shift has revealed gaps in the curriculum, prompting the CFA Institute to introduce specialized pathways within Level III to better prepare candidates for these expanding segments.

Three Specialized Pathways

1. Portfolio Management: Focuses on constructing, managing, optimizing, and measuring portfolios of public market equity, fixed income, and derivative securities.
2. Private Markets: Covers private market investing from the perspective of General Partners, including deal sourcing, due diligence, and exit strategies.
3. Private Wealth: Provides a global perspective on serving high-net-worth clients, covering the lifecycle from wealth generation to wealth transfer.

Each pathway includes a common core curriculum essential for all candidates, covering asset allocation, portfolio construction, performance measurement, derivatives and risk management, and ethics. This core content is supplemented by specialized courses tailored to each career path.

Sharpening Your Competitive Edge

Choosing a specialized pathway aligned with your career aspirations offers several benefits:

• Career Discovery: Evaluate your interest and suitability for a specific role.
• Mastering the Lingo: Gain essential knowledge to communicate effectively in your field.
• Interview Advantage: Use your specialized knowledge as a talking point with prospective employers.
• Workflow Mastery: Understand how different steps in the workflow connect and the ultimate goals of your role.
• Credentialing: Passing a challenging exam specific to your desired role benefits your clients and employers.

After completing Level II of the CFA Program, candidates should have a clear sense of their career interests. Those aspiring to become Portfolio Managers, Investment Associates at General Partner firms, or Wealth Managers for high-net-worth individuals can select the pathway that best aligns with their goals, enhancing their expertise and competitive edge in the industry.