Posted on 06-12-24 at 7:07 pm
The 2025 CFA® Program Level III exam is different from the earlier Level III exams. For the 2025 exam, the CFA Institute has introduced specialized pathways – two new versions, Private Wealth and Private Markets – and the traditional Portfolio Management path. The three versions each have a ‘common core’ of curriculum at Level III, supplemented by specialized content for each Pathway. You can select a path that teaches content more directly related to your interests and aspirations.
Structure of Level III Specialized Pathways: You can choose one of three specialized pathway options at registration. Your study materials provided will thus relate to the selected Pathway. Pathways cannot be changed once registration is completed.
Level III exam topic weight will have 65-70% related to the common core, while the remaining 30-35% will relate to the selected Pathway. Questions related to each Pathway chosen will be a mix of item-set and essay questions, just as for the common core.
Practical Skills Module: There will be a single, mandatory 10-15 hour Practical Skills Module for Level III starting in this same window. It will focus on Portfolio Construction, which will not be graded, although completion will need to be documented.
CFA Charter & Pathways: There will be no difference in the CFA® charter granted upon passing Level III.
Before deciding on a Specialized Pathway, you should know each Pathway’s content.
This material offers a range of universal principles for serving High Net Worth clients (worth US$5M+). It encompasses a young adult being onboarded and generating wealth, a private wealth manager, and wealth transfer from the client. It builds on simple investment management and financial planning to cover brand new areas such as family management, philanthropy, and serving star athletes.
In addition to teaching private investments and structures, as well as General Partner (GP) and Limited Partner (LP) perspectives, this Pathway offers specializations in private debt, private equity, private special situations, private real estate, and infrastructure. You can upskill your valuation concepts and other competencies related to all four asset class domains. The material is current and engaging because it provides recent examples such as Elon Musk’s acquisition of Twitter, Facebook’s acquisition of WhatsApp, Blackstone REIT, events at Silicon Valley Bank, Gabon’s debt-for-nature swap, and several high profile LBOs such as Thyssen elevators in 2020.
This material is familiar to those who registered for the 2023 or 2024 exam. It contains the more advanced, public markets focused portfolio management content of the pre-existing CFA Program.
After passing Level II of the CFA Program, you should have an idea of which career path on the buy side interests you the most. If you want to move from an analyst position or be promoted to PM, you may choose Portfolio Management. If you are an analyst or associate banker and want a role as an Investment Associate at a General Partner firm, you may choose Private Markets. If you are a Junior Wealth/Relationship Manager or an Investment Advisor and want to move from the mass market to serve High-Net-Worth individuals, you may select the Private Wealth pathway.
Here is what you should know about the skills you are acquiring from the CFA Program Exams.
The CFA Program has traditionally targeted aspiring analysts on the buy side who one day will be Portfolio Managers and Chief Investment Officers.
However, private markets have grown, with the alternatives market forecasted to grow from $14T today to $23T by 2026 (Preqin). As private markets grow, job opportunities grow, increasing the need for a well skilled workforce. A highly compensated opportunity for the investment management workforce is an Investment Associate position at a General Partner firm. In the world of M&A and deal-making, private markets require a transaction workflow role to be filled by the Private Markets Specialists.
The private wealth industry has also grown as global wealth has grown faster than global output. According to the CFA Institute, between 2000 and 2020, total investible assets globally rose from $160T (4x GDP) to $510T (6x GDP). Liquid assets make up more than 1/4th of these assets, forecasted to grow to $230T by 2030 (Bain), doubling wealth management industry revenues. Clearly, the number of people hired into the industry is increasing.
While the Portfolio Manager role has some overlap with the private markets and private wealth job roles, it is important to prepare for either of these two new job roles for promotion or lateral hiring.
The three ‘specialized pathways’ of Level III, one for each job role, are similar to the specializations offered in most Master’s programs aimed at sharpening your competitive edge.
There are several benefits of choosing a Pathway given by the CFA Institute. Here are some:
Note: The source of the information for this IFT blog is the CFA Institute website. Please refer to this link
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