A novel Green's function-free characteristic modes formulation is introduced in this work. The desired impedance or admittance matrix is obtained utilizing and appropriately modifying the versatile finite element method. For this purpose, the generalized eigenvalue problem of the electric or magnetic field vector wave equation is formulated. In the case of the electric field wave equation, using the Schur complement, the system is reformulated and expressed only in terms of the tangential electric field over the radiating apertures, retaining the equivalent magnetic currents. Similarly, in the case of the magnetic field wave equation, the electric current density on radiating metallic surfaces is isolated using the Schur complement. In both cases, the obtained matrix is split into its real and imaginary part to yield the characteristic modes eigenvalue problem. Key advantage of the proposed formulation is that it does not require the evaluation of Green's function, thereby the study of any arbitrarily shaped, multilayered geometry loaded with anisotropic and inhomogeneous materials is feasible. To prove the validity of the proposed methodology various classical structures, with both homogeneous, and inhomogeneous and anisotropic materials, published in the bibliography are studied. Both the eigenvalues and eigenvectors compared with the published results show good agreement.