If data is to be believed, almost 200,000 CFA aspirants from various countries and colleges appear for CFA exams. Of which, more than 50% badly fail. Around 20% of students don’t turn up for the exams – just out of its horror!
Back in June 2015, only about 40% CFA aspirants passed Level I of CFA® Program exam and only 45% got through Level II. Level III of the program exam happens to be the only exam wherein only a handful of candidates pass. A recorded 52% students cleared level III in June 2016.
The above stats clearly show that many candidates lose their chance to pass at the first attempt. So it can be concluded that the exams are very difficult to crack. Still, if you manage to pass out, it’s like you’ve conquered it all! Here, let’s see what makes the exams that tough and uneasy to get through.
Reasons why you fail in the exams
- When you haven’t studied for a minimum of 300 hours for each level
- When you don’t have a proper strategic approach to study.
- When you only refer to study materials provided by the CFA Institute
- When you have hobbies, job, or family life out of CFA studies
- When you’re not paying enough attention to most difficult topics
- When you don’t have a systematic study plan
- When you’ve challenging work life and trying to compensate by studying for just 6 months
- When you’ve not practised enough with timed mock tests
- When you’re impatient and give up on things easily
- When you’re leading an unhealthy life with sleep deprivation and starvation
Strong disciplinary routine along with a substantial amount of studying — are the key factors to pass CFA certification exams. The three levels of the exams can be taken once every year in June. However, Level I can be taken in December too.
There are no limits for candidates to appear for the exams. But each exam does require you to study an additional 300 hours on an average. The excess studying time is also a factor that keeps most candidates from continuing with the the program after losing out on any of the levels.
In order to become a charter, every candidate is expected to pass all three levels. Plus, having four years’ qualified work experience in investment decision banking is another criterion.
What are the exam topics?
CFA exams usually run for 6 hours. The topics range from ethics, professional standards, and economics, to financial reporting and analysis, quantitative methods and quantitative methods. Wealth planning, derivatives, alternative investments, equity investments, and corporate finance are other important topics too.
The CFA Institute does provide more than the required study material to prepare for the exams. However, most candidates prefer to study out of the study material. Most common sources include Schweser study books and prep materials. Online quizzes, classes, and videos are also helpful in studying for it.
So an aspirant can rely on the above variety of study materials and take advantage to have more chances to get through.
How are the pass rates for the exams?
According to the CFA Institute, the historical passage rates for both Levels I and Level II are between 40% and 50%. But Level III has a sharply greater pass rate.
As per Bloomberg, June 2018 exams saw around 43% candidates passing Level I and 45% clearing Level II. An impressive of 54% got through Level III, based on June 2017 results. It can also be seen that between 10% and 20% of candidates who had enrolled for the exam, never really took the test.
What are the exam questions?
The test material is nothing but a very difficult set of tricky questions. They’ve been specifically designed to test candidates in every way possible. For that, students should take as many practice tests needed to get the feel for the type of questions to expect.
While Level I consists of 240 multiple-choice questions, Level II is a 20 item-set question. Level III is a combination of short essays and item-set questions.
The multiple choice questions in Level I has three possible answers, which students need to read and mark carefully. The answers may also include alternatives like “none of the above” and “all of the above”. Another factor of anxiety for students is the time constraint during the exams.
What did you learn?
From the above, we learn that it is surely very difficult to clear the exams, especially Level I. Besides, we also conclude that students can easily get through when they’ve prepared well enough for tests.
Adopting ways like studying for at least 300 hours, referring prep materials, taking mock tests, strategizing study plan, and so on. Successful completion of the entire CFA certification means a rewarding career ahead. Wherein, the job roles are recognized by organizations within the finance domain. Charterholders can well enhance their careers in investment, banking, and other financial services.