Tips on passing CFA Level 1 with ease

If you are standing in line to get a foot into the investment industry, a CFA course can help you take a VIP shortcut straight to the entrance. The Chartered Financial Analyst program is an elite qualification recognised by some of the largest financial firms in the world. Multi-national corporations such as JP Morgan Chase, Citigroup, PWC and HSBC are known to hire employees with a CFA certification. 

With over 170,000 charterholders worldwide on the last count, the course gets more and more popular every year. You might want to add yourself to this number if you are actively pursuing a career in investment services. The CFA offers a solid foundation course in finance, teaching students about wealth planning, portfolio management and other industry-specific topics. 

There are three levels to clear in the course. The first step to getting your charter holder is passing CFA level 1, which, for some reason, seems to trigger fear in students attempting to study for it. Many have heard that this is a hard level to clear from past students. Others are intimidated by the syllabus. Everyone seems to be thinking the same question: 

Is CFA level 1 hard to pass?”

The answer depends on you. The proper preparation, study plan and clear thinking can help you get through level 1 on the first attempt. Let’s find out more about it. 

About CFA Level 1

As one of the most prestigious finance qualifications, the CFA is accepted and revered in over 100 countries. The program offers rigorous and in-depth training in the various fields of investing, enabling students to become financially proficient in several financial job positions. Here are some relevant points about CFA Level 1.

The syllabus

  • The same ten subjects are present at each level
  • However, they carry different weights across the three levels
  • CFA Level 1 subject weightage is as follows: 
    • Professional and ethical standards — 15-20 per cent 
    • Financial statement analysis — 13-17 per cent
    • Equity investments — 10-12 per cent
    • Quantitative methods — 8-12 per cent
    • Fixed income — 10-12 per cent
    • Economics — 8-12 per cent
    • Corporate issuers — 8-12 per cent
    • Derivatives — 5-8 per cent
    • Alternative investments — 5-8 per cent
    • Portfolio management — 5-8 per cent

Course requirements 

  • You need to have a bachelor’s degree from a recognised college 
  • Or, you can be a final year student on track to complete your degree within 11 months 
  • You have 4,000 of relevant work experience 
  • A valid passport is essential

Is CFA level 1 hard?

The CFA exams are often called: ‘one of the world’s hardest exams’. 

Many students avoid the course out of fear of failing. So is the program as challenging as reported? Well, yes and no. 

The exams are very tasking. They demand quite a bit from the students and can be laborious. In fact, the CFA level 1 pass rates are between 38 to 50 per cent, depending on the year. But don’t let that statistic freak you out. It accommodates the number of students who skipped the exams due to illnesses, lack of prep or cold feet. The no-shows amount to nearly 10 to 20 per cent of the failure rates. 

It is still up for debate which of the three levels is the toughest. Some say one, while others swear 2 is the worst, and a few insist that level 3 put a few extra greys in their hair.

However, they are not impossible to clear. Think of the exam as your Mount Everest. Even if the route to success seems long-winding and formidable, you will conquer your goal with hard work and grit. 

Tips on passing CFA level 1

1 Study as per the subject weightage 

Each level has a focus on specific subjects. The level 1 exam has a main focus on investment tools, ethics and professional standards, assets classes and portfolio management. If you can’t cover every inch of the vast syllabus, you can concentrate on the topics that matter. 

2 Plan your time efficiently 

The CFA board recommends you study for around 300 hours before giving the exams. 

So plan for a 3-6 month schedule before your exam. Divide up your hours accordingly, but be practical. Don’t expect to study for 5 – 6 hours every day. A fixed number of realistic hours spread across several months can lead to a healthy routine where you will successfully master the material. 

3. Practise as much as you can 

Get your hands on practice papers, mock tests and previous years’ exams and solve as many as possible. The more you work, the better you’ll get when it is time to answer the main paper. 

4. Register with a renowned coaching class 

While it is possible to take on the exam on your own, a qualified coaching institute can make things much easier for you. They help teach the syllabus effectively, break down complex concepts and help you to solve mock exams and practice papers. A coaching class can help you organise yourself and learn better.

5 The concepts are significant in Level 1

The CFA level I exam is focused more on financial concepts and complex principles. To have a complete understanding of the theory, you should get your doubts cleared by an expert or professor. 

How NISM certificates can help you with passing CFA level 1 

In 2006, the Securities and Exchange Board of India (SEBI) created the National Institute of Securities Markets (NISM) to support education in financial services. They offer the expertise and training to improve their skills. The NISM certification helps people find more suitable jobs in the relevant sectors of the industry. So how can they help you with passing CFA level 1? The NSIM has joined the CFA Institute University Affiliation program. Their syllabus now contains around 70 per cent of the chartered financial analyst program, with extra focus on the code of ethics. So students who get the NSIM certificates are well-prepared to attend the CFA level 1 exam. 

Now, here is the part that might interest you. Unlike the CFA, which gives you one certification for clearing all ten topics, NSIM offers certifications in individual subjects. Clear one paper, and you receive a certificate. There is a large overlap in subjects between the two courses. For instance, derivatives are a topic in the CFA Level I as well as the NSIM syllabus. 

Pass the NSIM exam, and you are certain to sail through with flying colours in Level 1. If you study with NSIM, you get the advantage of focusing on one subject at a time, till your revision is perfect. 

It is a great strategy to create an effective study plan for the CFA. Doing all ten subjects together can be overwhelming and stressful. But one topic at a time with NSIM so you fully understand the material and do well in the level 1 exam when the time comes. 

The IMS Proschool CFA program 

A good-quality professional course is the key to passing CFA level 1. IMS Proschool is a nationally renowned institute that offers a high standard of education in the finance sector. Their CFA course is popular as it provides comprehensive training in core finance subjects through innovative teaching. Proschool has a strong philosophy of encouraging students to understand concepts rather than merely memorising the facts. They take the extra effort to help students become proficient so that when they head out into the real world, they go out as finance specialists. 

CFA level 1 details:

  • The faculty consists of experienced, CFA-qualified teachers who help the students master the subjects
  • There is a high emphasis on taking mock tests 
  • Students can attend classroom sessions at a centre closest to them or else learn through online sessions
  • Proschool offers over 2,000 practice papers, online line study material and other resources to help you prepare
  • You get the attention and assistance you need to successfully pass the CFA level 1 exam

Conclusion

Don’t get discouraged by the difficulty of the CFA level 1 exam. Those who claim it is a tough test are not always the best at preparing for it. You need a high level of commitment and determination to help you train. You also require a good plan of action. A reputed coaching class and even the NSIM certificates can help you on your journey to success. The students who pass the exam on the first try are those who study efficiently. If you do the same, you will take your place as part of the CFA level 1 pass rate statistics.

Find out more about the CFA level 1 exam here