You’ll need time, commitment, and perseverance to pass each of the Chartered Financial Analyst exam’s three levels, and even really smart and experienced candidates have been known to get snagged. As you probably know, the exam has a low overall pass rate of roughly 40%.
If you aren’t prepared, you’re not likely to make it through. Maximize your chances for passing the CFA exam first time with this advice from some of our in-house experts.
Wiley CFA Exam Review will help you plan out the workload you have ahead of you. The CFA Institute estimates that candidates study an average of 307 hours for each level of the exam. Your first stop should be the Institute’s current dates for the exam.
Of course, the actual amount of prep you need will vary, depending on your previous education and experience: you’ll need to see what your personal needs are. As one commenter on Analyst Forum once put it, “We’re not talking community service here, people learn at various speeds and start at different levels. It’s about quality, not hours put in.”
The website 300 Hours has a good spreadsheet for creating a basic study plan that will ensure you get through all the material you need to before exam day.
As you build your study plan, be sure to include some time for any unexpected curveballs that life may throw your way, and also make sure that you and the rest of your family are prepared to deal with the exam’s impressively huge (but temporary!) time commitment.
And don’t forget to keep track of your progress—all this stuff might come to you slowly at first, and you might hit a plateau or two. Heck, you might even be tempted to pull your eyeballs out once in a while. Keeping a record, whether it’s in Excel, in an app, or even with old-fashioned pen and paper, will help you see just what you’ve accomplished so far, and just how much more you have to go.
Let’s face it: you’re going to have to give this the exam a very high priority in your life if you want to get it done. It’s essential that you have a place where you can study the material effectively. Some candidates have a home office or spare room they can use, or they are able to head back to the office and study in the off-hours. For others, a reasonably calm coffee shop or library may work—someone even found that the 10-hour train ride he had to repeatedly take to Paris and back was perfect for nailing down Fixed Income. Wherever and however you choose to study, make sure it’s a place that lends itself to high-quality, uninterrupted study. If that means locking yourself in your parents’ basement, or becoming a library zombie for few months, then so be it!
Many candidates choose to sign up for live classes. It’s true that such classes make it easier to form study groups and to keep your studying on track, and they can also be a good source for networking. A good teacher can also find ways of making the material easier to digest, and to explain hard concepts succinctly. On the other hand, other students find that self-study or online classes (especially if Peter Olinto is involved) are just as good a solution, especially if classes take a lot of time to get to, or if they already know some of the material. It really depends on your situation—you may want to talk to other current charterholders with situations similar to yours to see how they studied, and whether or not they’d do it the same way again.
By the way: a few exam-takers have even managed to pass with nothing more than the CFA Institute’s own curriculum, but it’s probably not worth the hassle. A good review course will help clarify the curriculum and make it come alive. That said, no course is ever a complete substitute for the curriculum itself.
Studying for this exam isn’t a sprint. There’s just too much information to get through to make it worth trying to pull off a huge cram session in the few weeks right before the test. The rule of thumb is to finish your studies about a month before exam day. Use the rest of the time allotted to take practice exams, revise, and work on difficult topics. Here’s one game plan.
And when it comes to mock exams, do your best to make them as “real” as possible. Give yourself the same amount of time, and make sure the calculator you’re using is the one you’ll be using on exam day (use it through all your studying).
In the last couple weeks before the exam, make sure you’re completely acquainted with the CFA’s rules (and also know how to avoid the problems some test takers have experienced.
Perhaps because they think it might require little more than common sense, candidates have been known to be a little complacent about the Ethics section. But don’t. According to a CFA Institute survey of June 2014 test-takers, a full 63% of exam-takers rated “Ethical & Professional Standards” as “difficult” or “very difficult”—that’s about the same number that felt the same about Economics and Financial Reporting and Analysis. Of course, very few people thinks that either of those sections are going to be a piece of cake—don’t make the same mistake when it comes to Ethics. You’re going to need to know the material really well to be able to distinguish between the multiple choices, in which two or more answers may often both look plausible.
Congratulations on taking the first step toward earning a CFA—we hope we’ve helped you plan your journey. Now go hit the books!