Discover your dream Career
For Recruiters

Five things NOT to do if you want to pass the CFA exam

Suffice to say, considering the relatively low pass rate, getting through the rigours of all three exams to become a CFA charterholder is not an easy task. But there are many ways you can shoot yourself in the foot.

Aside from not putting in the study time - recommended at around 300 hours per level - there are surprisingly common mistakes or assumptions people sitting the exam make, which often make the different between a pass and a fail.

1. Assume there are clues in the structure of the multiple choice questions

The 'item sets' in CFA level I and II are essentially multiple choice, which means it's tempting to roll out that classic pub quiz technique - if you don't know the answer, choose 'B'. Other popular assumptions include thinking either the shortest or longest sentence is the correct one or answers with the word 'never' or 'always' are a warning sign. This is bunk - there's no pattern.

"There is no way to discover a secret formula to answering multiple choice questions," says Tom Robinson, CFA, managing director of education at CFA Institute.

"The questions written in as open language as possible, and the multiple choice answers can be very similar. So, if it's a written answer you need to understand the subject thoroughly, or if it's a calculation they will make two of the three options answers you could have easily landed at if you made simple error," adds Richard Fernand, global head of CFA training for 7city Learning.

2. Skimp over certain modules (particularly ethics)

It's tempting to assume that getting more points on more numerical elements of the exam like, say, financial statement analysis, will make up for glaring weaknesses or a lack of preparation in the softer elements such as standards, ethics and regulations. Sadly not.

"Some elements of the course will help with others - financial statement analysis will help you understand equity investments, for instance, or quantitative methods will increase your understanding of fixed income," says Fernand. "But all syllabus points could be tested, so paying less attention to some could be the difference between a pass and a fail."

"For candidates at the margin of the minimum passing score, performance on the ethics portion of the exam is important," says Robinson.

3. Be overly reliant on study guides

It wasn't so long ago that the recommended number of study hours per CFA level exam was 250 - it's now been upped to 300. Suffice to say, cutting corners isn't wise and, as helpful as they are, relying more or less solely a study guide is just that.

"Historically, people simply used materials by companies like Schweser and Stalla to guide them through the exams," says Fernand. "I wouldn't recommend using them exclusively - you need to also closely study the syllabus."

"CFA Institute does not consult with or provide planned exam content information to prep course providers at any point during the exam development process," warns Robinson.

4. Assume the written parts of level three mean composing a novel

For most of us, writing vast pontificating essays is something last done at university when it was perfectly acceptable to get your point across in 2,000 words. The level III exam is indeed the only one with a written element, but you're not Charles Dickens.

"It's not an essay, and don't assume that flowery language will score you extra points," says Fernand. "Think of it as writing a memo to your boss - they want to see the facts and their implications in clear, concise language."

5. Apply the same study techniques to each exam level

"Surprisingly, some people - particularly those with a finance-based degree - breeze through level I, because many of the concepts are familiar to them," says Fernand. "They apply the same (often less rigorous) study techniques to level II - possibly because they're more senior and have less time - and then they come a cropper."

This is clearly reflected in the CFA's stats - 22% of level I, 58% of level II and 49% of level III candidates found the questions to be more difficult than expected, Robinson tells us.

There are, of course, more potential stumbling blocks - why not share them below?

AUTHORPaul Clarke
  • Sp
    25 May 2016

    I think you mean small numbers, Rhett

  • Hi
    Hi are you here
    16 April 2015

    Hi, just found this website, sick advice. I'm taking level 1 next june, haven't started reading yet and I've got no background in math, pretty bad at it actually. I mean, I can sum, divide etc. but things start getting ugly for me at decimals. I've read in forums that this will kind of impair me, but just wanted to get your views on this.

    PS. Thomas007, how many hours do you think I should devote to, knowing my lack of knowledge in math.

  • pc
    8 September 2010

    Just for the record, the CFA exams have always had a strong ethics focus, one of the first organisations to do so and long before the current round of scandals. Even back in 1999 performance on the ethics section was given extra weight for marginal candidates.

  • Th
    Thomas 007
    1 September 2010

    Many top employers certainly would not see it like that!

  • me
    31 August 2010

    In terms of the depth and width of coverage of the subject of Finance, particularly in relation to asset management, I would give it to the CFA above any Masters degree, no matter wherefrom.

Sign up to our Newsletter!

Get advice to help you manage and drive your career.

Boost your career

Find thousands of job opportunities by signing up to eFinancialCareers today.
Latest Jobs
Northern Trust
Sr Financial Analyst
Northern Trust
Chicago, United States
Northern Trust
Sr. Analyst, Alternative Investments
Northern Trust
Tempe, United States
Northern Trust
Sr. Analyst, Alternative Investments
Northern Trust
Tempe, United States
Noah International 諾亞國際
New Business Specialist (Insurance)
Noah International 諾亞國際
Los Angeles, United States
State Street Corporation
Agile Lead
State Street Corporation
Princeton, United States
State Street Corporation
Full Stack Developer (Python) - Networks, VP
State Street Corporation
Quincy, United States

Sign up to our Newsletter!

Get advice to help you manage and drive your career.