Last weekend was the culmination of over 300 hours of study for many students undertaking the CFA level I exam this weekend. Passing could do wonders for your career, but the success rate for level one is notoriously low – averaging out at 38%.
What to do if you don’t make the grade? Don’t panic – here’s why.
The ethics module makes up 10-15% of the overall result, but is often the area candidates spend the least amount of time studying. Aside from the statistical impact on your result, it’s also used as a ‘tie-breaker’, meaning that if you’re on the fringes of a pass, your performance in the ethics module can bump you up. Or not.
The number of people taking the exam in June has historically been around twice that of those sitting in December. The pass rate is also more favourable – typically between 42-45%, rather than the 34-38% pass rate of December candidates over the past five years. In any case, more than 60% of candidates will take the exam more than once.
Think that passing the CFA means being part of an elite cadre of financial services professionals? Think again. The CFA is undoubtedly a strong brand to include on your CV, but the fact that more back office staff are taking the qualification and that 23% of candidates are university students has surely diluted its value somewhat. In the 2007 June exams, 71,897 students sat CFA level I – in 2013, this figure was 118,142. It’s a less exclusive club.
The CFA compensation survey suggests average salaries of $155k for its members, while our own research (less favourably) found that jobs requesting the qualification were offering a mean salary of £66k ($108k). Anton Kreil, a former Goldman Sachs trader not shy to court controversy, believes that taking the CFA is an indication of your lack of ambition to earn big bucks in the financial sector.
The good thing about getting a CFA under your belt is that you’re unlikely to be unemployed – just 4% of charterholders are out of work globally. However, majority of charterholders are in fund management or research – 22% are portfolio managers and 15% research analysts. The next largest proportion (7%) are at chief executive level. What’s more, 36% of the 109,776 charterholders around the world work in ‘equities’, while just 3% are employed by hedge funds and 5% in private equity.
The large investment banks are still the largest employers of CFA charterholders, but even here the numbers are relatively small. In the U.S., Bank of America is the biggest employer with 1,205 CFAs in 2012, HSBC is most likely to hire charterholders in Asia-Pac but still has just 1,130 on its payroll, and UBS has the largest number of CFAs in EMEA with 422. This could mean that the CFA will set you apart from your colleagues, but it also suggests that most big banks don’t really demand it.
Fails come in ten types – bands 1-10. If you were in band 10, you would have been very close to a pass. This could be dispiriting to know, but it also shows that you were a whisker away from success and, with a little improvement, could easily pass next time.
The CFA isn’t all about getting a job or even boosting your career. In its 2013 CFA Institute Member Satisfaction Survey, the vast majority of respondents (86%) said that they took the qualification because it increased their knowledge and competence. Only 61% said that it helped their careers and 51% said that it gave them access to a network of skilled professionals.