CFA exams are not easy: most people fail. Nor can they be rushed: the CFA institute advocates at least 300 hours of study for each of the three levels. If you want to pass, you'll need a plan. And you'll need to stick to it through long years of study. Based upon the average age of CFA exam-takers, earning the full charter will take you three years - at least.
We spoke to a selection of CFA exam veterans, including full Charterholders, CFA exam coaches, and senior members of the CFA Institute itself.
If you want to get through CFA levels I, II and III, this is what they said you'll need to do.
Don't even start the CFA program without an awareness of the implications. Bruno, a full charterholder who works in a London hedge fund and passed every exam first time, says it's not worth studying CFA Level I simply to put it on your CV: "If you do not enjoy investing and doing research, the CFA exams are not a good use of your time," he tells us.
Massimiliano Saccone, a full charterholder, says you'll need to go into the CFA program prepared to make sacrifices. "I was working full time. I didn't study at all during the week, but I devoted many, many weekends to the exams. You have to sacrifice time with your family or girlfriend," he says.
Vishal Awatar, a senior CFA tutor at Kaplan Financial Markets, says every level of the CFA is like two or three of the UK's A Level exams.
UK students typically spend two years studying for each A Level. By contrast, Awatar says most students spend five or six months studying for each level of the CFA. However, Kaplan runs an 'early start' course which begins in October (for the June exam) and Awatar says this is becoming increasingly popular.
"You definitely need to plan your study time well in advance of the exam date, and stick to it," says Bruno. "If your working hours are long, you may need to start as early as January to accommodate enough study time and buffers to allow for your personal and professional commitments."
The CFA exams test your knowledge of financial concepts. However, they also test your knowledge of English. If English is your second language, work on your fluency alongside your studies. "If you're a non-native English speaker, you have a handicap," says Saccone. "These are English exams and some of the phrases are difficult to understand, even for English speakers."
The CFA Institute provides its own study planner, which you can access here. This indicates how much time you'll need to allocate to each topic and allows three weeks to review your knowledge. Steve Horan, managing director and co-lead of education at the CFA Institute, advises using this planner from the start so that you can optimize your study time.
The CFA provides its own study materials, but they can be wordy. Bruno says he used a 'notes provider' for Level I, but reverted to the CFA's own materials for levels II and III to make sure he "covered all the gaps".
Pankaj, a structurer at a major investment bank who also passed all three levels first time, says he focused on studying the CFAs own materials. "In some cases I also went through the materials from Schweser [part of Kaplan]", he adds.
Awater says Schweser's materials take the underlying text written by the CFA Institute and try to summarize it without leaving anything out. Kaplan also offers videos that will talk you through the entire reading. "Our students' pass rate is definitely higher than the global pass rate," he tells us.
If you want to succeed in the CFA exams, it's imperative that you run through past questions. "We tell students that they should go through the related questions as soon as they've finished a topic," says Awatar. He points out that there are no past papers available for Levels I and II, but that the CFA Institute provides end-of-chapter questions within their text. Schweser also offers an online question bank with 4,000 multiple choice questions for Level I.
Horan says you should use topic-based questions to assess which areas you're weak on. Needless to say, this is where you should study hardest. "Candidates indicate they have the most difficult time with derivatives and financial reporting and analysis. In general, candidates will tend to get more mileage from their studying by focusing on areas they are weakest," he tell us.
While you need to run through questions after studying each topic to ensure you've understood it, you need to devote an increasing amount of time to answering questions as the exams approach.
"We recommend, therefore, drilling end-of-reading questions, topic-based practice exams that are generated from a bank of over 1,000 questions, and mock exams," says Horan.
In the final month of study, you need to start answering these sample questions under exam conditions. "Time yourself answering the questions," says Saccone. "I measured the speed at which I took past exams and timed myself answering questions from the books."
Kaplan runs invigilated mock exams in major financial centers. It also provide mock exam papers online. Awatar advocates taking as many mock exams as possible in the four weeks leading up to the exams.
"Ideally, candidates [for the June exam] would be in a position to begin taking the mock exams now, if not earlier, to identify weak points if they have been able to stay on schedule," says Horan. "This approach ensures that candidates have a little more time to go through topic areas which they may find challenging more thoroughly, and ‘top up’ their knowledge accordingly."
If you're working full time, you should take some time off as the six-hour CFA sitting approaches. Saccone says he took a 'refresher course' a couple of weeks before each exam. "At the end of the day - when you're working and trying to study in your free time, it really helps to give yourself this space," he says.