Necessary Skills Needed to Pass the CFA® Exams

In this article, we are assuming that you are already enrolled in the CFA® Program, and if not, you are an aspiring CFA Program candidate. Most, if not all, CFA Program candidates wish to pass their CFA exams on their first attempt. Besides shortening the time to completion of the CFA Program curriculum, it saves you time and money; time that you would have used to redo that particular level, and money you would have used to re-register for that specific level. But is it always the case?

(Disclaimer: CFA Institute prohibits its candidates from claiming supremacy based on passing their CFA exams on their first attempts.)

Level 1 Pass Rates (2015-2019)

Clearly, data shows that less than 50% of the candidates who sat for the level I exam passed. The highest pass rate recorded over the past five years is only 45%, recorded during the December 2018 exams. The 5-year average pass rate is only 42.8%. The pass rate is even lower if you factor in the number of people who registered but for whichever reason failed to show up for the exam.

We will now attempt to answer the all-important question: What does a candidate need to have or to do to pass his/her CFA exams?

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Necessary Skills and Attributes To Pass the CFA Exams

To pass CFA exams, a candidate requires more than just mastery of the CFA Program curriculum content. As seen in the data above, CFA exams are quite challenging.

In as much as the exams have low pass rates, some people passed their exams on their first attempts, so yes, it is possible to complete all levels of the CFA exam in less than three years.

To increase your chances of passing the exams on your first attempt, you need to have the following skills and attributes:

Discipline: Discipline will ensure that a candidate remains constructive throughout the six-month preparation period. Lack of discipline may lead to failure as candidates will deviate from their study plans, and as a result, fail to adequately prepare for them.

Focus: The famous quote, “Starve your distractions, feed your focus,” perfectly summarizes what you need to do to remain focused. Within the six-month study period, candidates will have to give up everything that does not serve the purpose of increasing their chances of passing the exams. Difficult, right? It’ll be worth it once you receive a pass in your results.

Time management skills: Time is an essential part of successfully passing CFA exams. To increase their chances of succeeding, candidates should study for at least 300 hours. Within this study period, candidates have to go through the study notes and attempt practice questions and mock exams, besides leading their everyday lives. Candidates are advised to observe the two hours and fifteen minutes’ time policy while doing mock exams to get used to completing the actual exam within the stipulated time. Candidates should purpose to answer all questions in a CFA exam. Leaving blank questions during the real exam will reduce a candidate’s chance of passing the exam. Since there are no penalties for wrong answers, candidates are advised to use the elimination method to come up with their best possible choice if the worst comes to the worst.

Sacrifice: Imagine giving up your life for the next six months to pass your exams. Imagine missing that routine weekly night out with friends for a whole six months. Imagine canceling events to study. Imagine letting go of that promotion/side hustle because you need the extra time to go over study materials. Imagine not having time for your immediate family members; that is what sacrifice feels like, and it is what CFA charterholders had to do to receive their designation. The six months before your exam date will be “non-social” months. You will have to spare all the time you can, and not just spare it, but spare it and utilize it well.

Integrity: For an Institute known for maintaining high ethical standards, integrity is essential during CFA exams. Candidates should practice high levels of integrity during the study period and even more during the exam period. Breaking any rule, for example, getting into the exam room with forbidden materials, could lead to the cancellation of a candidate’s exam. It could also potentially lead to a candidate being banned from participating in the CFA Program. Make a point of checking out the exam policy document before your exam day.

Attention to detail: Being a multiple-choice question exam, it is tempting for candidates to input a wrong answer (that will have been purposely included among the answer choices) simply because they missed a key variable. Candidates should be keen, especially when going through the relatively long questions. The devil is in the details; do not miss the mark simply because you failed to note a keyword.

Curiosity: Great financial analysts are curious. They are eager to find out more about an underlying concept. As a CFA Program candidate, you should not just study; you should also be keen to understand how some ideas came about. Understanding concepts deeply is the surest way of ensuring that you do not forget.

Final Word

Incorporating all these skills, in addition to understanding the concepts taught in the CFA Program curriculum, will most definitely increase your chances of passing your exams on your first attempt. Remember, “starve your distractions; feed your purpose.” Reading will be much more comfortable with your eyes fixed on the price.