Last Few Days For the CFA Exam. Read how to prepare for the Exam.

Level 1: 35% | Level 2: 44% | Level 3: 47%

These are the pass rates for the CFA exams in 2023. Approximately 25,000 students sit for the papers every year. That means a sizeable population of that number will not pass the CFA exams on their first attempt.

It is unsurprising to see why many aspiring financial professionals are enrolling for the chartered financial analyst course. The program continues to dominate the finance industry, and financial hopefuls see it as a ticket to a lucrative career.

However, there is no guarantee of success. If you want to be one of the lucky few who call themselves a CFA charter holder, buckle up. You have a lot of work to do. The CFA preparation is intense. But it’s not just about studying the textbooks. You need discipline, good organisational skills and develop critical thinking like a professional financial expert.

The CFA course offers its certified students a world of amazing opportunities. The qualification enjoys widespread acclaim in the industry, with many top MNCs and prominent financial institutions preferring to hire CFA professionals. If you are ready to join this illustrious tribe of skilled finance experts, you are in luck. In this post, you can learn the tips and tricks to successfully clear all three levels of the CFA program.

CFA: How to prepare for the exams

You can’t just wake up one morning, jump out of bed and decide it’s a lovely day to take the CFA exam. The course is a commitment that needs careful CFA preparation and long-term planning. The syllabus requires rigorous prep work and intensive studying.

The CFA program has three levels. The exam weightage differs as follows:

Also Read – CFA Scholarships – Types, Eligibility & Application Process

CFA LEVEL 1

Your journey to becoming a financial professional starts here. Level 1 lays the foundation of the entire course, introducing students to fundamental concepts in investment management. There is a strong focus on ethical and professional standards and financial statement analysis at this level.

Exam format:

The CFA Level 1 exam has the following features:

• The computer-based exam is split into two, with a morning and afternoon session.
• Each paper has 90 multiple-choice questions, with a time limit of 2 hours and 15 minutes.
• You can take the exam four times in a year – in February, May, August, and November.

CFA preparation tips for Level 1:

1. Plan your study schedule 6 to 8 months in advance.

The CFA board recommends 300 hours of study time per CFA level. The earlier you start planning, the lesser the chances of getting burnt out or overwhelmed when the exam day approaches.

2. Devote enough time for the four subjects with maximum weight

The following subjects could carry a combined value of over 50 per cent of the total paper, so study each one thoroughly.

• Ethics and professional standards
• Financial statement analysis
• Equity investments
• Fixed income

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3. Practice papers and mock tests

This is probably the most important tip you’ll ever receive. Every successful CFA student will tell you to solve as many previous years’ papers as you can get your hands on. This is vital to cracking the CFA preparation.

4. Time yourself 

You have a limited time of 4.5 hours for both exams. Time yourself when practising papers so you learn to handle your hours efficiently.

5. Practice using the official CFA-approved calculators 

Your CFA preparation must include using either the Texas Instrument BA II Plus or the Hewlett Packard 12C calculators. Look for the models approved on the CFA website before you start studying. CFA experts feel you must familiarise yourself with the official instrument for the exam.

6. Work with an established coaching partner 

Some learning institutes are well-equipped to support you with your CFA preparation. When you enrol with them, you learn from CFA professionals who have spent considerable time in the industry. They help you clear doubts, simplify complex concepts and give a clear understanding of the investment management field.

7. Get feedback from various sources

When you solve practice papers, write out your answers and get them checked by any CFA expert. If you are in a prep course, the professors will offer feedback and suggestions to strengthen your basic concepts.

8. Find an online community

Register with online CFA forums, virtual study groups and mobile apps that give you access to a large community of students. It will help you with your CFA preparation. You can pick up valuable tips, important information and insights from a wide reach of like-minded students.

9. Don’t skip any questions

The CFA examiners don’t deduct points for wrong answers. If you’re unsure of the correct answer, you can make a calculated guess.

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CFA LEVEL 2

Once you clear the first level, you are ready to go deeper into financial analysis. Level 2 requires you to examine and decode financial data while applying investment concepts and tools. There is a focus on the valuation of assets, equity investments and derivatives.

Exam format:

The CFA Level 2 exam has the following features:

• There are 88 MCQs and 22 item sets with vignettes.
• The exam has two sessions, each one lasting 2 hours and 12 minutes.

Also Read – Essential Insights into the CFA Level 2 Syllabus & Course Outline

CFA preparation tips for Level 2:

1. Set very clear study goals

As mentioned before, the CFA board recommends 300 hours of study time per exam. This can add up to 3 to 6 months, depending on your schedule. You should figure out how many hours a day you can commit to your CFA preparation, according set your study plan. You can decide how much time to devote per subject, make adjustments for tougher topics and ensure you have some revision time at the end before the big exam.

2. Know the IFRS standards 

The CFA bases all financial statement analyses on the IFRS system. In places where the question requires GAAP, they will specify accordingly.

3. Do not skip ethics

CFA Experts warn of a common pitfall among students taking the exam. Many believe that, since ethics is a big part of the level 1 exam, it won’t matter much in Level 2. Wrong. The CFA Institute takes this subject very seriously, and 10 to 15 per cent of your paper will contain questions on ethics. So factor that into your CFA preparation.

4. Keep practising with the official calculator

You should be familiar with the calculator’s functions for the learning outcome statements. Continue working with the same instrument you used to study for level 1.

5. Solve mock tests and practice papers 

CFA teachers, professionals and experts agree that solving previous years’ tests is a big part of CFA preparation. Repeatedly solving practice papers and mock tests helps you understand how the CFA exams function. Don’t just browse through them or answer them in your mind. Write down every word and time yourself while you are at it. This tip is so important, yet many students don’t follow it.

6. Refer to CFA online forums 

If you are stuck on a concept or lack clarity on a topic, you can always reach out to other students and experts online. Many people take the help of forums and apps to enhance their CFA preparation.

7. Read through the vignettes carefully

The vignettes are constructed in a way, that useful information is buried underneath unnecessary facts. Your challenge is to quickly pick out what is needed and discard the rest. This takes time and practice, but once you get the hang of it, you’ll be more efficient at solving the question.

8. Master your concepts 

In Level 1, if you didn’t understand a concept, you could skip the question or make a guess. However, many CFA experts have warned that this strategy doesn’t work in the Level 2 exam. Concept-based questions are interlinked. Each vignette will carry multiple questions, where the first answer will set the base for the next one. So you need complete clarity when studying concepts during your CFA preparation.

Also Read – CFA Course Fees: Level 1, 2 and 3. Exams & Coaching Fees 2024

CFA LEVEL 3

When you reach the final level, the onus is on wealth planning and portfolio management. This subject commands 35 to 40 per cent of the total exam, making it a crucial element of the entire CFA course. The syllabus in Level 3 is far more in-depth and introduces new complex concepts. It is also the last hurdle between you and the finish line, so ensure your CFA preparation is thorough.

Exam format:

The CFA Level 3 exam has the following features:

• The test will be split into two sessions of 2 hours and 12 minutes each.
• The Level 3 paper will have item sets and essay-style questions. Both will contain vignettes.

CFA preparation tips for Level 3:

1. Understand the focus of the exam

The examiner will assess how well you can apply investment tools to real-life scenarios in portfolio management. Incorporate your knowledge from the previous levels to show a deep understanding of analysing investment opportunities and managing portfolios.

2. Continue to stick to your schedule 

You’ve made it this far with a clear study plan that gives you enough time to learn, understand and revise. Don’t deviate now. Some students can get overconfident after they clear the first two levels. You are not one of them. You need to double down and work hard. This is the final stretch, so make it count. Commit your 300 hours, create an effective study plan and truly dedicate your time to your Level 3 CFA preparation.

3. Memorising concepts won’t work

The CFA syllabus has complex concepts that some students learn by heart. The examiners are not looking to see how sharp your memory is. They want to know how well you understand each topic. You have to know the concepts well enough to apply them to the scenarios given to you. Comprehension is a key element of your CFA preparation.

4. Learn better exam time management 

Here is some valuable advice from professionals who have done the CFA preparation. Those who timed themselves during the mock tests never finished their papers the first few times. They had to learn to organise their thoughts and answer each question within a limited time frame. Some suggested listing points if you don’t have the time to write paragraphs. As long as you prove you know your material, that’s all that matters. Also, don’t dwell on grammatical mistakes and focus on the subject.

5. Alternate between ‘tough’ and ‘easy’ topics

You need a strategic study plan that sandwiches a difficult subject such as Fixed income between two simpler topics such as Equity and Economics. This will give your brain a breather between tough subjects and help you manage time better. Don’t forget to pay extra attention to portfolio management, as it takes up a sizeable chunk of the exam paper. So plan your CFA preparation accordingly.

6. Answer all EOC and BB questions

Many previous years’ students who passed the exams suggest solving all end-of-chapter and blue box questions at least twice. This helps tremendously with your CFA preparation. Continue to work on mock tests and practice papers as you did in Levels 1 and 2.

7. Use technological platforms for learning

There are many virtual study groups, online learning videos and student forums that can help you with your CFA preparation. Many coaching partners, such as Proschool, offer tech-savvy resources to aid learning.

Also Read – CFA Jobs & Salaries In India After CFA Level 1, Level 2 & Level 3

How Proschool helps you master the CFA course

One of the best tips for acing the CFA course is to sign up with a leading coaching institute such as IMS Proschool. The school has helped many students clear the exams through innovative learning methods and practical training sessions. The professors at Proschool are CFA-certified finance experts who offer students a unique perspective of the industry. They also guide and mentor each student through the rigorous CFA preparation.

How Proschool can help:

• Students can avail up to 5 mock exams and over 2,000 practice questions, which can help them with their CFA preparation.
• Experienced teachers simplify concepts, clear doubts, and offer unique insights.
• You receive a specialised 6-month study plan with an additional three months of revision to help you crack the exams.
• There are Proschool centres set up in major cities in India that offer quality coaching.
• For students unable to attend classes, Proschool also offers online sessions that are equally engaging.
• Proschool uses cutting-edge technology to enhance your CFA preparation. You can access updated online resources to further your learning.
• Once you clear your CFA exams, the institute will help you find suitable jobs through its effective placement program.

FAQs

1. Can I prepare for CFA on my own?

Yes. The CFA institute offers official CFA textbooks and online learning resources for students who wish to study the CFA course by themselves. Is it a good idea to do it without help? Maybe not. What happens when you don’t understand a topic? What if you need help? The syllabus is very rigorous, and there is a lot to cover. Joining a professional learning set-up, where the staff is efficient at teaching can help you nail the course and do well on your exams.

2. How long does it take to prepare for CFA?

The official recommendation by the CFA institute is to spend 300 hours studying before you take any of the exams. That amounts to 3 to 6 months of learning, depending on how many hours you can carve out each day. Even if you start studying in advance, you still need a smart study plan to ensure you are optimising your time.

3. Is three months enough for CFA Level 1?

If you devote those entire three months to studying, it can be. If you want to clear your CFA Level 1 as soon as possible, consider signing up with a coaching institute like Proschool, which can help you grasp the material quickly through various learning techniques.

4. When should I start preparing for CFA?

It makes sense to start three to six months before you plan on taking the exams. Take into account your lifestyle, work and personal commitments and schedule a study time accordingly.

5. Can I study for the CFA level 1 while also working?

Yes, it is possible if you are disciplined and dedicated. You need to plan your time efficiently, and it helps to study with a coaching institute as they take care of all your learning needs while you work simultaneously.

Conclusion

Your CFA journey can be a long, winding road with a few bumps. To stay the course, work hard at a steady speed until you hit your destination. Consider the tips and tricks listed above for your CFA preparation. Curated by students and professionals within the field, they will help you on your path to success.