I just finished the third (of three) Chartered Financial Analyst (CFA) exams. I believe I passed, (results will not be available until September.) I’ve taken more than my share of tests in my life, and these three exams have been the three hardest. I decided to publish my advice for others becoming CFA Candidates because 1) my partner at Alternative Energy Stocks, Charles Morand has just become a CFA Candidate (he’ll take the first exam in December), and 2) there is little advice available online.
VI. Buy two of your chosen model of calculator The reason for this is because, if your battery happens to die in the middle of the test, you don’t want to waste precious minutes trying to change it. I never had a battery die on either of my used calculators, but why take the chance (especially when you may never use the $5 extra battery.) The two models allowed are the HP 12C and the TI Business Analyst Plus. The links are to eBay, where I was able to buy my calculators for less than $20 each.
V. The CFA Institute recommends a minimum of 250 hours to study for each exam. They are not joking. I studied around 300 hours for each exam. If you can only put in 200 hours, you will not pass unless you are considerably smarter than I am. The candidate sitting next to me on level III told me he had taken off 10 days to go skiing this spring. He didn’t finish two questions on the morning portion of the exam, and I got the impression that he had trouble with the parts he did finish. He seemed angry about how hard the exam was.
IV. Make sure your job and your family are supportive. Ideally, you should work someplace that gives you time to study, as well as support. If you have a wife and kids, don’t plan to see them on weekends for several months each year for at least three years. Make sure they understand that, and are supportive. I had a study partner for level I who had kids, and frequently would miss study dates because of family obligations. This was his third attempt to study for level one, and he was so unprepared in June that he did not even bother to take the test.
III. Do all the problems in the coursework. If you just read the material without doing the problems, you will have no idea what they’ll be asking for on many of the questions on the exam.
II. Practice exams are also a must. I’ve found that the online exams available from the CFA Institute are harder than the actual test, so I do not bother with anything but the one they give away for free. On level III, however, the last three years of essay questions are available. I found these extremely useful. Exam prep providers Schweser and Stalla also offer practice exams. For level II and III, I used the Schweser practice exam book from the previous year, which I bought on eBay, and found it very helpful. I spoke to another candidate between sessions on level III who had used both. He had switched providers because he was taking level III for the third time, and needed to try something different. He thought Schweser exams are at about the same level as the real thing, while the Stalla exams are too easy.
I. Exam Prep courses and videos. I never took an exam prep course from one of the providers, since they are quite expensive and I was paying my own way. However, I did use year-old videos (at level one two-year old) from Schweser, and found them an excellent way to review the material over the last month of prep. I also bought these on eBay. Exam prep providers also offer condensed versions of the curriculum. I never used these, so I can’t recommend one over the other. The same candidate referenced in II above said that Stalla was better at explaining the concepts than Schweser.
In short, eBay is your friend. Practice questions are your friends. Your current friends (and possibly family) may have to be reminded of your name, you will have seen so little of them while you were studying.
The CFA program is an incredible amount of work, but you can get a lot more out of it than just better pay or job prospects. It has made me a better analyst. And having missed the last three, I’ll appreciate Spring more for years to come.
Tom Konrad
UPDATE 5/19/2011: There are six more useful tips here.
thanks — good post!!! I agree 100% with your advice. Took Level I in June and looking for scores on July 29. Congrats on getting all the way thru to L3. And you are dead on: the program makes you a better analyst.
I think this guy is too self-centric
“you will not pass unless you are considerably smarter than I am”
I Just completed level 1 & 2 in a year & certain about clearing 3rd in 2009.
means a CFA chartered in a year & a half
The line was “if your do not study 200 hours…” If you pass all three without studying 200 hours for each, I will be happy to conceed that you’re considerably smarter than I am.
Hey,great post.Thanks a lot..I am appearing L1 in June 09.Hope for the best.Will try to cover more than 300 hrs of study.
Hey, I totally agree with John there… you have to take it easy “considerably smarter than I am” what is that supposed to mean.. that you’re that stupid well in the past 6 months i went for 2 weeks in the UK had fun came back and passed the dec2008 exam… so in other words NO if you need some time off to freshen up go for it, dont just bury your self in the books… “Aim High and work smart (not hard)”.. cheers every one and goodluck john with your L3..
Hi, I am in dilema about the course.I am a Graduate in Physics and have no knowledge in finance. I am planning to take up the exam from June 2010. Do you guys think i’ll tougher time preparing for CFA or can i crack it if i put little extra effort?
Ratanesh-
If you don’t have any finance or economics background you can still do this… the math/statistics part of the CFA are the hardest part for most candidates. If you’re good at statistics, the rest should just be a matter of study time. Since you’re still in school, I suggest you audit whatever courses you can in economics now.
You should allocate more study time than otherwise, maybe 300 hours per exam, but if you do that, I don’t see a problem at all.
thanks for sharing your experience. I am from peru and i’ll take the L1 this june
Daniel-
Good luck!
Tom:
How far in advance of the exam do you suggest being completely done reading the material (and having done the basic questions at the end of each chapter)?
In other words, how long were you doing practice exams for, and how many full practice exams did you do?
Thanks!
There are so many ways to go about this, I’m sure I don’t know what is best for other students.
What worked best for me was to do all the reading, but not do any of the end of chapter problems first. I then would go back and do the problems, which meant that I would have to review some of the material as I did them. Ideally, I’d finish this process about 2 weeks before the exam. I’d then take a practice test, and review the sections I needed brushing up on. I’d repeat the practice test/review process as many times as I had time for before the exam.
I think the CFAI practice tests are not nearly as helpful for studying as the ones from the test prep companies… and you can buy old practice tests on ebay for not too much.
Thanks for that last post Tom. I’m doing L1 atm, taking the exact same approach. I’m 7 weeks out and have finished the CFAI readings/EOC Q’s for 90%. Obviously i haven’t sat these exams, but I’m glad I have 7 weeks, just for the quantity of it. I think 2 weeks, dunno, stretching too thin for me.
Agreed, statistics hard, but don’t underestimate SS9. Everything else, with a finance/accounting undergrad, should be good.
General question – are the EOC Q’s a good gauge of the actual exam Q difficulty? The ones for statistics are very….time consuming, draw out. I guess its the underlying concepts though.
Nico-
The early end of chapter questions tend to be easier than exam questions, while the ones at the end of each set tend to be a little harder.
Exam questions require thinking and knowledge similiar to the hardest questions in each set, but they tend to be a little less complex.
Thanks for the advice; very helpful!
I recently finished my degree majoring in Finance and Economics…and am starting the Master of Finance program in september (which at SMU in Canada’s curriculum is based on the 3 levels of the CFA). The program inclused the exam sitting in June…I really hope my undergrad degree, followed by a full-time studying degree allows me to pass!!
Accounting I find may be my weaker section…I plan on focusing on that section, as well as the Ethics component – which I hear is difficult, for some reason…
Anyway, wish me luck and if anyone has any more tips or helpful advice..write back and email me…! thanks
Thanks for the advice; very helpful!
I recently finished my degree majoring in Finance and Economics…and am starting the Master of Finance program in september (which at SMU in Canada’s curriculum is based on the 3 levels of the CFA). The program inclused the exam sitting in June…I really hope my undergrad degree, followed by a full-time studying degree allows me to pass!!
Accounting I find may be my weaker section…I plan on focusing on that section, as well as the Ethics component – which I hear is difficult, for some reason…
Anyway, wish me luck and if anyone has any more tips or helpful advice..write back and email me…! thanks
i passed level 1 on june 2008 and i didnt continue immedialty into level 2
do i need to go through level 1 again
since i did forget a big part of the material if not most of it.
and when is the best time to start, around how many months i need to prepare, a friend of mine took level 2 and told me its really hard.
migx-
How hard any level will be depends on what your personal experience is. I thought I and II were about equal.
I do not think that the material in Level II built too much on Level I… in fact, there was some review, so there should be little need to review Level I.
As to when you should start, that is a personal choice. I’d do the same thing that worked for you on Level I.
thanks Tom
i did start at November 2007 until june 2008
i think i will start the same timing this year, i have been told that level 2 is bigger as material so i thought that needed more preparation. thats why i was wondering
i hope things will go fine
do i need to go through the schweser or the curriculm??
Migx – I always used the curriculum, with the (older) Schweser videos as a supplement. I don’t know how good the the prep books alone would be.
in level 1 i managed like 80% from the curriculm and some readings from schweser that i did find that they are not explained well in curriculm.
but as i have been told the level 2 material is much more bigger and its better to study summaries instead of curriculm tp be able to finish, i think curriculm is much better explained but need much more study time.
i saw the summaries books and they are much bigger than level 1 i cant even imagine how curriculm will look like :S
the issue is the books are realesed i gguess in late november which dont leave much time for such books,
anyhow thanks for the advise, i guess if i can manage it in time wise i will go curriculm.
Thanks a lot Tom 🙂
I am Priya, CFP from India. I am appearing for CFA level 1 in Dec 2010. Ur post is quiet helpful as I’ve been looking around the internet for tips to prepare for the exam.