I have a few colleagues who earned their CFA Charters back in the late eighties to early nineties. We have an ongoing debate over whether earning the Charter is more difficult now, or back when they earned it. Does anyone have any thoughts on how the program difficulty has changed over time? Any help putting them in their place would be greatly appreciated.
This is a taboo subject.
I do remember though seeing an exam from decades ago and it was 4 essay questions. Not sure if that makes it easier or not but the pass rates were over 80%.
They wouldnt have had all the resources we take for granted such as the internet/ipads/ebooks/pdfs etc.
In the old days, the equities section ended at the Gordon Growth model. Also, none of these sections existed: Alternatives, Derivatives, Taxes, GIPS, International FRA, + many moreā¦
Level 3 was considered to be a total pushover, which later became super hard 2003+
just ask them to bring their books in and compare it to the current curriculum. that should end the debate instantly
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the only thing they may be able to counter you withā¦ is that L2 used to be partly written
Thatās a little harsh in terms of āprovingā anything - I passed last year, and thereās no way that I could pass now, given how much Iāve forgotten. But I do agree with what you wrote about the other sections - the curriculum has expanded hugely. My boss got his back in the 80s when the passrates were still 70%+ and he was really surprised when he saw how much the curriculum had grown and how tough the passrates were.
I donāt think there is any value in comparing the todayās exams to past or future exams. The content changes, the pool of candidates changes but it still takes a lot of hard work to pass the exams.
Years from now the new crop will probably be lamenting how easy we had it.
There has been a lot of āprogressā in finance and there will be more, and the curriculum will expand.
I think the candidate pool used to be a lot more experienced in the industry too. Nowadays there are people from other fields, or just out of school etc. pursuing the designation and those people as a cohort probably find it more challenging (and I am not saying there is anything wrong with thatā¦ I started the process before I had experience too).
Their books would be a 3 feet high stack of actual text books, not the nice condensed CFAI texts used now.
You cannot compare players across eras.
I have a copy of the 1967 CFA exam text and it is ~400 pages long and the pages are 1/3 the size of todayās texts. compare that to 3,000 large pages for L1 today. youāre looking at 20x the volume of information and iād say that on sheer volume alone, todayās exam is much more difficult. that said, todayās students are much more geared towards learning vast amounts of information and writing tests based on that information, relative to our ancestors.
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historical pass rates: in 1963, 94% http://www.analystforum.com/about-the-cfa-program
at one point somewhere there was a link to some old exams. if the CFAI was founded in 1962, this is itās 50 year anniversary. I found the first exam here (this was also posted on AF last year), apparently the exam was split into three levels in 1964. Itās funny to see that some of the same concepts were tested in 1963 that continue to be tested today
the CFAI website is down so normally this should be available at www.cfainstitute.org/about/strategy/history/Documents/firstcfaexam.pdf
enjoy!
I wonder what people will be saying about the CFA program 50 years from nowā¦they will look back and say that they have it much harder in 2062 because in 2012 the quant book didnāt even cover stochastic calc.
Plus I think it is kinda assumed that CFA charterholders are lifelong learners in the field - the way I see it, the CFA program is meant to give candidates the most relevant, up-to-date knowledge in the field at the time. It is up to the charterholders to keep learning and stay up to date. I donāt necessarily see someone passing CFA in 1965 as less of an accomplishment as passing in 2012.
As my disclaimer, I have only passed L1 so take my word for what its worth; I just canāt pass up a good debate!
You can add schweser (and no Iām not paid to advertise for them).
benjamin Graham vs Warren Buffet
Would have been great to see them go at it at their prime. Didnāt Graham mention there were not much opportunities anymore a few decades ago?
No, I totally disagree. CFA exams have reached a point of difficulty that has essentially peaked.
You cannot make the L2 or L3 exams that much harder because then, the only people that will pass are the unemployed and people with easy 9-5 jobs (which eliminates all the jobs the CFA charter is most heavily targeted in: equity research and asset management).
Remember these exams were designed for the working professional. An experienced worker will nearly always be hired over an unexperienced worker that has passed CFA exams.
Can you imagine if the CFA program ended up only giving out charters to people working in back office, or non-core finance jobs. The value would plummet, because the experienced will continue getting the jobs anyway regardless of the charter, and the others that had time to study still wouldnāt be able to break in. And then nobody has incentive to pursue it anymore (except for personal learning)
The impression I get from the Institute:
making $$$$ > keeping the value of the charter
Yes! Thatās the funny thing. Near the end of his life, Graham started warming up to the EMH, noting that competition had eliminated much of value opportunities. This was in the 70s too, I imagine today heād be even more in favor of EMH.
Iteracom, it seems like your cynicism is bordering on bitterness.
Its the end of the world. Itāll never work. It was so easy in the past. Itās not worth anything in the future.
Its just the world changing and evolving. Take what you got out of the process and move on, yes?
Yeah I disagreeā¦if the exams are made harder, it will only be more valuable. If you have good experience and pass the exams it will be a mark of distinction.
Anyways, CFA is aimed at much more than ER, itās designed to cover a pretty broad set of finance and investment roles.