Haven’t had much time to post this, but thought it could be useful to people studying. I’ll give my overview of how I studied for Levels 1,2, & 3 and which materials I found good and which I thought were either bad or could use improvements.
I’ll just address a few things at the top here because I’ll only briefly touch on them later on.
Cost: The cost for any level shouldn’t be too bad, but a general rule of thumb I have for CFA exams: spend the money. I’d much rather spend an extra 2-3k to pass this exam by having as much good material at my disposal than not, and then failing. We all have different situations both personally and professionally, but that’s just my belief.
Time: Time and mental health are the real enemy with this exam. I assume the vast majority taking this test are gainfully employed with family, friends, significant others, and obligations. We already have limited free time, and CFA will rob you of this for the duration of these tests. Just know that. However, if you are committed to this program, I would 100% recommend putting in the extra effort over whatever you’re doing at a baseline level, because you want this to be over. It’s very tempting to hang out on a Sunday and relax, but finding that extra gear is what this exam is all about. Taking a relaxation/mental health day every now and then is also important in avoiding burnout though. Personally, I think these exams are about perseverance and determination, rather than any sort of perceived investment edge you get. It shows you not only have a baseline level of intelligence, but you’re motivated to do what you do or get to the place you want to be.
Skillsets Gain: In short, not much. But you’d be surprised at how few people are able to understand multi-asset investing. If you’re in asset management or investment management, there is value in being able to understand competitive landscapes and different asset classes. This is particularly true if you’re in a product or a due diligence type of role. Since you’re not really doing DCF modeling or true valuation (other than the theory behind it), it less of a direct jump into equities investing. Same with fixed income. Real life desk/floor experience helps much more. But it is surprising to see how many people, even within financial services, do not have the slightest idea what the yield curve is, how derivatives work, or mid-level concepts about managing portfolios or allocating assets effectively.
Career Value: I’d give this a low to medium grade. But again, it depends on the industry you’re in. It’s most useful for asset/investment management, but sometimes this may be required by firms. It’s also becoming a saturated certification, so the amount it stands out is likely on the decline. However, to that end, not having it can also stick out in those industries. It’s much less valued for investment banking/private equity and any direct company investing or strategic role. For those you’d be better off either going into those industries directly to get real life experience or doing an MBA to pivot yourself, or something else that is not the CFA.
Now, on to the exams and my thoughts on all these exams and how to study for them, along with reviews of certain common providers.
L1:
Pretty straightforward when I took it. I was thrown off by the recent pass rate numbers, but I’ll stick with what I know.
The format of this exam already makes it much easier than L2 and L3 since it’s just straight one by one multiple choice. I felt Kaplan was perfectly fine for this. The Q-bank and study materials they offer were more than enough IMO. I would suggest the review class package, but honestly if you’re a self-starter and can handle yourself studying, this may not even be needed.
The materials provided by CFA Institute I even felt were fine for this test. No need to read through the book either. This is a practice makes perfect exam. The more you know, the better. For those in the financial services industry who have taken any Series licensing exams, approach it like a tougher version of one of those tests.
The hardest part to me of this test was just getting myself comfortable with a 6 hour test (which it in fact no longer is, so that makes it easier). Some of the material like the Accounting was challenging for a first-time without an undergrad degree, but again, the more you practice the better off you’ll be.
Because of this, I believe buying yourself an extra practice test or two towards the end from one of the main providers like Kaplan is worth it.
Formula: Kaplan Schweser, with a supplement of CFA Institute’s Q-bank. You’ll be fine. But it’s on you to study. That’ll be the primary determinant of whether you pass or fail. Unlike the other exams, which we’ll get to below.
L2:
I debated with myself whether the L2 or L3 jump was tougher, but I give the cake to L2. The shift to vignettes from normal one-off multiple choice is an absolute beast because you can’t approach it like the SAT where some lines are more important than others. You really do have to read all of the text, which makes this an intense exam.
The actual material itself is also very hard. Even though people who have taken L2 will tell you it’s much harder, it’s another thing to actually see it for yourself. The quantitative focus also means understanding processes and different problem setups are critical. You can attempt to memorize but you’ll need to truly understand the core of the material to get through this. That to me was a big difference with L1.
For study materials, there’s a few options:
Kaplan: I did think Kaplan was useful…to an extent. Sometimes they don’t hit on every key concept or they don’t ask all the questions every way they can be asked. I think the instructors know what they’re doing, but sometimes the way they present their decks and their study sessions isn’t super intuitive. On the other hand, some of the handout materials at their 3 day+ weekend sessions they offer in April/May are great practice and often really comprehensive. It did leave you wondering why they didn’t show us this while actually using the Kaplan package, but that’s just sales and marketing for you. I think you can lean on Kaplan primarily, but it should be supplemented. The practice tests they offer are okay, but their explanations can be very lackluster. And if you need some help on certain questions or those concepts, the explanations can be very surface level.
CFA Institute: use the Q-bank and selective readings/problem sets in the books. They can’t throw you anything that’s not in the books. The books are dense, so some selective reading is likely the best you can hope for without not sleeping.
Mark Meldrum: I thought his instruction materials were decent, and he offers a nice number of practice tests for less than a night out at a bar. Some people on Analyst Forum and Reddit swear by Meldrum. I think his material is okay, but his explanations for key concepts can be lacking at times, especially if you don’t understand it fully to begin with. Sometimes the explanations are coming at you for the first time on practice materials. His practice exams are great in that he either has video explanations or comprehensive written explanations for those. Meldrum is a good supplement, personally I wouldn’t recommend as your primary provider.
Chalk and Board (Nathan Ronen): Good set of videos and explanations. Nathan came from a large test provider so he knows how to run a testing provider service. He’s a one man show though, so everything runs through him. He’s good at teaching the material, but something the practice materials can be lacking so supplementing would be the best approach. Don’t know many people who used him personally, but the ones I do know generally vouched for him. One guy I know used him for every level and said it all worked out. To Nathan’s credit, he’s also not shy about admitting you should consider getting practice tests from other providers to get as much practice in as you can. His approach leans on his videos a lot so if you’re not a visual learner, it could be more challenging.
Wiley: I heard bad things about Wiley, and I never used them after a couple people I know said there were mistakes in the books/tests.
Formula: I’d go Kaplan, CFA dosage, and some Meldrum to finish it off. This exam is all about you understanding the concepts though.
No amount of time or staring at Kaplan material will help if you’re not making ‘mental breakthroughs’ which you innately feel. If you’re not getting something, go back and figure it out, because you don’t want to get burned later on for something you knew you could address. That’s the name of the game on this exam. Also building mental fortitude for exam day by practicing vignettes may be a challenge initially, but with practice it gets better.
L3:
Another beast. Each exam is different in its own way. L1 because it’s CFA for the first time, L2 with the vignettes and big jump in difficulty. L3 differs because of the essays. Some will tell you you can underperform on the essays and overcompensate on the afternoon multiple choice and you’ll be fine. In my experience, no dice. Most CFA test providers will tell you the average multiple choice score is in the 70 range. It’s hard to get significantly north of that. So if you get a 30 on the essays, you’re done. The key is making sure you’re at least average on the essays and then maintaining your level on the multiple choice. It’s typically rare to see someone outperform on the essays compared to the multiple choice.
I did feel the material was comparable in difficulty to L2, maybe slightly more or less, but I’d say on par.
Essays are not really essays. You just need to make sure you’re hitting on the key points, printing the calculations, and making sure you’re writing keywords you spent months studying on. That’s supposedly what the graders are looking for. Many providers will tell you bullet points for these is fine too.
To me, the hardest part of the essays is first making sure you’re actually answering it the way they want you to, and that you’re getting a lot of points/credit for those. For context, getting north of a 60 is considered a great showing on the essays. So there’s no 100% scores on essays, or even close to it. Unless you have no day job and spent all day for 6 months doing essays.
This is why I think scrutinizing your L3 study provider is the most important of all the levels. This was the level where I found the quality really fell off for some offerings, or were overhyped for others.
I used all of these except for Wiley, btw.
Kaplan: This was a letdown for L3. Some will disagree with me, I’m sure of it. Overall I’d give Kaplan a C for this level. General trend I found for Kaplan is that quality declined each successive exam level. They also thought keeping 6 hour practice tests for a newly formulated 4.5 hour exam was a good idea. That was a bummer. Similar issue on practice test explanations as L2. Lacking in quality there. However, because Kaplan is a behemoth in the CFA study space, by nature they have the greatest sheer number of resources compared to any provider, whether it’s instructors, practice materials, videos, study sessions, etc…
LevelUp (Marc LeFebvre): New entrant. Marc specializes in L3 CFA materials. His approach is entirely unique compared to all others in that he focuses solely on the CFA Institute book rather than anything else. Pretty much everything he teaches is from the books. The CFA books are basically the bible. Everything Marc cites or explains, or even does practice problems from is from the books. He does have custom slide deck book pamphlets he gives as well. He doesn’t lean on these tremendously during his videos, but he color codes it so you know which examples in the book to focus on and for which concept. He calls them as their colored in the book (blue boxes, white text, etc…).
This is both good and bad. Marc’s approach is by far the most intense of any provider I’ve seen at any level. It’s also the most expensive by my count. The amount of videos he makes in the video libraries are nauseating. I forget what the exact hour amount is but it’s close to 50 hours give or take of video material. And these are not movies or TV shows, this is boring dry material. I think I made it through 1 full video. It was like watching paint dry. But to his credit, he has basically made a video for every part of the book, so if you have a question you can always refer to that part of the video in the library. But I personally felt this was way too overwhelming for someone with a full time job and limited time to dive head first into. I was never someone who learned by being talked to for hours, so it could be different for each person.
One major downside of LevelUp is there’s virtually no practice material. This can be extremely frustrating in April or May when you’re looking for whatever practice you can get. Marc positions it as your practice should be from the CFA books itself, but that’s not exactly helpful when you’re trying to grade yourself on essays or try different scenarios of how questions can be asked (which we know is the name of the game on L3).
I thought LevelUp was okay, but didn’t fit my learning style entirely. I found myself lost in the sea of material at times. But I would concur that it is the most comprehensive of all the materials out there and it sets you up to pass if you can commit that time and run according to Marc’s visual learning style presented. It’s most conducive to someone with a less intense job/personal life.
Chalk and Board (Nathan Ronen): The guy is definitely intense and his approach can be a little off-putting at first with the unsolicited LinkedIn messaging, but he knows his stuff. Nate used to work one of the major test providers before going at it on his own. I think he was also on a grader, so he has first hand knowledge of how to approach things. Personally, I think Ronen is most powerful for L3 compared to his other levels, because of his essay advice. I’d use him but supplement with others.
Meldrum: Meldrum has a reputation of having the hardest L3 practice tests. I would agree with that. I did find his instructional videos on the concepts somewhat useful, but again very time consuming. I felt the books were better to start with and then cross reference to Meldrum’s videos. But his practice tests were great. It’s super cheap and you get a bunch of them. My criticism is they’re sometimes difficult to gauge where you’re at since your scores can be all over the place, but his system does let you see where you scored relative to the average of others taking it. Not just at the test level, but even at the question level. That’s the way CFA grades too, so it’s good to see where you’re at. Most test providers, including Kaplan, don’t provide that level of transparency on the testing taking side. His video explanations for the essays were also very helpful. Most providers just send notes with the answers on it. He actually goes through all of it on video, without charging extra fees.
Wiley: Didn’t use, but I heard was average. I nearly took a flier on their practice tests, but ultimately didn’t.
Formula: I bought like 5 provider materials because the CFA helps you out zero on the essays. You’re kind of thrown into the sea on the essays, so any and all material is helpful in my view. I didn’t come across anything that was bad, just that wasn’t the best use of one’s time. Generally, spend less time watching videos and more time getting at how the concepts work and should be explained. Most providers waste too much time on the videos.
The CFA books are most powerful on L3 compared to any other level. It’s tough, but I’d recommend going through the books where possible, especially the highlighted areas. Then supplement it with Kaplan/LevelUp/Ronen/Meldrum to make sure you’re covering all your bases. Even with all this provider material and going through the books, I still felt like I just about had the lay of the land on exam day because the essays can be worded in ways you’ve never seen.
