@Canadian Accountant, who says that the reason CFA attrition level is ~90% is because of low barriers to entry and low educational standards…
Level 1 is designed to give you all the tools that you might have missed at undergrad. If you havea finance/accounting undergard, then L1 should be largely a repeat of what you already know (like the CPA exam in the US). Once you’re able to get past L1, the “advantage” that finance/accounting majors have significanly drops off.
Ergo, I would agree with you if the attrition rate at Level 1 were extremely high, and the attrition rate of Levels 2 and 3 were very low. However, less than half of all people who pass L1 will pass L2, and only half of all who pass L2 will pass L3.
And I know many many finance/accounting majors who are unable to pass even L1 of the CFA exam.
I agree that the content is not particularly challenging or complex. Some of the pension accounting, time-series, and swap valuation stuff was tough. But other than that, there’s nothing really complex about the CFA curriculum. Even the CPA exam was more complex.
However, it’s the sheer VOLUME of the material that makes the CFA exam daunting. It’s like memorizing ABC, and learning ABC very well. Then you try to learn DEF. In the process your forget ABC. So you go back and study ABC again.
Now you’ve forgotten DEF. So you study DEF. Now you remember almost all of DEF and about half of ABC.
So you go on to study GHI, and forget about half of what you know of ABC and DEF. So you now know 25% of ABC, 50% of DEF, and 100% of GHI.
So you go back to study ABC and DEF, which causes you to forget some of GHI. So after four months of study, you know 75% of ABC, DEF, and GHI.
Now it’s April, and you still have to learn JKL, MNO, PQRS, TUV, and WXYZ. Hopefully you will finish them all to leave enough time to do practice exams in May.
That’s why I mentioned most. It’s a minority of employers that force or strongly advise their employees to take the CFA exams once they have 15 years of relevant experience in their line of work.
Funny, in terms of relationship effects, I almost had the exact opposite of what happened to some of you. (We started living together as I passed lvl 2), and she admired my determination to pass level 3 and all the hours I was putting in, staying late after work. Once I did write the exam (and even eventually got the news), I resumed some of my social life (nothing crazy, just a part every other weekend, beers with buddies after work 2 times a week w.o getting fffffed up), and all of a sudden I was an “immature kid who only cares about partying”. She went from a keeper to a buzz kill… Ended up breaking up by October due lol.
Back to the topic of exams difficulty… I wouldn’t call them inch deep, more like 7-8 inches may be? My experience was similar to Supersadface … stick to a schedule 15-20 hours per week - 4 months, last month of practice exams, and you give yourself a good shot. (I failed lvl 2 band 9 after 2 months of studying due to limiting circumstances), the rest was fairly smooth sailing.
I took the exams in my thirties. Simply because I would require most people that I would allow to manage my money to have the charter. I was already managing money and this is probably my last stop, so I didn’t “need” the charter. I may be in the minority, and I’ve said it before, but there is something about having objective evidence of a certain level of fitness in finance and the charter provides that evidence. Even if you’re established in your career and you’re as special as you think you are, the exams should not be that big deal for you. Knock it out. An asset manager should be at least exposed to everything in the curriculum. If nothing else, the program reminded me of how little I do know which is important to remember.
Thanks for your 0.02. I’m surprised Greenman hasn’t introduced himself to you. Maybe you could say hello?
The word among regular members, which has already been mentioned, is that accountants(CPAs and CAs) are notorious for having trouble with the CFA program. Why is that?
^It didn’t escape unnoticed. But since I know nothing about the CA exam, I didn’t feel qualified to comment on it.
Maybe one reason I felt a lot of pressure to pass is because I had a kid and another on the way when I passed Level 3. Skipping out on evenings on your couch watching reruns of CSI is not the same as missing time with your child(ren).
It depends on your background. If you did a finance undergrad, it should mostly be a review and relatively easy to pass if you put in adequate time.
Personally, L1 stressed me out way more than L2 or L3. That said, I majored in engineering and the sheer amount of mostly new material felt overwhelming when preparing for L1. While the L2 and L3 material was more difficult, at least I knew what I was getting myself into and had a better study plan mapped out after L1.
I have an engineering background and those undergrad finance peeps had nothing on me Jack!
On a more serious note, do you think those with a finance undergrad have a higher level 1 pass rate than those with engineering backgrounds? My money would be on my people in a landslide. The curriculum, by definition, has everything anyone needs to know for the exams. Non-finance majors need not be deterred.
If they are on equal footing, both native speakers, give them say 6 months to prepare, I’d say landslide for the engineers and the other more difficult majors. I did econ/pre-med, zero finance classes and I had multiple semesters that were MUCH harder than a CFA level…
To give an example, I had organic chemistry 2, I took it for the first time and nearly half the class dropped before midterms, including me. Since it was the last pre-med pre-req, next semester, I said, I’m going to stick with it and get it done. Went to every single class, TA session. Did all assignments and extra credit. Went to office hours for help. Made an F, like 59 or something, just below D.
On contrast, I got done with CFA level i in december, studied for CFA Level ii in may and got everything >70%. 1 year before that test day, I had no idea what a finance calculator even did or what TVM was.
After looking at the engineering coursework a friend of mine had, it looked as hard or even harder than what I was doing. I would not be very confident going into an engineering program.
I’ve generally been a poor test taker (my SAT and GRE scores have always lagged my peers with similar grades. Yes, I didn’t put in a lot of effort when I failed L1 but it was only after I discovered AF and basically read countless stories and tips for preparation did I manage to pass L1 in 2012… and followed a similar process for L2 and passed last year.