Tips for Taking the CFA Exams

If you are planning a career in the investment or finance industry, you might want to consider becoming a CFA charter holder. The CFA program consists of three graduate-level exams. The exams are difficult, as indicated by Level I exam pass rates in recent years of only 34% to 46%.

Proper preparation is key to success on the CFA exams. Based on my experience, here are 11 tips for preparing for the CFA exams.

Sign up Early. Sign up for each CFA exam early so that you obtain the study materials as soon as possible and allow yourself the maximum amount of time to prepare. According to the CFA Institute, successful CFA candidates spend an average of 300 hours on preparation so the sooner you get started the better.

Have a Plan. Set aside time each week for exam preparation, especially if you are working. Cramming for a CFA exam in the final weeks and pulling all nighters may work for a few, but you are more likely to absorb the material on which you will be tested and, therefore, to improve your chance of passing if you study consistently over a longer period of time.

Start by Reviewing All the Relevant Materials. Start your study program by quickly reading all the material provided for the exam. At this stage, don't worry about taking notes or absorbing every word. Rather, this review is to give you a sense of the scope of material on which you will be tested, which is extensive. I found this was very helpful because it helped me to devise a study plan based on my own strengths and weaknesses with regard to the topics to be covered.

Take Advantage of Study Tools on the CFA Institute Website. Review the information on the CFA Institute website at www.cfainstitute.org and take advantage of the study tools there, including study session outlines, learning outcome statements, sample questions, topic outlines, and exam topic area weights.

Network. Network with others who have taken the CFA exams and ask them for their top tips for success.

Consider Joining a Study Group. Although I did not join in a study group when I took the CFA exams, many of my friends who participated in the program found study groups invaluable. Look for a group that meets on a regular schedule and that is well organized and disciplined so that the time spent there is productive.

Consider Taking a CFA Review Course. Review courses range from multi-day, immersion-type seminars to more casual, hit-the-high-points classes. I took a review course prior to taking each exam. Mine was the more casual type attended by candidates for all three levels of the CFA exam. I found it invaluable, mainly because it helped me identify and focus on those topics most likely to be extensively tested on the exam and on those areas where I needed extra work.

Know the Ethics Material. Ethical and Professional Standards is one of the largest single categories of material in the CFA Level I exam, generally accounting for a weighting of about 15%. Only Financial Accounting and Reporting, which is a sub-category of Investment Tools and has a weighting of about 20%, counts for more on this exam. Therefore, be sure to review and understand the ethics and professional standards material well.

Be Calculator Proficient. If you will be using a new calculator when taking the exam (only specified calculators are allowed), purchase it well ahead of time. Then practice with it so that you are proficient with the functions that you will use on the exam.

Take Time Off Prior to the Exam. If you are working, try to arrange to take at least a day or two off just before you take the exam. Even if you feel well prepared and don't need to do extensive last-minute cramming, you will feel more confident on exam day if you have had some unpressured review time those last couple of days.

Be Well Rested and Well Prepared on Exam Day. Give yourself the best chance of doing well on exam day by getting a good night's sleep the night before, having all the materials that you need for the exam (admission ticket, identification, calculator, etc.) ready to go in the morning, knowing how to get the exam location and where to park, and allowing plenty of time to get there promptly, even if there are traffic delays.

Sources:

William Artzberger, CFA, www.investopedia.com, Pass Your CFA Exams on the First Try

www.cfatips.com, CFA Exam TIPS/Schwezer Exam Prep Notes/Practice Exam