I wanted to wait till I pass the
CFA level III exams before I write this. But then I remembered how when I was
preparing for the level I exams, I knew no family member, friend who had
written this exams before that I could go to for him/her to give me some tips.
So in this post, I will tell you
some of the things you need to know before you go into the exams room to write
the level I and II exams and some tips in preparing for them.
But first, my story:
When I was about completing my
master’s degree, I came across CFA on the internet. After graduating, I
registered for the level I exams. I wrote the exams on 5th December 2013; the
results came out on 29th January 2014 and I failed with band 9. I do remember
that I cried. But then I could not blame anyone because I underestimated CFA
and did not study appropriately. The very next day I went back to studies with
a different approach. I wrote level I again the day my elder brother got
married on 7th June 2014. The results came out 29th July 2014 and I passed. I
registered for level II immediately; sat for the exams on 6th June 2015 and
again I passed. Currently, I am preparing for level III.
Now here are some of the things
you need to know and some tips.
1. CFA
exams are different from any academic exams you have ever written. For me
personally, university has been the easiest part of my educational life. I
remember how I always started studying a week prior to exams by just going
through my notes and recollecting the lecturers’ explanations. I graduated with
a cumulative GPA of 3.05. The only time I really felt I had put in a lot of
effort during my university time was for my thesis in which I scored 85%. But
then CFA isn’t like university. Well no one told me. I thought I could manage
my way out as usual. But in most professional exams, it is either you know or
you don’t know. If you are going to pass the exams, you need to read,
understand what you read, practice and master it. No two ways about it.
2. Do
not underestimate the exams. This is a sequel to the first point. I thought it
was manageable. I told myself no matter what, I will be able to answer
correctly most of the questions until I tried my hands on the mock exams and
realized I was doomed. I wasn’t even able to score 50% both in the morning and
afternoon sessions of the mock exams. The exams questions are tough as nails.
Do not expect to have easy questions. After writing the exams, I prayed for a
miracle for me to pass the exams. But then nothing could be done.
3. The
fact that you are already working in an investment firm, does not mean you will
automatically pass the exams. I know candidates in the investment industry who
are having a tough time trying to pass the exams. You will agree with me today
that lot of things are computerized. Most investment professionals have the
formulas they use in software and just need to enter the data for it to be
processed. But then you cannot go into the exam room with a laptop. You will
need to know all those formulas off head and review all the concepts mostly the
ones you are familiar with because that is the tricky part.
4. Start
studying on time. Do not postpone the time you are going to start studying. Do
not procrastinate. Start now to avoid last minute pressure and not being able
to finish the curriculum. I heard a CFA candidate saying a friend of his
started studying a week prior to the level I exams and he passed. He did the
same and he failed. It is only possible to pass the exams with a week
preparation if you are a student or just graduated and the finance course was
specially designed to prepare you for the level I exams. Some universities do
that. And yes, the candidate was fast to add that the friend had just graduated
then.
5. You
will need to be organized in order to pass the exams. You will need to be disciplined
to stick to your study program. If there is something CFA exams has taught me,
it is to be a disciplined person. If I want something, I need to work hard
towards it and there are no two ways. If I fail, it is because I did not work
hard enough. You will also have to be focused because that is actually what
will keep you going. For the next how many years until you finally pass your
level III, you will have to sacrifice your weekends. I missed my brother’s
wedding because I was writing exams on that day. Some family members and
friends might not understand you and might think you are over exaggerating the
difficulty of the exams. You might end up with little to no encouragement.
Therefore you will need to encourage yourself. If you are working and also a family
person, then it makes it even harder for you trying to combine these three
things. You will also have burn outs when you get to difficult topics and you
are not able to understand what you are reading especially the formulas.
6. Track
your progress. Personally, I had a book in which I had written all the topics,
the study sessions and readings. Whenever I finish a reading, I tick. When I
finish a study session, I tick. When I finish a topic, I tick. I then calculate
the percentage of completion. It motivated me and alerted me if I am behind
time. CFA has an online study planner. You can try that.
7. Do
active learning not passive learning. Do not just read or listen or watch.
Truth is you would have forgotten more than half of what you read on the exams
day. Be interactive with your study material. Personally I read and then write down
a summary of every paragraph by paraphrasing it in simpler words, using
drawings in order to be sure that I have understood what I have read. Then on
two weeks prior the exams I go through my summary. I also make sure I answer
all the practice questions in the curriculum and do the mock exams; no matter
how difficult the question is and even if it takes me an hour. It is better
than to rush reading and go to the exams room to meet the same question with
just a change in figures and then you are not able to answer because it is too
difficult.
8. The
study material you use can make or break you. I cannot tell which study
materials are good or bad. I can only share my experience and that of the
people I know. A study guide can work for you and not work for me. I have used
CFA curriculum throughout. Nothing more nothing less. According to CFA
institute, every question in the exams will be in the curriculum. I know two
CFA candidates who are both using other study materials. One passed the level I
after three attempts. We wrote the level II together and he failed. Another
wrote the level II for the third time in 2015 and he failed again. I have also
read other candidates who never opened the CFA curriculum but have passed the
exams. According to a CFA charter holder, other study guides are good for level
I and II. But for level III it is very risky to not use the CFA curriculum and
you should combine both by at least reading the LOS, working the questions in
the examples and practice questions.
9. Do
not overlook topics. Don’t see a topic as your strong point so because of that
you will not study it. Do not also think that because a topic carries a small
weighting you will not study it. Finally do not also think because a topic is
tough you will focus on the easy ones. Personally the most challenging topic
for me in both level I and II has been quantitative methods. It is actually the
last or last but one topic that I study. When I read it, I feel like I am
reading Chinese. I do not understand what I am reading but then I write my
summary and go through it a day or two before the exams. Even when I failed the
first time, I got above 50% in it. When I passed level I and II, in both I got
above 70% in quantitative methods. What am I driving at? The topic that I see
as tough and do not place high hopes on scoring much in it, it ends up becoming
one of my best performing topics. So do not overlook any topic. Your strongest
topic can disappoint you just as your weakest topic can favor you.
10. Ethics
and Professional standards is the diciest topic. I advise it should be the last
topic you cover. Why? Trust me if you start with that, you would have forgotten
everything you learnt on the exams day. But if you do that like a couple of
weeks prior to the exams, it will be fresh in the memory. Also it is the only
topic that remains somehow the same across levels. Believe when I tell you this
topic can make or unmake you. Lastly do not think that just because you are
ethical, the answers are going to be intuitive.
11. Alternate
between relatively tough topics and relatively easy topics. If you go through
all the easy topics before you go to the tough ones, you will have burnouts
when you get to the tough ones and might even feel like giving up. If you also
go through all the tough topics first, it might slow your progress. If you start
a topic and it looks tough, go to the next one and come back to it later on. I
remember for my level II, fixed income was the third topic I had planned to
study. But then when I started it, it became confusing for me so I skipped it
and went on to study corporate finance. It ended up becoming the last but three
topics that I studied. I scored above 70%. The only time you should delay on a
topic you do not understand is when you have covered every other topic and it
is the only one left.
12. Do
not jump paragraphs. I remember how I jumped a paragraph, and on exams day, a
question came that was based on that paragraph. I tried so hard to remember but
since I didn’t read it, there was nothing to remember. I missed 3 points that I
could have easily obtained.
13. Reward
yourself after you cover every topic. A night out with family/friends will do.
The next topic you will be covering might be tougher than that which you are
done with. So refreshing yourself before you move on will do you a lot of good.
Also, if you are reading and it is like you are not understanding what you are
reading because you have been reading for long, take a break and watch some
movies to refresh before going back. Sometimes even walking around the house
and coming back to study helps a lot. Browsing through your Facebook newsfeed
also does some good. Personally, I usually have music or radio in the
background. The idea is to refresh yourself so that you do not get bored.
14. When
you fail, change your study methods. Do not make the same mistakes you
previously made. If you did not start on time, start on time. If you did
passive learning, do active learning. If you did not use the right material,
change it. Learn from your mistakes and never make them again. My supervisor
said the only time you fail a professional exams is when you do not write it.
Remember I said when I failed, I cried. But then I learnt from my mistakes and
changed the methods.
15. When
you pass, celebrate it, because the next level will be tougher and it is how
you felt when you passed the previous exams that will keep you going. If you
passed level III, celebrate even more because getting finally the CFA charter
designation is another journey because of the requirement.
16. You
will need 48 months of relevant working experience. Just having any job is not
enough. Four years as a bank teller is irrelevant. As you are studying and
working towards passing your exams, think also about getting the relevant
experience. It can be frustrating having passed all the levels and you are not
eligible to the charter designation.
17. Passing
the exams will not automatically land you a job. Therefore when writing your
CV, cover letter or at an interview, avoid centering all your knowledge,
competence, and achievement on the CFA. Even CFA says it is wrong for you to
claim that because you have passed the CFA exams and/or have the CFA
designation you are more competent than the other person who hasn’t. Therefore
referring to your CFA candidacy/designation once in an interview/cover letter
is more than enough. Let the knowledge you have acquired through the exams give
you confidence to answer questions without over stressing on the CFA. You do
not need to tell the interviewer, he/she will draw the conclusion him/herself.
The list of
things to know and tips is definitely not exhaustive. I hope this short one
helps you. Until the first Saturday, happy studying.
