The Chartered Financial Analyst® (CFA®) exam is notoriously challenging. One of the most asked questions of new candidates is, “How much study time do I need to pass?” The right answer to that question is, “It depends… on many personal factors.” Each candidate should evaluate their situation and decide the amount of risk they are willing to take. That would help you determine how much study time is enough for the CFA Level 1 exam.
Here are just a few factors among many to consider:
Solid Finance Education
The amount of time needed to prepare varies a considerable measure based on your educational background. A significant portion of Level 1 material is similar to what you would study in undergraduate finance/economics/stats courses. If you were a top tier finance student, you could spend less than the ‘recommended study time’ (300 hours per Level) and pass with ease. For example, at three hours per day, seven days a week, that’s about 250 hours or 11 weeks. This time commitment could be more than enough to pass for many, but three months would be considered a minimum. Again, this is only a real possibility if you have a strong academic or professional finance/accounting background.
Strong Test Taker
Assessment formats, such as multiple choice and true/false, make it easier for good test takers to “game” the system, using test-taking tricks and strategies to make better guesses. Level 1 is a multiple-choice exam with only three possible answers per question, which is a positive for good test-takers. All this means that while a “good test taker” might score well in a standard multiple-choice test, they haven’t proved their mastery of the information. Here’s what also helps them:
- Low test-taking anxiety, which allows them to perform better in the present moment
- Well-informed schemas, which provide greater context and will enable them to make more educated assumptions (guesses), especially when the test is multiple choice
- Study habits – retrieval practice, repetition, spacing the learning out, etc. – that help them learn, remember and retrieve knowledge more effectively
Lifestyle
Your lifestyle can also be a consideration. The more time you have each week to study, the more flexibility you have. Others who might be working full time, have a family, and social accountabilities have a lot less flexibility. You also have to pick a prep course that offers the platform and content that meets your needs. Many busy people find self-paced digital formats easier to balance versus lectures and lengthy videos.
Risk Level
Preparing for the CFA exam is a big commitment involving time, expenses, and personal sacrifice. Due to the vast material covered on the exams, the CFA® Institute suggests that candidates begin to prepare for each Level at least six months in advance, and recommends approximately 300 study hours per exam.
For many, this is not the endeavor to sacrifice or manage only the minimum study requirements. In recent years, pass rates for the first two levels are well below 50%. The 10-year weighted average CFA® Exam pass rate for Level 1 is 38%, for Level 2, 43%, and Level 3, 54%. It takes the average candidate four years to pass all three levels of the exam and obtain the credential. The data suggests that this is not an exam that candidates should take lightly. A robust preparation program is critical to your success.
Summary:
CFA candidates spent an average of 323 hours preparing for the exams, with Level 3 candidates reporting the most time spent.
If you’re serious about passing the CFA Level 1 exam, you do need to put in the study time. Sure, you could still pass with a shorter study time if you have the right background and smarts, but you would be taking a high-risk route, and have a strong chance of failing.
Sources: https://www.fulcrumlabs.ai/; www.cfainstitute.org
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