CFAI records lowest pass rate (25%) in history. What it takes to ensure you place in the top quartile.
The year 2020 was challenging for CFA candidates with exam deferrals and cancellations disrupting their study plans and this culminated in a record low pass rate for the May 2021 level 1 exam. The CFAI has cited the stop-start nature of candidates' exam preparation as the driving force behind the drastic drop in the Level 1 exam pass rate.
Though this might seem discouraging to CFA candidates, we do not think the deferrals and cancellations alone provide a complete picture of the drop in candidate performance.
In the following section we will outline and discuss what we believe to be the main reasons why candidates fail the CFA® Level 1 exam:
Not completing a sufficient number of practice problems
Lack of a disciplined preparation schedule
Inadequate time set aside to review material and complete mock exams
When covering the curriculum for the first time, it is essential to complete practice problems to reinforce the concepts in each of the readings / study sessions. It has been observed in studies of cognitive behaviour, that humans learn more when they make mistakes, as this reinforces the concepts they have recently learnt. Practice problems also give candidates a better understanding of how these concepts may be tested in the exam. Furthermore, doing practice problems will expose any gaps in the candidate’s knowledge. This implies that candidates do not need to master the reading material before moving on to attempt the practice questions, as the questions themselves serve the purpose of reinforcing the material.
As level 1 candidates are new to the program, they may underestimate the amount of time required to cover the entire curriculum. There are currently 60 readings in total for the Level 1 exam, with the CFAI recommending 300 hours of study time to prepare for the exam. A significant portion of Level 1 candidates tend to be recent graduates, who tend to use a similar approach to studying as what they previously used at university. However, given the breadth of the CFA® Level 1 curriculum, candidates often find themselves overwhelmed with the amount of material to cover in a given period of time. In order to successfully cover the entire curriculum, candidates need to adhere to a disciplined schedule. This can help reduce stress for candidates as the exam approaches by avoiding the added pressure of constantly falling behind and needing to devote more time in their schedule to catch up, while also managing their work and personal commitments.
By following a disciplined preparation schedule, candidates will set aside ample time (roughly at least one month) to review all the exam topics. We also recommend that candidates complete at least 5 mock exams in an exam-like environment. To add further clarification, an exam-like environment refers to not utilizing any notes, formula sheets, or any additional assistance. Furthermore, it would be ideal to try and replicate the computer based exam format while attempting the mock exams. On a personal note, we highly recommend following this approach, as it helped us gain a solid understanding of the material and ultimately pass the exam.
The TFP Approach ensures that candidates will complete an ample amount of practice problems, adhere to a disciplined schedule and set aside a sufficient amount of time to review the material and complete five or more mock exams in an exam-like setting. If you would like to learn more about our February 2022 Level 1 Exam offering which is currently being offered for free, please click here.