top of page

Want to pass all three CFA® Program exams on your first try? Note these 3 pitfalls!

Being able to pass all CFA® Program exams on your first attempt will make you stand out from other candidates statistically. Only 10% of total candidates can pass Level I exam in 2015, Level II exam in 2016 and Level III exam in 2017 in their first attempts. Therefore passing all three levels of the CFA® Program exam at one go is a good filter for hiring managers.

As someone who has passed all three levels at one sitting, and seeing where others have failed to do so, I’ve decided to pen down my experiences to share with young mentees. This is not meant to boost my ego, as certs and titles mean less to me now, as compared to work accomplishments and contributions to society. At this stage of my life, I pen down my experiences because I enjoy mentoring young people who are seeking guidance on front office roles in investments.

What are the odds of clearing all 3 exams in the shortest time?

The passing rate for Level I exam has improved over the years based on statistics released from CFA Institute. However, I have little doubt that the statistics for passing all three levels at one sitting (for each level) has changed little.

CFA Institute provides a detailed passing rate for each level and each year. The average passing rates for Level I, Level II, and III over the past ten years are around 40%, 44% and 52% respectively.

Source: CFA Institute

For those who’ve set their mind on getting the CFA® charter in the shortest possible time, read on. In my experience, there are predominantly three pitfalls that hinder candidates from passing all three levels on their first try.

#Pitfall 1: Penny wise, Pound foolish on exam prep classes

If you think you are saving money by studying on your own, think again! You may save money, but are you saving time? There are some candidates who refuse to spend a dime on getting good course providers, even at Levels II and III. They think: “Oh, I can study on my own because my teachers already covered these in school”, or “I’m smart enough to figure these out on my own”.

If you have taken a peek at the Level II curriculum, you will know that it covers many complex topics, including pension accounting, valuing interest rate/currency swaps, and Black Scholes pricing for derivatives. Based on my experience, pure memorization does not work. Only those who can understand and apply these concepts during exams can they do the exams questions quickly and confidently.

After studying Level I of the CFA Program exam on my own, and factoring in the demands of my day-job, I decided to pay for classes from external providers for Levels II and III. The decision was a good one because the lecturers gave me more in-depth and real-life understanding of these subjects. Secondly, my course providers helped reinforce important concepts towards the exams and provided me with mock exam settings to help me prepare mentally and physically.

#Pitfall 2: Forgetting to calculate the BIG opportunity costs of failing

As the CFA Institute allows candidates to sit for the exams multiple times, this may lead some young people to have the false sense of security. The false sense of having all the time in the world.

“If I don’t pass it the first time, I can just retake it”.

Assuming you start taking your exams at age 25, and you take 5 years to finish all three levels of exams due to re-sits, you will be 30 years old by the time you finish. Unfortunately, 30 is the common cut-off age where most employers hire junior analysts or research associates.

If you passed all exams before your 30th birthday, you have a longer window of being hired. Why do I say this? Say you finished all the exams at age 27 but the job market for the front office is not good that year. You can stay on in your current job and look out for openings the next 2 years. But if you only finish your important exams at age 29, your window of opportunity becomes much shorter. If the job market does not pick up in 1-2 years, your chances of landing front office roles become much lower, assuming all other things are equal (i.e. other applicants have the same qualifications and experience as you).