5 reasons it’s better to take the CFA® Program exams while you’re still a student

It’s a common dilemma among candidates at university who are considering becoming a CFA® charterholder - should they start the process immediately, or wait until they’re working so they can fulfill the requirements of 4 years’ working experience?

Our advice? Start studying while still in school.

Here’s why:

#1. You have more time

University students - even those in their final year - have way more free time than a working adult. They’ll also have more control over their schedules, since they don't need to report to the office from 9 to 5 (or beyond).

According to CFA Institute, those in the final year of their undergrad degree can take the Level I exam. (You need to complete your degree, however, to take the other two levels). This gives you a precious headstart on the process of getting chartered, and means you have 2 tries to pass the first exam before graduation.

You can tweak your final year class schedule, or see if it’s possible to shift your classes so that you have less modules in final year, meaning more time to study. This flexibility is nearly impossible to achieve once you start work (especially if you then get married or have children!) so make use of it while you can.

Don't believe us? An article by 300hours interviewed lots of exam candidates, and most of them said that they had the most time to study when they were in university, not when they were working.

#2: You have a buffer period in case you fail the papers

One major reason people delay taking the exam is because they need four years of work experience to get the CFA® charter. They think: well, I might as well do it concurrently and only spend four years, instead of five or six, to get chartered.

We disagree. Taking the exams as early as possible gives you a precious one-year additional time buffer.

While it’s the ideal scenario to pass all three exams on the first try, the truth is that only 10% of all candidates manage this.

Here are the passing statistics for the June 2018 CFA Program exam, taken from CFA Institute:

Level I CFA Program exam: 43%

Level II CFA Program exam: 45%

Level III CFA Program exam: 56%

Those aren't the best odds - so you need to account for the chance you may need to retake some of the exams. Since the Level II and III CFA Program exams are only offered once a year, you’ll need to wait an entire year for the next opportunity.

This will be an especially painful sacrifice once you’re working, so take advantage of the additional year you have in university to pass the initial one first.

#3: You have a buffer period in case the job market is bad

Former AB Maximus student and current CFA® charterholder Valerie Fawcett explains why this is important if you’re trying to land a role right after getting chartered:

"Job opportunities don’t always come right after your exams. As you are waiting for the opportunities, you still need to raise your proficiency in financial modelling, report writing, and networking, before getting connected to the right person and ultimately landing your desired job within the investment industry. This whole process of preparation can take a year or two.

Openings for front-office roles depend on a few market forces. First, the stock and bond markets go up and down. This affects the P&L of asset managers. If a particular asset market did poorly last year, they are not likely to hire within the next 6 months… Most candidates do not factor this ‘loss of opportunities’ when wanting to pursue roles in the front office."

In summary, you can't count on getting a job the second you get your charter. It’s better to have the exams down pat and be working to get your career experience requirement fulfilled.

Don't worry - even without the charter, having a exam pass on your resume not only makes you more employable, it also raises your pay: according to a survey of 500 candidates by 300hours, those who passed Level III got 32% more pay, and those who passed Level II got 20% more.

In the meantime, a Level I exam pass makes you stand out from the competition upon graduation.

#4. It’s easier to start while in uni

Since you’re in university, your brain is already in study mode - making it easier for you to get into the groove of studying for the exams. In addition, the environment is conducive - everyone around you is also studying, and there are places like classrooms and libraries to use - making it easier to motivate yourself to prepare.

If you wait until you leave school, you may no longer be in the mood to study - and may find it hard to motivate yourself to study, especially since your free time is likely on weekends.

5. It’s cheaper

If you’re going for prep classes - which are like tuition sessions that help you pass the exam - most exam prep courses offer university students discounts, meaning you save quite a bit.

*Psst! We offer discounts to university and ACCA students. Email us for the discounts list.

Of course, there are always two sides to the coin…

Next week, we’ll talk about the special cases where it’s actually better to wait till you're working before taking the CFA® Program exam. Stay tuned!