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CFA Prep: The Science of Study Groups

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CFA Exam PrepPreparing for the CFA exam is a daunting process: not only do experts suggest that candidates put in hundreds of hours of study time for each level of the exam, but also the numbers show that even if you put in that kind of time there is no guarantee that you’ll pass. The good news, however, is that you don’t have to go it alone. The old adage claims that two heads are better than one, but don’t just trust the old wives—there’s scientific evidence to back it up.

A number of studies spanning a variety of academic fields lend support to the idea that study groups really do help. One researcher, for example, found that the undergraduate students he mentored did, in fact, do better in the classes for which they had formed study groups. While the research was not thoroughly scientific, the author noted that he saw these results time and again.

Louise Howard, CFA, CAIA, a senior investment analyst at the YMCA Retirement Fund, has served as NYSSA’s study group coordinator since 2009. Howard participated in study groups while preparing for all three levels of the CFA exam and experienced the benefit of study groups firsthand. “The passing rate of our group for each level increased at each level from 85% for the Level 1 group to 100% for Level 3,” Howard said. “Most of the original group passed all 3 levels [in] the first sitting.”

While study groups can help candidates, Howard was careful to point out that participation in such a group does not guarantee success, noting that, “a candidate’s passing rate is much more correlated with their mental preparedness for the amount of time that will be required to get a thorough grasp on the body of knowledge. It requires a lot of personal sacrifice. You may need to miss family events and social gatherings for a prolonged period of time to prepare.”

CFA Study Groups

Despite the fact that candidates may miss out on certain events, there is a special camaraderie to a study group, one that can help push members to succeed. Additionally, studies on anxiety and test taking have shown that membership in a study group can actually help reduce or eliminate anxiety. This not only has consequences for test day, but also for studying: worrying about the exam is just another way to procrastinate, the anxiety distracting from the more important business of actually learning the material.

Small groups—with three to five members—have been shown to facilitate complex problem solving. Collaborating and looking at problems and topics with peers may help reveal something that an individual might overlook. While larger groups can work, many sources suggest that insights in George Miller’s seminal paper “The Magical Number Seven, Plus or Minus Two” can be applied to groups, meaning that optimal group size should have an odd number of members (i.e., five, seven, or nine). This way there can never be even divisions on any topic, and the group isn’t too large and unruly to organize effectively.

Even if you’re already enrolled in a test prep course and reviewing the material on your own, joining a study group could make the difference between passing and failing. It has been shown that when students are actively engaged in their studies they recall more of the material, and have a higher level of understanding, than if they learn it passively. By collaborating and discussing, students in study groups form relationships with the material, taking it off the page and exploring the subject more completely.

The downside is that if a study group is poorly constructed it can very well be a hindrance to some members—but the benefits usually outweigh these potential downfalls. A disorganized group of slackers probably won’t get much done, but a well-organized study group can be a major asset to any test taker.

Mitchell Geller

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This was a very informative article. From past experience, I can understand how much a study group can improve your chances of passing an exam. I've been looking at CFA courses for a while now, and I'll definitely be applying. I'm the type of person however that really requires to be prepared, so as not to be anxious.

Thank you for this, and keep up the good work. I hope to hear more from you in the near future!

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