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What if You Fail the CFA Exam?

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CFA Exam PrepSome readers thought I was being a little harsh when I advised candidates that they shouldn't expect to pass the CFA exam the first time around. But, sadly, it's a fact that most candidates will fail the Level I exam. The numbers improve slightly as candidates progress, with nearly half of test takers passing Level II, and slightly more than half passing Level III. It can be a real blow to discover you failed, but heading into the exams knowing that you might have to take them more than once will make it easier for you to bounce back.

There's no shame in retaking a level; in fact, some professional CFA instructors and some of the biggest names in the industry didn't pass one or more levels the first time around. In fact, of the 64,007 registrants for the June 2011 Level I exam, 35% were retaking the exam after a previous attempt, according to CFA Institute. 

“I put in much more than 250 hours for Level II and did not pass the Level II exam the first time around,” one CFA charterholder said at NYSSA’s 2010 Level I Orientation. “I realized that there’s some kind of mechanism here that it’s not just how much you know the material or how well you know the material but how you’re able to convey that or apply it to the exam question. So I learned how to take the exam correctly [with the help of an instructor], and the second time around I succeeded.” 

The rigors of the exam are what gives the CFA designation its value. If it was easy to get, it wouldn't confer such prestige.

So, if you've failed a level, how do you move forward? Instead of fretting over your results, take a thorough assessment of what went wrong by asking yourself the following questions:

  • How many hours of study did you put into the exam? According to the CFA Institute, successful candidates report that they put in a minimum of 250 hours studying for each exam. Depending on your personal strengths and weaknesses, some levels may require more time.
  • What was your study strategy? Did you tackle the curriculum on your own or did you take a course? If you took a course, how diligent were you in attending class and completing the recommended exercises? Did you study alone, or did you make use of study groups
  • What were your study habits like? Given our busy schedules, it takes a great deal of discipline to reach 250+ hours of study. Blocking out time in your schedule may be helpful, but current research indicates that mixing up the places where you study helps you retain information. Some of the common "wisdom" about memory and studying is actually at odds with current research
  • Did you focus on just the curriculum, or did you also learn about the structure of the test? The trick to passing any test is to not only know the content but also what the graders are looking for. For example, in Levels I and II, how much time should you spend on each question? Is it better to guess if you don't know the answer? What's more important in the Level III essays—quality or quantity? Are the graders looking for a specific answer, or do they just want to see if you can apply the knowledge you've gained?  

Once you've completed an assessment of your approach, it should be clear how to move forward. Maybe you simply didn't put enough time in. Maybe you need to adjust your strategy or learn more about the exam itself. Whatever got in the way this time around, address it and move forward. There's no shame in needing to repeat a level, and the benefits of earning a CFA designation are worth the effort. 

Jennifer Curry

CFA Level I Sample Classes

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