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Should I Study for the CFA® Exam on My Own?

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This question comes up often among candidates sitting for the CFA® exams.  

The answer is simple:  NO!

The CFA exam is unlike any other exam you will take  Annually, many competent professionals around the world study for the exam on their own, sit for the exam, and fail. The pass rates prove it —they are low —at each level around 60% of the candidates who actually sit for the exam do not pass the exam.

(FYI, the 60% fail rate does not include candidates who registered for the exam but did not sit for it; if those candidates were included the fail rate at each level would be even higher). Many candidates are a bit naive and approach the CFA exam like other exams they have taken in the past – if they study for the exam how could they not pass it—so why worry?
The CFA exam at Level I and II tests candidates knowledge along many diverse areas – Financial Statement Analysis, Derivatives, Portfolio Management, Corporate Finance, Equity, Fixed Income, Alternative Investments, Ethics, Quantitative Methods, and Economics.  There is no candidate that comes into the program with strengths in all these topics. Candidates should use any value-added resource they can to help them increase their odds to pass.
The truth is candidates should understand that they are spending a lot of time, energy, and money to pass any CFA exam but that does not guarantee they will in fact pass the exam. Retaking any CFA exam is costly from both a mental and financial standpoint.
An often overlooked fact is that many candidates only use the CFA curriculum readings and still don’t pass the exam —they did not use all the resources available to them. They came into the exam room unprepared because they read the materials but did not do much problem solving.
In my opinion, 50% of your success in passing the Level I exam is doing “appropriate” problem solving questions; it is 60% at Level II and it becomes 70% at Level III.
The issue is that CFA Institute does not, for the most part, release its questions from previous CFA level I and II exams, and only releases the essay part of the last three years’ exams at Level III.  So, candidates have very little to look at to improve their problem solving skills.
NYSSA has addressed this concern to enhancing candidate’s problem solving skills—they have instituted full-day problem solving workshops to simulate the real CFA exam environment. It is not another mock exam!
Candidates come in and are presented with CFA type problems in the format of the real exam.  They are timed in how they respond to questions in all the areas of the real exam to enhance time management skills.  After the instructor calls “TIME” for each section of questions, he reviews each question and shows the appropriate technique to approach the question, explains why the correct answer is correct and why the other choices are wrong.  It is a real learning process.  It is an 8-hour eye opening session that enhances a candidate’s ability to pass the exam.  
The CFA exam is not a game—it is a well-designed exam and many of the alternate choices given as potential answers are based on mistakes many candidates can make to arrive at answer. Many candidates expect a quasi-definitional exam that is right out of the course materials. The exam questions integrate the curriculum materials and require a good dose of critical reasoning to solve.
These problem solving skills are not taught in the CFAI curriculum or in any prep provider’s materials.  It can help a candidate distinguish themselves from others on exam day.
That’s one reason you should not rely on studying on your own!

–Nathan Ronen, CFA

Have a CFA prep question? Send it to the editor, and we will ask one of our CFA Prep Instructors. Please include your name and whether or not you are a Level I, II, or III candidate (if applicable). Questions can also be kept anonymous. O. Nathan Ronen is the lead CFA instructor at NYSSA and has helped over 20,000 candidates to pass the CFA exams. He has been teaching CFA Levels I, II, and III for over 16 years and has a unique understanding of each level. Ronen’s knowledge and real-world finance experience helps bring the theory to life. Ronen worked as a supervisory analyst training government regulators, an accounting analyst, and a corporate finance analyst. Ronen has also taught in-house CFA seminars at Goldman Sachs, Merrill Lynch, Citigroup, and many other major financial institutions. He holds an MBA in finance and accounting from the University of Chicago.

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CFA® Level I 4-Day Boot Camp

Thursday November 12, 2015
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CFA® Level II Weekly Review - Session A Monday

Monday January 11, 2016
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CFA® Level III Weekly Review - Session A Wednesday

Wednesday January 13, 2016
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CFA® Level III Weekly Review - Session B Thursday
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Thursday January 26, 2016
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