After reading this post, you’ll learn:
- why the Level 1 exam passing rate is so low,
- how much time you need to prepare yourself for the exam,
- what is strategic vs. tactical study planning,
- how a good study plan should look like.
Interested in a different study plan? See:
The upcoming CFA Level 1 exam is on 6 June (or 7 June for some of you). Most likely, you have already registered for the exam if you’re about to sit it (if not, make sure you do not miss the standard registration fee deadline passing on 12 February). Now you are probably looking for some extra study materials to match your Curriculum and to get ready for the hardships of your study time. Our new study planner with different study tools and resources inside can definitely be of great help to you here:
|CFA Exam Topic||No. of Study Days||No. of Study Hours||June 2020 CFA Topic Weight|
|Ethics||7 days||21 hours||15%|
|Quantitative Methods||12 days||37 hours||10%|
|Portfolio Management||7 days||21 hours||6%|
|Financial Reporting and Analysis||22 days||67 hours||15%|
|Corporate Finance||7 days||21 hours||10%|
|Fixed Income||12 days||37 hours||11%|
|Equity Investments||12 days||37 hours||11%|
|Derivative Investments||5 days||15 hours||6%|
|Alternative Investments||2 days||6 hours||6%|
|Economics||12 days||37 hours||10%|
Before you get down to work, however, stop for a while and ask yourself one fundamental question, which is: “How do I overcome the low 40% or so passing rate?”. To be very specific, we should also add here that this 40-ish% passing rate is a real value calculated for those who actually took the exam (i.e. it excludes no-shows usually accounting for as much as 20-25% of all registered candidates).
Why Is the Passing Rate for CFA Level 1 Exam So Low?
Possible causes of the low CFA Level 1 passing rate can be many. Difficult financial concepts, some complicated or tricky exam questions, limited time you can approximately spend on one exam question, the minimum passing score set at a high level, or even the advanced English (being often an obstacle to non-natives).
Undoubtedly, all these count but the real culprit here may be still at large.
We failed to mention the bulk of study material that every CFA candidate has to go through.
Just have a look at the CFA Curriculum. These are 6 books, hundreds of pages each. To read it all from cover to cover, you need a lot of time. Don't even mention understanding what you’ve read.
I would call CFA level 1 exam conceptual ‘cos it verifies your general knowledge and understanding of finance. It may be a good idea to focus on particular concepts required in the exam and to make sure you get them right. To reach this goal, you may consider taking advantage of numerous study materials available online that will naturally facilitate your uptake of the obligatory dose of knowledge.
Studying For the Exam – How Much Time Do I Need?
It is said that an average candidate needs around 300 hours to get well prepared for the CFA Level 1 exam. Of course, it is a mean value and it need not apply to you. From my own observation, I can tell that some candidates will be fine with only 150 hours of preparation (which is extremely rare), but there will be those who will need to spend even 600 hours before they pass their exam.
For example, if you work in finance, you studied finance at university and you like to test yourself, you will probably find 300 hours just enough. If, however, you define yourself as a finance greenhorn, you barely fancy poring over the books or you wish to change your field of specialization (of which taking the CFA exam is only a step), you should allow for more than 300 hours of preparation.
It is very important for you to be able to estimate the number of hours you’re going to need for your exam prep. This estimation would allow you to see what’s the average time you should spend studying per month, week and day.
This is where our study planner comes in handy. If you set up your personalized study plan now, you'll get around 300 study hours divided into roughly 4 months. This time is so arranged as to allow for all 10 topics and a proper revision before your exam. You'll be given the average study time per week plus an estimated time for every reading. With this knowledge, it is easier to see how much time you need to study on a daily, weekly, and even monthly basis.
My advice is that you treat these estimations as a benchmark to lead you through your exam prep but allow for some extra hours in excess of your staple preparation time. What I mean is that I haven’t met a person who would say they are fully prepared for the exam or that the exam is just in time for them.
What Is Strategic Study Planning?
How About My Tactics?
When preparing for the CFA exam, you have to tackle the issue both holistically and atomistically. What it means is that, on the one hand, you need to establish how much time overall you’re going to devote to different topics, mock exams, revision, etc. and when. On the other hand, you should be able to systematically adapt your schedule and make plans for shorter periods, usually for the upcoming week. The former, I call general planning strategy and the later – detailed tactics.
Below, you will find a hint at how to handle strategic study planning (in the form of CFA level 1 4-month study plan). As for tactical planning, you'll be in better control of your every study week if you opt for your own personalized study plan using our app:
Before we move on to a sample 4-month study plan, there is one more piece of advice:
Have a look at the concepts of forgetting curve and learning curve - they may actually give you some idea about what your CFA exam prep should look like in order to be fully successful.
Study Plan Assumptions and Timing
We begin our sample 4-month level 1 study plan on 3 February and end it on 5 June, i.e. the day before the exam. The last three weeks are devoted to Final Revision, when you should try to do as many mock exams as possible.
The study plan is divided into topics (4 Study Blocks) and I believe that the sequence is just optimal. More challenging topics are coupled with more easy ones allowing you to take a sort of a break meanwhile. Also, where possible, topics are coupled based on the similarity of concepts. Last but not least, the most important topics - i.e. Ethics and FRA - are scheduled relatively upfront to ensure they are thoroughly studied. The time scheduled for each topic depends on its difficulty, the number of pages in the Curriculum and the number of questions devoted to the topic on the exam:
START on 3 Feb 2020
1st Study Block (3 Feb – 2 March)
- Quantitative Methods
- Portfolio Management
- QM+PM Review
2nd Study Block (3 March – 4 Apr)
- Financial Reporting & Analysis
- Corporate Finance
- FRA+CF Review
- QM+PM Review
3rd Study Block (5 Apr – 26 Apr)
- Fixed Income
- Equity Investments
- FI+EI Review
- QM+PM+FRA+CF Review
4th Study Block (27 Apr – 17 May)
- Derivative Investments
- Alternative Investments
- DI+AI+ECO Review
- Ethics Review
FINAL REVIEW (18 May – 5 June)
END on 5 June 2020
June 2020 4-Month CFA Level 1 Schedule
|Topic (Level 1)||Deadline (June 2020)|
|Ethics||9 Feb 2020|
|Quantitative Methods||17 Feb 2020|
|Portfolio Management||29 Feb 2020|
|QM+PM Review||2 March 2020|
|Financial Reporting and Analysis||22 March 2020|
|Corporate Finance||29 March 2020|
|FRA+CF Review||4 Apr 2020|
|QM+PM Review||4 Apr 2020|
|Fixed Income||12 Apr 2020|
|Equity Investments||20 Apr 2020|
|FI+EI Review||26 Apr 2020|
|QM+PM+FRA+CF Review||26 Apr 2020|
|Derivative Investments||1 May 2020|
|Alternative Investments||3 May 2020|
|Economics||15 May 2020|
|DI+AI+ECO Review||17 May 2020|
|Ethics Summary||17 May 2020|
|Final Review||5 June 2020|
If you set up your personalized study plan,
the deadlines will get adjusted.
Below you can see both calendar and weekly view of your 4-month study plan:
Study Plan: Calendar View That’s where you can view all the weeks of your CFA exam prep to see how much you’ve done and how much is still ahead of you.
Your Current Week View You will be asked to focus on your current week of studying. You will know what to study, when to study, and how much to study. At the end of the week, your hard work will be evaluated (hit the ‘Sum Up Current Week’ button).
Editor's Note: This post was originally published in December 2012 and has been updated for accuracy and comprehensiveness.