By Jason Moschella, PhD (ABD), CFA, CMA, PRM
I often joke with my students about their voluntary commitment to long periods of suffering when registering for the CFA exams. I remember navigating the rigorous elements of the program, passing Level 2 with some difficulty in 2006, then failing Level 3 in 2007. At some point in 2008, on my second attempt to pass Level 3, all the questions started to look the same. I spent every day in May studying for 8 hours a day. Needless to say, exams are no picnic and preparation is inevitable - preparation that requires between 200 and 500 hours of study per exam. However, this doesn't mean that every minute spent on this task has to be tedious.
In the four years I've spent running McGill's CFA Level 1 exam preparation program, my colleagues and I have come to understand that all this suffering is a result of a lack of knowledge and experience. avoidable! In our opinion, one of the most important factors for success is to know what kind of student you are, and above all how you learn best.
Do you know yourself well enough?
Knowing your customer is one of the key principles of portfolio management. You need to clearly define the goals, limits and particular circumstances they face, because the advice you give must be tailored to their situation. Why not apply these principles to your study?
According to a recent survey conducted by CFA InstituteOn average, candidates spend 300 hours preparing for each exam. Yet the time you investment will vary according to your experience and your situation. So, if you're in the final year of a bachelor's degree in finance, devoting 300 hours to Level 1 and Level 2 exams seems rather extreme, since many of the concepts overlap with the CFA program and the material covered in the bachelor's degree. Compare this situation with that of an employed professional outside the investment field who wants to launch a new career in finance, but has never seen an income statement or balance sheet. In reality, those 300 hours of compulsory study could double, as this person has to learn the jargon of finance.
We haven't yet reached the point where we can download knowledge directly into our brains, as Neo does when he learns kung fu in The matrix. We also know that there's no one-size-fits-all way to learn effectively. Indeed, CFA exam candidates use a variety of resources as part of their study plan. Appearance and presentation are important: some people succeed with theoretical explanations, while others prefer concrete applications of concepts. In addition, some people work well with individual reading, while others are more pragmatic and prefer more realistic situations, such as case studies or laboratory work. Personally, I prefer to study on my own, although I recognize the value of participating in a course or group, such as our CFA Level 1 exam preparation program and the structure, solidarity and accountability it imposes on candidates.
A final word of advice: know your product, i.e. what you need to succeed on exam day. The CFA Institute doesn't care what points you accumulate (except for ethical reasons in borderline cases). All that matters on exam day is that you do well enough to get a passing grade. Exploit your strengths and turn your weaknesses into factors that won't destroy your chances of success.
Reference : June 2018 CFA Program Candidate SurveyCFA Institute. Accessed January 13, 2020.
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