4 Time-Tested Tips for Passing the CFA Exam the First Time

You'll need time, commitment, and patience to pass each of the three levels of the Chartered Financial Analyst exam, and even the most intelligent and experienced candidates have been known to be ensnared. The exam has a low overall pass rate of roughly 40%, as you may be aware.

If you are not prepared, you will not be able to make it. You can improve your chances of passing the CFA exam the first time by following the advice of some of our in-house experts.

Make the most of the (300+) hours you have available.

Wiley CFA Exam Review can help you figure out the workload you'll be dealing with. According to the CFA Institute, candidates spend an average of 307 hours studying for each level of the exam. Your first destination should be the Institute's current exam schedule.

Of course, the amount of preparation you'll need will differ depending on your previous education and experience; you'll have to examine your own needs. "We're not talking about community service here," one Analyst Forum commentator put it. "Everyone learns at their own speed and at different levels." It's about the work's quality, not the number of hours put in."

300 Hours is a useful spreadsheet for creating a basic study timetable that ensures you cover all of the material before the exam.

Make sure you leave time in your study schedule for any unforeseen life events, and that you and your family are ready to deal with the exam's enormous (but temporary!) time commitment.

Keep track of your progress—all of this knowledge may come to you slowly at first, and you could hit a snag or two. You might even consider ripping out your eyeballs from time to time. Keeping track of your progress, whether in Excel, an app, or on paper, will allow you to see how far you've come and how far you still have to go.

Determine your preferred learning method.

Let's face it: if you want to pass this exam, you'll have to put it at the top of your priority list. It is vital that you have a place where you can study the material effectively. Some candidates have access to a home office or spare room, or they can return to work and study during the evenings and weekends. Others may find that a quiet coffee shop or library is sufficient—one individual even discovered that the 10-hour train rides he had to take to and from Paris on a daily basis were great for hammering down Fixed Income. If you're going to study somewhere, be sure it allows you to work uninterrupted and to a good standard. So, what if that means hiding in your parents' basement for a few months or turning into a library zombie?

Many applicants choose to take live classes. True, such classes make it easier to form study groups and remain on track with your studies, and they can also be a great way to meet new people. A good teacher can also find ways to simplify the subject and properly explain challenging concepts. Others, on the other hand, believe that self-study or online classes (especially if Peter Olinto is involved) are just as helpful, especially if lessons take a long time to get to or if they are already familiar with sections of the subject. It really depends on your situation; you might want to talk to other current charterholders in similar situations to see how they studied and if they'd do it the same way again.

A few exam candidates have gotten by with simply the CFA Institute's own curriculum, but it's hardly worth the effort. A good review course will help you understand the material and bring it to life. No course, however, can ever be a complete substitute for the curriculum.

Don't panic; prepare a month ahead of time.

This exam is difficult to prepare for. There's simply too much material to study in the weeks coming up to the exam to justify undertaking a huge cram session. It's a good idea to finish your studies about a month before the exam. With the remaining time, take practice exams, revise, and concentrate on difficult topics. An example of a game plan is shown below.

When creating mock tests, aim to be as realistic as feasible. Allow yourself the same amount of time and use the same calculator as on exam day (use it through all your studying).

In the weeks coming up to the exam, make sure you're completely conversant with the CFA's guidelines (and that you know how to avoid the troubles that other test takers have had).

Don't forget about ethics as well!

Candidates have been known to be a little cocky about the Ethics section, perhaps because they think it's just common sense. But don't go through with it. According to a June 2014 CFA Institute poll, 63 percent of exam takers rated "Ethical & Professional Standards" as "tough" or "extremely difficult," nearly the same percentage who rated "Economics" and "Financial Reporting and Analysis" as "difficult" or "very difficult." Few people expect any of those areas will be straightforward; don't make the same mistake with ethics. You'll need a deep understanding of the topic to be able to distinguish amongst the many options, especially when two or more solutions appear to be equally plausible.