Prepping for the CFA Exam: Determining What’s Important

Before beginning this journey, when you’re standing at Point Zero looking ahead, it probably looks rather murky. There are lots of uncertainties regarding what this program is and is not. You may have been referred to the CFA program by an employer, professor, or friend; maybe you’ve done some light Googling to learn more about it.

I know I certainly had more questions than answers when beginning my journey, but after going through it, I figured out what was truly important and what isn’t. I hope to shed some light on what you need to know before embarking on the path to becoming a CFA charterholder and I will also highlight some common misconceptions.

Critical To Know

1. Set expectations with your inner circle

In order to successfully pass all three levels, you must not only mentally prepare yourself for seeing your friends, family, and significant others less, but you must prepare them as well. I was lucky enough to be surrounded by people who were very understanding when I had to constantly turn down invitations to hang out.  You must let the people in your life know that your availability will decline, since on top of being a full-time employee or full-time student, passing the CFA exams require spending hundreds of hours of studying, which in turn increases tiredness and stress.  

Having your inner circle understand what you’re going through will help to reduce any unnecessary external stress. This is critically important throughout the program.  

Still, you also need to make time for a personal life. Think of your friends and family as the water that is keeping your ship buoyed. You must sail the ship to the promised land of passing all three levels, but they keep you from sinking.

2. Mock exams are extremely important

And not just to figure out your chances of passing (I’ll get into this later). Overall, I believe that this was the most useful tool for me when it came to passing all three levels.  


Mock exams serve several purposes.  

  1. Numerous studies show taking practice tests is one of the most effective methods for learning the material. In fact, a 2013 study in Psychological Science in the Public Interest concluded that out of 10 popular study techniques, practice testing was the most effective.  

  2. Mock exams help with timing, and you must practice your timing (especially important for levels 2 and 3). Practicing helps shape your mental clock so you can understand how much time you can spend on each question. Obviously, some require more time than others, but if you do enough mock exams, you’ll feel an alarm start going off in your brain when you are spending too much time on questions, vignettes, or essays, which can be very costly.  

  3. Practicing helps reduce surprises and boost confidence on test day. When the moment comes to actually sit down and take the test, most people will experience some level of anxiety. It’s completely normal.  But if you practice with several mock exams, you’ll understand the structure (not to be confused with problems) of the exam fairly well, allowing you to smoothly proceed throughout the test.

3. Regulate yourself

From my own experiences and from others I’ve talked to who have successfully completed the program, the #1 trait we have in common is discipline. There are no teachers requiring you to complete your papers and homework assignments by a certain date. This is all on you. You must decide if you want to go on that awesome Memorial Day vacation with your friends or family a week or so before the test or use that time to take mock exams (this is an extremely critical period, by the way!).You must decide if you hit the books after a long day of work.  

It’s tough, folks. There’s no sugar coating the difficulty—but it’s attainable if you put the effort in.  

My suggestion is to regulate yourself. What I mean is to set goals throughout your studies and try to hit each and every one. For me, I used Excel to plan out all my weeks starting from 6 months out to test day, including checkpoints for material. For example, I’d set a goal of completing a certain session and practice problems by the end of the week.  

I would also set longer term goals, like a range of when I wanted to complete reading through overall topics like FRA and when I wanted to start mock exams. In hindsight, this was a much bigger contributor to my success then I would have thought before doing it. It kept me on track. If there was a week I didn’t meet my goals, I made sure to hit them or exceed them the following week.  

This helps to reduce surprises. If you’re studying completely free-form, all of sudden you blink and it could be May when you realize you don’t have time to go through a complete review of the material and all the mocks you set aside. If you plan ahead, you can see when you need to speed up earlier, rather than when the clock is expiring.

Not-So-Critical Things

1. Pass rates

I’ve seen so many candidates obsess over this, including myself. The CFA Institute does not set a certain score that needs to be cleared to pass each level. For most of us, it’s a very murky, moving target. Understandably, this causes students to spend endless hours trying to figure out what the typical pass rate is so they can guess their target.  

But targeting a pass rate to exceed is the wrong way to approach these exams. You must target understanding the main tested topics very well, and all other subjects as well as you can.

“Knowing” the pass rates also can cause unintended consequences. First, exceeding this perceived target may cause a candidate to feel too comfortable; you might not put full effort into the very important last few weeks before the test. Two, consistently falling short may cause frustration and unjustified lack of confidence, which is a recipe for a poor studying environment.  

From time to time, I fell victim to the latter pitfall, but as I progressed from level to level, I wised up and learned to worry less about pass rates and more about understanding the material, creating a more supportive study environment.

2. Difficulty of math

The CFA is not interested in figuring out if you’re the next Isaac Newton. Some of you may come from backgrounds with less math exposure than others, but that’s not reason to worry. Most of the math is some form of basic algebra.

Some of the equations can certainly look intimidating, but that has less to do with math and more to do with memorization. Don’t fear the math. Just get very handy with your BA II Plus or HP 12C and you’ll coast through.

3. Need to hit a certain amount of hours

There’s this mythical 300-hour study-hours target that you’ll often hear you need to hit. But  300 hours is nothing more than roughly the average amount candidates say they study for each exam. In reality, the CFA Institute reported the average time studied among all candidates (pass or fail) in 2016 was 322 hours.  

But I have to ask: Why would so many candidates aim for the average study hours, when more than half the candidates fail the exam?

This perceived target causes a lot of candidates to understudy. Once the magic number is, they believe they’re somehow automatically ready for the exam. But we are all different. It may take some 400 hours or some 500 hours—and maybe some only need 150 hours to get to a point where they are comfortable with the material.

Don’t obsess with hitting a concrete hourly number. Instead, aim to understand the material as best as you can. It puts you in the best position to succeed.  

Don’t be afraid of studying well in excess of 300 hours. Study more to study less. That is, putting in an extra 50 or 100 hours, or whatever you need on top of that average 300 hours may save you hours overall—because if you don’t put that extra effort in, you may have to repeat the level next year, requiring an additional 300 hours.

Best of luck, future CFA charterholders!

About the Author

Frankie Carson, CFA,  graduated from Bowling Green State University with a bachelor’s in finance in 2011. He earned his CFA charter in February 2016.  He currently works as a sell-side equity analyst covering the industrial technology supply chain. Connect with Frankie on Linkedin.

Frank Carson