The results of the CFA level I are due to be released tomorrow. As ever, expect the pass rate to be relatively low – 38% typically make it through the June exams, rising to a (slightly) more respectable 43% for those taking a second crack in December. Pass or fail, what should you do next? Nathalie Columelli, a former Deutsche Bank trader who now trains CFA candidates, has the answers.
You are among the minority who have passed CFA level I
Congratulations and bravo – take a moment to bask in the glory. Initially, enjoy the summer break and forget the stress of revision and awaiting the exam results. Enjoy your success, re-energize prepare to attack level II in September.
The second level is considered the most difficult by most of the candidates we work with. You need to plan to increase the amount of study time – apart from anything else the reading material is much denser and convoluted than anything you will encounter during the first exam and you need to advance at a slower pace.
The amount of extra time will depend on your success at level I. Add 30-40 hours if your scores across the various modules were almost all above 70% and add 60-75 hours if you have two or more topics where you scored lower than this.
In all cases, register in September to ensure you get in and start studying in October or November or you’ll have to do double the work down the line.
You are among the majority who have failed CFA level I
Nothing is lost, so do not despair. On the contrary, the CFA is a long-term project and you need to regroup and develop a relevant and winning strategy to pass.
Get back on the horse
Failing level one often deters people from re-registering, but the CFA is a long game, requiring over 1,000 hours of study over several years, so don’t let one set-back put you off. Before starting out, you need to be aware of how much of your life studying for the CFA will take up and the impact it will have on your daily life. It might seem like you’ve put your life on hold for no reward, but remember the reasons you’re aiming to become a CFA charterholder in the first place – increased employability, professional development, better promotion prospects and better international mobility.
Register for a December retake
The CFA level II isn’t available to candidates in December – something I feel is an oversight as it would allow candidates more flexibility in their study programme – so if you fail level I in June, register for the re-take in December. This means you can sign up in time for level II in June next year, and you won’t lose valuable time.
Remember, you probably have a better chance of passing CFA level II
Failing level I is an opportunity – you can really nail down your study programme and get to grips with the subject matter, which in my experience usually prepares candidates better for level II. Yes, passing first time would have been good news, but what if you only just scraped through? Usually, candidates fail to account for the increased hours of study necessary for level II and instead employ the same methods because it worked for them last time around.
Basically, you have the opportunity to go into overdrive and get a really great score at level I in December and carry that momentum through to the second exam in June next year. You will build the skills necessary to succeed at level II.
Take stock of your scores in each subject
Take a note of the subjects in which you received an unexpectedly high score and those where you thought you were strong, but didn’t do particularly well. In both instances, there’s a high probability that these subjects offer the most scope for improvement.
You are close to the top 10%
If this is the case you may have slipped up by not reading the questions correctly, or through some minor miscalculations on some questions. Don’t hesitate to sign up for December.
You fall into the top 70%
If you simply ran out of time to prepare, got a lot of good scores in many different subjects, then re-register for December. Keep up the same levels of study for your stronger subject areas. Study the questions at the end of the CFA curriculum, test yourself by doing the “topic based practice tests” and download and review the mock exams offered by the CFA Institute. If you struggled with particular topics, allocate the same time and resources as you should have done in the first instance.
You mostly scored below 70%
If you scored less than 70% in most modules, go back to the drawing board. If you do decide to press ahead and study for the December 2014 exam, you will need to review your study methods and allocate 200-300 hours if you have any chance of passing level I. Assuming you pass, pressing on to study the next level in June 2015 will be a big ask, so you need to make sure that you have the availability to dedicate the time to study.
What I would advocate as an alternative to these intense months of study is to catch up on some rest and emerge reinvigorated for the level I exam in June 2015 and then aim to pass level II the following year. This approach allows you to manage your energy over the course of the next three years and the break will put you in a position to attack each level with motivation and energy.
Nathalie Columelli is a former trader at Deutsche Bank. In 2005, she became a trainer of CFA candidates at Finance Training in Paris, specialising in coaching CFA candidates in the EMEA region.