CFA Exam ResultsThe 2016 June CFA exam results are out (for levels I and II anyway) and the results are, once again, disappointing for candidates. Just 43% of CFA level I candidates and 46% of Level II candidates were given a passing mark.1 Both Level I and II pass rates were unchanged from their previous exams.2 On the bright side, Level I’s pass rate is one percentage point above the average all-time pass rate of 42% (1963-2015).3

What about the CFA Level III Exam? While the exam results for Level I and II exam results are released within 60 days of the exam, an additional thirty days are required for the CFA exam graders to finish up Level III exams. This is because Level III exam questions, focusing on portfolio management and wealth planning, are more comprehensive, requiring increased scrutiny and subjectivity from graders.

For example, a question might involve developing a strategy for a couple approaching retirement. This would involve numerous variables including risk tolerances, suitable investments, tax considerations, longevity concerns and estate planning. Reviewing such questions takes additional time and is the reason Level II exam results take up to 90 days to receive.

Why are the CFA Exam pass rates so low?

The pass rates have gotten incredibly selective, especially for Level I. This is presumably for a couple reasons. First, it maintains high standard of the CFA program. The CFA Institute has gone to great lengths to build up its brands reputation. And it has worked- its reputation is highly regarded in the financial services industry. By one account, less than 30% of those candidates that begin the CFA program go on to pass all three exams.4

“When evaluating two candidates, all else being equal, but one has the CFA designation, they will bring deeper knowledge and deeper ethics to your company.” – Anil Ghelani, CFA5

“When evaluating two candidates, all else being equal, but one has the CFA designation, they will bring deeper knowledge and deeper ethics to your company.” – Anil Ghelani, CFA5

CFA Partner Programs

The study time required for the CFA program is daunting- the standard recommendation is 250 hours of study time per exam. So, it can be extremely frustrating for those who don’t pass (this author knows the feeling first hand). Candidates must retake the exam in either 6 months (for Level I, which is offered twice per year) or in one full year for levels II and III.

So an increasing number of aspiring financial professionals are taking a different approach. The CFA Institute has partnered with a number of colleges and universities to acclimate students to investment management curriculum earlier.6 These partner programs teach the various tools of investing and help students prepare to eventually take the rigorous CFA exams. The partner programs also expand the CFA Institute’s reach. There are partner schools in countries as distant as Peru, Russia, Lebanon and Indonesia.7 These Program Partners are an extremely valuable resource for the CFA Institute while also encouraging future generations of candidates.

What makes this partnership an unlikely pairing is that continuing financial education via either the CFA program or Master’s degree (MBA) is typically viewed as an either/or decision. In fact, the CFA vs MBA debate has raged on for years in the financial media. Also, the CFA prides itself on not being an academic-oriented program. The CFA curriculum is created and updated annually by actively working professionals in the financial industry. From the CFA Institute’s website,8

“The

[CFA] program is not an academic one-rather, it focuses on the investment management profession from a practitioner’s standpoint.”

But in other ways, the partnerships are a good fit. While the CFA’s flexibility is beneficial to many pursuing the designation, if the candidate isn’t adequately self-motivated with efficient time management skills, the experience can become overwhelming. By combining the studying with a more structured environment like in a Masters degree program, increases the chance for success.

Online Master of Investment Management and Financial Analysis

One CFA partner school, Nebraska-based Creighton University, offers an Online Master of Investment Management and Financial Analysis degree. This program is designed to prepare students for all three levels of the CFA exam by covering major topics such as ethics, risk management, equity investments and portfolio management. According to Creighton’s website, it is also the only CFA Partner school offering a fully online, specialized finance masters degree.9 Further, all the faculty in this program staff also have earned their CFA charters, providing invaluable insight into what it takes to pass all three exams.10

Many aspiring professionals looking for various careers in finance will find the CFA program beneficial in whatever area they choose, particularly investment management. If you are serious about furthering your financial career, consider the CFA, a Masters degree, or both!

 

1,2https://www.cfainstitute.org/programs/cfaprogram/exams/Pages/cfa_exam_results.aspx
3https://www.cfainstitute.org/programs/cfaprogram/Documents/1963_current_candidate_exam_results.pdf
4http://www.investopedia.com/articles/professionaleducation/07/cfa-charter.asp
5https://www.youtube.com/watch?v=GARTpxY8q_U
6,7https://www.cfainstitute.org/community/university/Pages/cfa_program_partners_overview.aspx
8https://www.cfainstitute.org/programs/cfaprogram/Documents/cfa_program_theory_meets_practice.pdf
9,10http://online.creighton.edu/mimfa/masters-in-investment-management-financial-analysis

 

Summary
CFA Exam Strikes Again
Article Name
CFA Exam Strikes Again
Description
The 2016 June CFA exam results are out (for levels I and II anyway) and the results are, once again, disappointing for candidates.
Author
Publisher Name
www.FinancialCareerOptions.com
Publisher Logo