If you have recently made the decision to pursue Chartered Financial Analyst or if you are already a CFA pursuant and are looking for study tips for higher levels, these tips will be helpful in guiding you with your preparation. The Chartered Financial Analyst course (CFA) is conducted by the CFA Institute for candidates who plan to specialise in the field of financial analysis.
Before we start talking about how to study for each level, let’s take a look at the course structure and syllabus of CFA.
The CFA Subjects and their Weightage for Each Level
|Subjects||Level 1 Weightage||Level 2 Weightage||Level 3 Weightage|
|Financial Statement Analysis||13-17%||10-15%||0%|
|Portfolio Management and Wealth Planning||5-8%||10-15%||35-40%|
|Ethical and Professional Standards||15-20%||10-15%||10-15%|
Top tips to help you prepare for CFA (All levels)
1. CFA Level 1
- 300+ hours of studying is required –
As recommended by the CFA Institute, it is crucial that your overall preparation time should add up to at least 300 hours or more. This study time can be comfortably split over a period of 6 months such that you get 12 hours of study time per week or 1.5 hours of study time per day. This is inclusive of the time you spend with a coaching enter and the time you spend self-studying the chapters. The syllabus for level 1 CFA is massive and needs a lot of consistency in preparation.
- Get comfortable with your calculator
For CFA, you are only allowed to use two types of calculators, either the BA II Plus calculator or the HP 12C calculator. Subjects such as Quantitative Methods and Portfolio Management need you to be quick on your calculator so that you don’t end up wasting time on such questions. So practice as much as you can with your calculator to be efficient with it during your exams.
- Devise a study plan
- When you are preparing for CFA level 1, it is always recommended to start with Quantitative Methods or Corporate Issuers. These are comparatively easier subjects and ultimately pave the way for you to get ready for the other subjects.
- After this, you can choose between 2 routes.
- You can move on to Economics and FSA
- You can move on to move to the market-oriented subjects i.e. Equity, Derivatives, Fixed Income, Portfolio Management and Alternative Investments.
- Ethical and Professional Standards is a subject that needs consistent reading and revising. So instead of dedicating a significant chunk of time in one go, try to read one chapter of Ethics a day to keep the information fresh in your mind. Ideally, you can leave ethics towards the end because that way, you will be able to recall the topics more efficiently during your exam.
- Practice your concepts with question banks and mock tests
After completing each topic or subject, you should follow it up by solving a question bank or a practice paper. This can help you retain concepts in a better way and also teach you how to apply these concepts to solve problems. The CFA Institute website features numerous mock exams and question banks that you can use for practising.
2. CFA Level 2
After you have successfully cleared CFA Level 1, it is time to brace yourself because the Level 2 exam is considered to be far more advanced. You need to put in a lot more work and preparation to clear CFA Level 2 as compared to Level 1. Now, while preparing for Level 2 of the CFA exam, the following tips and suggestions should help you prepare more effectively.
- Brush up on basics for Level 1
During the CFA Level 2 Exam, you need to make sure that your foundation of Level 1 is strong as you start studying for Level 2. You need to use all the studying tactics that you did in Level 1 and also prioritise subjects in such a way that you are studying only one difficult subject at a time, inc combination with a comparatively easier one.
- Minimum of 350 hours of integrated learning is required
The CFA Institute recommends that you get to spend at least 350 hours in preparation for CFA Level 2. This is because the difficulty level for Level 2 is significantly higher than that of Level 1.
- Get familiar with vignettes i.e. mini-case studies
A distinguishing factor that separates CFA Level 2 from level 1 is the introduction of mini case studies into the exam pattern. In this section, you will be given mini case studies (vignettes) followed by a set of questions pertaining to each case study. Getting familiar with this format will help you a lot in clearing CFA Level 2.
- Summarise your notes
This might be one of the most effective study tools for such examinations that can help make your revision process quick and efficient. As you read the subjects adn understand the concepts, make a habit to create short summaries or list important notes so that a few weeks before the exam, you can directly refer to these summaries to revise.
- Practice using mock tests to improve your time management skills
We said it before, and we will say it again. Mock exams will help you a lot in the long run. Not only will you be able to pace yourself for the exam questions but you will also feel more confident on the day of your actual exam.
3. CFA Level 3
This is the final battle before you are ready to officially earn the CFA charter. A good part of CFA Level 3 is that you will have to prepare for 7 subjects instead of 10. However, there are some differences from CFA Level 2 that makes the Level 3 exam quite challenging to tackle. Some of the following tips should help you prepare well for your Level 3 exams.
- Get acquainted with the constructed response section
In CFA Level 3, a new section gets added which is known as the ‘constructed response’ section. This section makes up 50% of the paper and features subjective questions or essay questions where you will need to write down the answers in an elaborate manner contrary to multiple-choice questions. These questions may either be word-based questions or calculation based questions.
- Make use of the CFA Institute and external resources
Most students have different preferences when it comes to the kind of study material they like to use during CFA. Whether you decide to refer to the CFA Institute’s curriculum materials or if you refer to books by other authors, be sure to select the CFA material that will complement your method of studying. Also, do not miss out on the questions given at the end of chapters or between two topics.
- Do not neglect the Multiple Choice section of the paper
Due to its novelty, the constructed-response section gets more attention during CFA Level 3 prep. However, it is important not to neglect the MCQs since they make up for the other half of your paper.
- Mock exams and Practice questions are your best friends
The Third time is the charm. Continue practising using mock exams and tests to improve your time management skills. This will be particularly helpful in pacing yourself since the essay questions will naturally take a lot of your time.
- When in doubt, do not hesitate to skip the question
Time is of the essence, and if you spend more time than necessary behind one question that is challenging, you may lose precious minutes for questions that you can easily answer. So when you realise that a particular question is taking too much of your time, you can skip it and prioritise the ones that will be done faster.
The journey to completing your CFA course is a marathon, not a sprint, so it is important to pace yourself and set realistic timelines and study plans to achieve the most desirable results. If you are planning to pursue CFA, incorporating the above-mentioned tips and habits into your CFA preparation routine will definitely be very beneficial.
Another important factor to keep in mind is that connecting with a good coaching institute will largely enhance your overall quality of preparation. Zell Education offers training for all 3 levels of CFA and offers 3 different variants of the program to choose from.
The Chartered Financial Analyst is a globally recognised qualification in the field of finance and investment. If you have recently completed your graduation or are appearing for your final semester, you may be eligible to become a CFA. Interested? We highly recommend checking out our Chartered Financial Analyst (CFA) course.
What are the eligibility criteria for CFA?
You should be a graduate or at least in the final year of graduation to be eligible for CFA.
How long will it take to complete all 3 CFA levels?
It can take anywhere between 2 to 3 years to complete CFA depending on your speed of learning and availability for exams.
How are the CFA exams held?
CFA exams are held at a centre with computer-based exams. There are no written exams at any level.