Just Failed CFA Level 1
Hey guys,
So I just sat for the CFA Level 1 in June and got a "9" band of failure on it. Safe to say it definitely killed me since I was barely almost there. So currently I work in the executive compensation world but would like to break into Asset Management, should I keep with the CFA or pursue grad school for a reset which is better? I've talked to people from both sides and have heard differing opinions as to which is actually more beneficial for career advancement, thoughts?
failed the CFA
Most of the users agree that for the Asset management career path, the CFA can be instrumental.
from certified user @Angus Macgyver"
If you wanna get into asset management, then you probably want to keep going at the CFA.
What did you study in undergraduate school...? I think a lot of kids in the US get a bit of a shaft when it comes to CFA L1, on account of there being so few decent undergraduate business programs there. The material isn't difficult at all, and is roughly equivalent to an undergraduate business degree or a 1-year MSF, but there's just quite a bit to get through for someone who didn't do anything related (Finance, Econ, Accounting etc.) in school.
Keep going, and I'm certain that you'll pass in due course.
from certified user @junkbondswap"
OP, don't get discouraged. Devise a better study plan and keep track of your study hours. You should really shoot for 300 hours. Did you use Schweser or did you rely on the CFAI texts?
I think Schweser is by far your best option for L1. Do the following:1) Read the Schweser Notes package 3x doing the questions as you go along. Take notes or make note cards during your first pass.
2) Take advantage of the Schweser Q bank (try to do a few hundred questions)
3) Take at least 6 full-length practice exams.
4) Do the CFAI end of chapter questions if you have time.
The material is not difficult but as you know there is a lot of it. If AM is your goal the CFA is the appropriate path. If you are looking to rebrand and change careers into something else a top MBA is a better option. Good luck to you. Feel free to PM if you have any specific questions or need advice.
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If it's any consolation, one of my college buddies also failed CFA L1 with a "9" band. He decided to stick with it and just passed L1 a couple weeks ago. Give it a few days and the pain will subside. The CFA will greatly assist you in breaking into Asset Management, I'd stick with it.
If you wanna get into asset management, then you probably want to keep going at the CFA.
What did you study in undergraduate school...? I think a lot of kids in the US get a bit of a shaft when it comes to CFA L1, on account of there being so few decent undergraduate business programs there. The material isn't difficult at all, and is roughly equivalent to an undergraduate business degree or a 1-year MSF, but there's just quite a bit to get through for someone who didn't do anything related (Finance, Econ, Accounting etc.) in school.
Keep going, and I'm certain that you'll pass in due course.
Your comment regarding the lack of quality undergraduate business programs in the US is both false and stupid. There are only so many ways to teach finance, accounting, econ, etc. and nothing in an undergraduate business program or in the CFA curriculum is rocket science. I received a B.A. in a non-business useless major and easily passed L1 & L2. The OP clearly didn't study enough or effectively as L1 should be a breeze for anyone who has the time, inclination, and work ethic to get through the information.
OP, don't get discouraged. Devise a better study plan and keep track of your study hours. You should really shoot for 300 hours. Did you use Schweser or did you rely on the CFAI texts?
I think Schweser is by far your best option for L1. Do the following:
1) Read the Schweser Notes package 3x doing the questions as you go along. Take notes or make note cards during your first pass.
2) Take advantage of the Schweser Q bank (try to do a few hundred questions)
3) Take at least 6 full-length practice exams.
4) Do the CFAI end of chapter questions if you have time.
The material is not difficult but as you know there is a lot of it. If AM is your goal the CFA is the appropriate path. If you are looking to rebrand and change careers into something else a top MBA is a better option. Good luck to you. Feel free to PM if you have any specific questions or need advice.
If you wanted investment banking I'd say grad school, but if you want asset management then the CFA might be the better choice. Both would be good though.
If you want asset management you need the CFA charter, really its that simple. Tough luck on your test, but keep at it. The tests are very challenging, but also very doable.
Bummer dude, sorry to hear it. CFA is pretty much required for AM, so keep going, you'll know what you're doing this next time around. Just curious....executive compensation? commission accounting?
executive comp is like hr analysis, essentially you run comparables of ceos within a particular industry and design their packages to retain their talent and keep them from going elsewhere.
Hello guys,
Hate to break into this thread, however got a related question. I want to go for CFA level 1, however am working full time at a F500 in a non-finance role. My Bachelor's degree in Finance was a couple years away, and I am a bit rusty on the concepts.
My questions are: 1. What is the best strategy/book to get uptodate to pass CFA level one (and possibly further levels) I could break out my old comprehensive finance books but I'd prefer something quick and to the point (feeling I should study something focused for CFA lev 1 not the whole breadth of finance)
Many thanks and good luck to everyone on this.
Euinvestor11,
Answer to Q1: The CFA books provided are enough, 6 volumes for level 1. They are quite good at explaining and describing the material.
Answer to Q2: "buy" a software that helps you build mock exams ie. Kaplan
Don't worry about being rusty. I suggest if you are thinking about taking the exam next June (wouldn't recommend taking it in December at this point), buy the 2013 curriculum books from EBAY or Craigslist. The curriculum doesn't change much from year to year.
The curriculum is very good and you will successfully be able to reteach yourself everything you previously knew. The curriculum is a very good teacher of the material. Just make sure you allocate the proper time to study (250ish hours)
You'll probably pass next time. Just tweak your study habits a bit and focus more on the Qbank.
Start tuning up your study habits though, I just failed Level 2 and it was way harder than Level 1.
ABANDON SHIP! The tests only get harder. Invest your time in studying for the GMAT. Much better return.
BCbanker, I agree that the ROI on studying is better with the GMAT. However, if the OP has enough time to focus on both at different intervals, then by all means I would recommend it for AM. (CFA Level 3 Candidate here by the way).
I passed L1 in 2007. One of the hardest tests I've taken despite a finance degree and about 150 hours of studying. Glad I decided to go into real estate so I was able to abandon ship on the program before L2. Point is, it's a really hard test, but now you've seen it. You'll probably easily knock it out in December. If you play your cards correctly, you'll have L1 and L2 knocked out by this time next year. I would stick with it if you want to do asset management. Re-taking L1 in December and then crushing the material for L2 right afterward may help you get by L2. Maybe it's a blessing in disguise.
don't be discouraged over failing!
The CFA will only get harder. The other option may not be any better unless you are gunning for a top MBA then into banking.
Do some serious research into the role you wish to get, then figure a route that will get you there ASAP. You can probably look at people on LinkedIn and see how they got there.
it's AM vs IB question: try again if you want the first (I'm sure you'll pass since you have band 9 already) or switch to the second and go for top MBA.
I don't know how much value I can add here because essentially you have two sets of opinions; one is clearly right, one is not.
If you truly want to go into AM then the CFA is the gold standard and it will trump an MBA. If you get the charter and it doesn't work out, then you go back to school (I don't know why it wouldn't).
Honestly, the test isn't easy. I think level 1 is mostly comparable to an undergrad finance education, along with some things here or there that you may not already know. Anyways, where I'm going with this is that you need to be hungry. Anyone with the mental capacity to finish undergrad can pass level 1 but it certainly gets harder.
Disclaimer: just passed level 1 but I studied a good amount (screwed off in undergrad and didn't come out knowing much from my "finance" degree). Hope this helps, also check out analyst forums of you haven't done so already.
Ok, not to be a realist, but from someone who finally passed Level II this year after umpteen tries, if you failed Level I then there is a less than 5% chance you can pull off the Dec June I and II combo. But to the OP, I would only continue with the CFA charter if you're pretty certain you want to do AM. For IB its value is minimal. I mean how often will you have to run through GIPS for IB? From what I've read so far of L III, it's a ton of montonous stuff (like GIPS) that would bore most people to tears, and has nothing to do with debt/ equity issuances/ m&a advisory / valuations etc.
Yep, $125k for MBA, or ~$6,500 for all 3 levels of the CFA. MBA is definitely a much better return. It depends on what you want do. If he wants to get into AM then the CFA is a no brainer. Yes, the levels get more difficult but they are doable. I failed L1 twice before passing. I never put the required time and hard work in. Once I passed L1 I passed L2 & 3 on my first time and am now a charterholder. It can be done. Just sayin'.
I don't get how people fail Level One, to be honest... Level 2 was difficult, but I misallocated my time and still passed.
I used to buy the bang for buck argument with the CFA vs. MBA, but it omits a couple crucial factors = time value of money, probability of landing new position. If you go for a masters of finance, you can apply and finish the program in 1.5 years, at which point (assuming you went somewhere decent), you have a much better shot of getting a finance job that you want (that is higher paying). Think of the salary differential you earn for the next 1.5 years when you'd be struggling with the CFA? Scale that up for MBA (and add the summer internship salaray). You can play with the assumptions, but grad school is more fun, and gives you a better shot at the jobs you want, and the monetary gap is not as wide as some make it out to be. Disclaimer: did 2 levels of the CFA and got the role I wanted by going to grad school. Save the CFA for once you break in.
I've seen a lot of CFA vs. MBA debates. To be honest, I'm not sure why people aren't focusing on MBA + CFA. They are both acheivable, however, the MBA is only available for a "limited time". By "limited", I mean there is a finite time, or age range, where you have a real shot to get into a good school. Average age of MBA programs has been decreasing over the past 3 or 4 years, but I'd say the sweet spot is anywhere from 25 - 30. If you're older than 30 and are targeting the top schools, it can be done but it's not the norm. CFA is a tough test, but think about it - you can take it a gazillion times without penalty. Plus, you don't need to pass wtih flying colors - you can barely squeek by and you're still fine. So depending on what you do, how old you are, what you want to do - focus on one or the other, but why not focus on getting both over the long-term? Invest in yourself man.
I agree with this 110%. The value of the CFA for career switchers is vastly overrated. Go to a top MBA program and focus on recruiting. Take the CFA once you get into an IM gig since they will make you take it anyways.
Stick with the CFA if you really want to do asset management. If you really want to pass, get the Schweser notes and the Qbank (important) and crank through ALL 2,000+ questions in the qbank. Keys to passing CFA are (1) getting throught all the material and (2) practicing questions in the same format. Since Lvl 1 and 2 are multiple choice, qbank is critical. You'll pass level 1 and 2 using this approach, but not level 3 (you can worry about that later). I literally maxed out qbank for level 1 and 2 and crushed the tests when it came time.
Passing rates: L I: 38% L II: 43% L III: 49%
And I'm pretty sure that the failing 62% of L I testers are not nearly as stupid as you make them sound.
I undertand what you're saying, but dear God is that a lot of time spent obtaining credentials. All else being equal, yeah, get a Harvard MBA and the CFA charter, but geesh...
Definitely think there is an over emphasis on "credentials" among today's finance youth. Imagine if we spent the time we invest into MBAs and CFA studying into our jobs, our network, and our own industry knowledge (like, tangible knowledge--not CFA "knowledge")? I can't tell you how many people I've met who are on the CFA or MBA path and don't know how to read an MBS bond chart...
I really agree with this sentiment. Granted, I'm pursuing my CFA, but there's no way in hell I'm going for an MBA unless absolutely necessary (in which case, I'd probably do MSF anyways). If I ever go back to school, it'd be for something that I actually wanted to learn and am interested in, like philosophy. I just don't think that going back to B-school would really increase my actual knowledge in finance any better than just actually working. I honestly believe that you'd learn just as much if you continued to work and also did some studying by yourself on the side.
I know that MBA has a lot of value (much of it intangible) and am not trying to demean it in any way, but that is just my opinion.
I absolutely agree with this logic. So many youth are focused on credentials but do you know your job? I've met so many CFA's who give a whim about their job as opposed to the CFA/MBA. The way things used to work is that you have experience first. CFA and MBA were supplements to your experience. Achieving the CFA/MBA to get a job is completely backwards to me.
I know the pass rates. The test is absurdly easy. I see many mediocre candidates trying to cover up for their deficiencies, thinking the test is a cure for their other warts who inevitably fail.
I should rephrase, however - I don't get how anyone who has put in the time (150+ hours, not 300 for Level I) failing.
As I'm sure there are many mediocre candidates, there are a ton of people each year taking the test. All I'm saying is that saying it is "absurdly easy" is a vast understatement IMO. Granted, I have not taken it yet and perhaps change my tune once I have.
I took it and thought it was a joke. I honestly don't think I'd hire someone who failed Level I.
Haha, but how would you ever know?
I'd be operating under the assumption that they're being honest... :)
I should FURTHER clarify myself - certain circumstances are understandable (my boss failed it pulling 100 hour weeks back in the early 90's, and didn't study at all). So yes, there are understandable reasons - but when I read of folks putting in 250 hours and STILL failing... I feel bad for them.
L1 is just a weed out for levels 2 & 3. L2 is a very difficulty exam, but it's not rocket science or anything. On a forum where everyone is a prestige whore it's no wonder that so many people belittle the difficulty of every exam they've ever taken...
If you did struggle with L1, and you put forth a good study effort, you are going to struggle to finish the program.
I failed my first CFA this year, L3 @ Band 10. The L2 material is a little more challenging than L3, but the L3 exam is definintely harder than L2. The morning session is just brutal. It's pretty easy to go >70 in all areas on L1, but I've never seen anyone do it on L3.
Ha, since this seems to be addressing me - I found Level 2 difficult. Totally understand failing that one. The material in and of itself isn't difficult, but it is so wide that they can test you on things you didn't study intensely - even on sections you thought you knew. Why do you think Level 3 is harder?
@TheTruth916, I feel you man. I failed with a "10" Band Level. I probably missed it by about 3-4 questions. Definitely wanted to jump off a bridge, but I signed up for December because I, too, am shooting for either high-level AM (mutual fund or hedge fund) or IB (this will only happen if I go back to b-school in a year or two).
Keep fighting!
I can't say I disagree. I view it as (1) you do actaully learn some useful skills/knowledge attaining an MBA and/or CFA, and (2) the MBA and CFA both act as weeding out mechanisms, or guages for drive, desire and determination.
Most individuals quit before getting an MBA and/or CFA - so having one or both, shows to employers you are a seriously determined individual that has the discipline, long-term drive, and desire to do what is necessary - which will likely translate into your work approach and performance. How many people have the mental toughness, will and self-belief to attain these credentials? That's why they are so valuable and elusive.
Individually, I don't think any of the topics on L2 or L3 are all that difficult. The difficulty, as you said, is almost entirely driven off of the volume of material. It's a little overwhelming at first to see that many books and know that anything is fair game to be tested on exam day.
Like I said earlier, I think the material on L2 is a more difficult than the L3 material, but L3 is a much more difficult exam.The AM session, you can look at the old exams published on the CFA website, is comprised of 10-12 short-essay/calculation questions. Unlike L1 & L2, there is no guessing or reverse engineering as you have nothing else go on but the question. You either know it or you don't. Like the CFAI does on L2, they can and will pick a very micoscopic topic to test you on. A single question could cost you 5% of your total score on exam day if you're weak in that area. While you can get partial credit, the CFAI graders will easily see through any bs you write down as answer fluff. Time is everything in the L3 AM portion. I finished with only three minutes to spare versus the 30-40 minutes I normally had left during my practice exams. I did a few peripheral yawn glances around the room, with my pencil down and book closed, and noticed that almost everyone else was still writing feverishly. Of the six guys I talked with seated around me all of them were retaking the exam...
The L3 PM session is on par with L2 and you have to do well on it to help balance out a shitty AM score. If you go on analystforum, look at the results that L3 candidates posted this year. You'll see a dramatic difference between the AM and PM scores. Very few people, if any, do better in the AM session than in the PM session. L3 is hard...
I wouldn't call them that valuable. How many people do you know personally "arrived" in their career or became successful or wealthy because they have the CFA charter or any other non-required designation (e.g. CPA and actuarial exam passing would be required for a specific career)? Other than people who go to M7 business schools, how many people actually achieve their career goals BECAUSE of an MBA? The reality is, if people spent the time it acquires obtaining the CFA charter or an MBA or any other designation doing things such as networking, kicking ass at their current job, or developing a deep understanding of their industry then they wouldn't need these designations--and they'd be better off.
For example, if you have made yourself an expert at industrial real estate, you've spent 1,000 hours networking among your peers (rather than studying for the CFA exams or going to business school with social workers), and when you're at work you've actually kicked ass rather than having your head in the clouds thinking about bigger, better opportunities then you would arrive without the help of any letters after your name. I know because I am that guy--the guy who early in his career was always looking for the next best thing, the next credential that could make my resume stand out.
You know what stands out? Good writing skills, continuity in career, specialized expertise in a small subsection of an industry, reputation of the firm(s) you've worked at, and contacts, contacts, contacts. I can't stress this enough--young men need to get their heads out of the cloud, stop being so darn discontent, and just put their heads down and kick ass. People who achieve will make it--people who are always studying for the next credential will probably never be anything special.
I completely agree with you. I didn't meant to imply that these credentials will, by themselves, guarantee upward mobility or success/wealth. You need to marry these credentials with hard work and performance on the job. And yes, contacts and networking are invaluable and could easily be more important than anything else mentioned (CFA and MBA included - though MBA actually brings you a strong network depending on the school).
But I do think they both have value. Many jobs have glass ceilings, or require such credentials not only to move up, but to just get in the door. For example, you can make it in the asset management world without a CFA. You see plenty of portfolio managers who do not have CFAs that run large funds. However, times are changing - it's almost a requirement that you (i) have the CFA charter, (ii) are enrolled in the CFA program, or (3) at least have interest in pursuing the CFA designation. Same thing for private equity and business school. Sure, associates typically haven't gone to business school, but it is rare that VPs or Principals (junior management) do not have an MBA. In these examples, the credentials are incredibly valuable - more like mandatory. And side note - it's not always the companies themselves that require hiring people with a certain pedigree. Many times it's the INVESTORS that require it - IE: LPs of private equity firms demand it. What do you think limited partners look at when they consider a private equity firm that is fundraising? They look at experience and education of the investment team members.
Funny you mention it - while you are "that guy", I am "this guy". I have both a CFA and MBA. I pursued the CFA for knowledge, with the hope it helps me actually do my job better and in no way look at either as a guarantee of success - I still have to work my ass off if I want to make it. But I also look at them both as long term investments in myself - things that will allow me to be considered for more senior positions many years down the road, or using my previous example, allow me to break through the preverbial glass ceiling.
Right on--I'm with you. I agree. I'm just sensitive to it because I know what a mess of my career that I made when I became discontent, when I was slacking off at work so that I could read up on new credentials, or how I would lock myself in my room for days studying rather than meeting new people. I effed up so much early on pursuing some of these wrong things.
But you're right--in some specific professions they are forming some glass ceilings that are going to be harder to penetrate in the future. I do think the OP should continue on with the CFA exams in his field.
I got my current job because the recruiter was impressed I was pursuing the CFA charter while still in school. The company I'm currently interviewing at pretty much told me they were only talking to me because I'm a L2 candidate. The whole "CFA doesn't help you open doors/break-in" is a myth generally propagated by folks who do not have the charter or candidacy for the charter. I went to a state party school, but am surrounded by Georgetown/HBS/Darden grads solely because of it.
Are there other ways to get there? Sure. Is the test for everyone? No, certainly not--it's a huge time investment, and time is the most valuable resource one can have in life. These blanket generalizations are the worst part about this site. There are many ways to get there, you just have to find which works best for you. These tests are hard. as. fuck., especially if you're already working lofty hours. DM me with specific questions if you'd like. Good luck!
CFA is much cheaper and as a member of CFA Society in my city I can tell you most AM PMs attend the meetings. Join it in your city.
Sorry to hear that man! I am taking level 1 this December. Agree with @TomK. Join the local CFA Society to network and get a job thanks to pursuing your CFA Charter. I met met many PMs at society meetings and conferences organized by the society. Most of them have one thing in common, they have a CFA Charter.
just took lvl 1 today. felt like a goat led to the slaughterhouse. crazy rusty, 2012 grad, in "finance" from a second tier statey. i studied using schweser and did q bank q's 2500q and EOC on the CFAI site. still i got my panties in a havana shit storm... maybe just not cut out for it. its stormy now.. perfect weather for the godless emotions im going through! back office for life@!@!!!!!!!!!!@#!@#
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