Thinking About CFA Level I Dec? Here's What You Need to Know

This article is originally from 300Hours.com. You can read the full article here.

As we trudge through the lull before the June 2012 results, many first-timers are asking if they have enough time to take the December 2012 Level I exam. That's a fair question, and it's great that these candidates are sensible enough to think about it (after all, there is a lag of one year between levels so seems reasonable to assume one needs a full year to prepare). Many also do not have significant financial knowledge or experience so there is an element of uncertainty there.

I can sympathize - when I signed up for Level I my awareness of finance were the buzzwords my fresh-grad investment banker friends were throwing about, having just used them in their interviews with Goldman Sachs et al. Having been through the gauntlet, I can share what are the main things you should be aware of.


Honestly speaking, if you're starting now for Dec 2012, you don't have to worry about Level I, you have more than enough time. 300 hours is approximately what you should aim for, and in 5 months you have more than enough time to squeeze this in. Even if you're not clued up in finance. Trust me, as long as you put in the hours and effort and have a decent head on your shoulders, you should have nothing to worry about.

For Level I, that is. The real problem is Level II 2013 should you pass Level I Dec 2012.

The Level I exam is somewhat a tamer version compared to Levels II and III. That's not to say that the Level I should be underestimated - quite the opposite especially if you have no prior financial knowledge. But if you're taking the December Level I exams that leaves you exactly 6 months before the June 2013 Level II exams. Which, I assume, is the main reason you're taking December 2012 in the first place - to catch the 2013 Level II train.

Now that can be a challenge, passing Level II directly after December Level I. I'm not saying that can't be done - I've known loads of people who've done it. One of my study mates blazed coolly through Dec Level I and June Level II like they were standing still - but she was a crack Economics graduate from Cambridge, was an investment banker in Merrill Lynch and ate accounting for breakfast. For a finance newbie the situation might be a little more challenging.

So if you're contemplating December Level I - half a year to prep is fine. Put in the hours and you'll get through OK. It's Level II you have to watch out for - keep these things in mind:

  • You have to start very soon after the Level I exam. You can't really think about waiting for the Level I results first before starting - that would be misjudging how much time you need for Level II, especially if you don't have a finance or accounting background. Think about the mental discipline you will require to continue studying right after taking the Level I exam - that takes some commitment. CFA Institute obviously does not allow registration for Level II until your results for Level I have been announced, so you will have to start studying with a third-party provider.
  • Level II ain't the same as Level I - just because you passed Level I with 5 months prep doesn't mean it will apply to Level II. They're just different beasts. So even if you start immediately after the December exams, you'll have to plan your study schedule to be more intensive than Level I - otherwise it may not be enough.
  • Get all the help you can get - understand how Level II is different in terms of question formats, curriculum focus and material volume. This will be key to make sure you utilise your time properly.

Hopefully I've not scared you off and you're still reading - having said that there is no reason why you shouldn't attempt December 2012 at this stage:

  • As I mentioned, you have more than enough time to prepare.
  • If you do not make it this time, at least you can try Level I again in June 2013 and possibly catch Level II in 2014.
  • Did I mention you have enough time for December 2012?

Kudos for deciding to take the CFA challenge, and I admire your ambition to push forth as quickly as possible. I'll see you on the other side!

Comments (41)

Jul 6, 2012

L2 is a beast

Jul 6, 2012

What are the best practice books to buy to prepare for CFA Level 1?

Jul 9, 2012

Schweser are the most popular. Elan Guides are new and pretty good but they currently only cover Levels 2 and 3. Good luck in your prep!

Best Response
Apr 25, 2014

Only used Kaplan for L1 and it worked great for me. Trick for L1 is to to just do as many practice questions as you can. Destroy the mock exam books, Q bank, and any old CFAI mocks. If you're still feeling uneasy in an area, then check out the CFAI text.

    • 2
Apr 25, 2014

Probably I will ditch the program if I wont pass L1.

Snootchie Bootchies

Apr 25, 2014

Follow

Apr 25, 2014

its hard! if i dont get cleared l1 i l ditch

Apr 25, 2014

Start studying as early as possible. As HFer said, do as many Qbank questions as possible. Keep track of the study sessions that you are scoring most inconsistently on. Make sure you know the mock material that shows up a lot, they will definitely be on the exam. There is no reason to lose points on silly definitions you never bothered looking up.

"Money doesn't talk, it swears." -Bob Dylan

Apr 25, 2014

I have a set of 2014 Level 1 Kaplan Schweser softcover books for the CFA exam. It includes books 1 through 5, with the following titles:
1) Ethical and Professional Standards and Quantitative Methods,
2) Economics,
3) Financial Reporting and Analysis,
4) corporate finance, portfolio management and Equity Investments,
5) Fixed Income, Derivatives and Alternative Investments.
The books are highlighted and have written notes in the margins but the end of chapter questions are free of markings.

Please message if you are interested. Books can be picked up in Midtown NYC. $150

Apr 25, 2014

1. the younger the better

2. mba is better

3. more is better than less although it's just better to get experience

if you're not working in an IB now getting it could give you a leg up but don't hold your hopes up. your best bet is getting relevant experience or an MBA.

Apr 25, 2014

Where are you supposed to get the material to study for CFA - are there specific books?

Apr 25, 2014

They're now included by the CFAInstitute when you sign up for the test.

Apr 25, 2014

1, It is possible. My friend passed all 3 levels just by reading the study guides.
2. It is also possible as you will only be doing level 1 while in school since you have one year left. Level 1 should take a bit of what you're learning so it'll be almost like double studying. The Ethics portion needs to be studied hard no matter what though.

make it hard to spot the general by working like a soldier

Apr 25, 2014

Thank you so much for your reply! Actually, I have 2 and 1/2 years to go in Bachelor's. My current college transferred only 1 and 1/2 years of my old bachelor's.

Apr 25, 2014

Yeah level I is definitely manageable in school. I'd still steer you toward Schweser notes since your study time will be much more efficient. If you can't buy them new, pick up a used copy that is a year or two old... should be almost identical material.

Also, AnalystForum is your friend for all things CFA...

http://www.analystforum.com/

-jankynoname, CFA

Apr 25, 2014

Yes, the Scweser notes is all that my friend used to study. I forgot the name of it, I just knew he didn't do anything else other than read.

make it hard to spot the general by working like a soldier

Apr 25, 2014

Thanks both of you for the guidance.

Apr 25, 2014

I took it the year after i graduated, but 80% of the material is essentially college level finance concepts. Aside from maybe some international accounting, you will have seen most of it already. Go with Schweser and you'll be good.

Apr 25, 2014

Thank you, I really appreciate the advice

Apr 25, 2014

I had success doing it in June directly after graduation in May because there was a large gap between graduating and taking the test. So I studied all day every day. 0 other commitments. This was essential because I had barely studied for the CFA during the school year. I walked out of L1 confident that I had passed, which is a great feeling. It's basically impossible to get that feeling for L2 or L3 (I will see tomorrow) while working full time.

Apr 25, 2014

I passed the Level 1 in June after graduating in May. I did a fair amount of studying at school and then just studied my ass off the for 2 weeks prior as well. I think if you're set on doing CFA, it's the best idea.

Blue horseshoe loves Anacott Steel

Apr 25, 2014

What about taking taking the Level 1 in December, then Level 2 in June. I will graduate in May so I will have a month of unadulterated prep time... Interested to hear thoughts on this. Will Level 2 be better to take after I have a year of on-the-job experience? Or are the concepts something where extremely-dedicated studying will suffix?

Thanks again in advance for the input everyone! It is very welcomed!

Apr 25, 2014

You can't sign up for Level 2 while still in school.

Source: http://www.cfainstitute.org/programs/cfaprogram/re...

Blue horseshoe loves Anacott Steel

Apr 25, 2014

I don't necessarily want to discourage you from taking the CFA exams but note that passing the exams will have little to no bearing on your candidacy. A CFA just isnt relevant for IB (excluding the fact that the studying will provide you with a working knowledge of accounting, asset allocation, etc.). Your best segway into IB is simply to network and possibly move to a larger IB hub such as NYC.

Use the search function regarding the value of a CFA. I think it is overrated unless you are going into a field where it is valued and/or required such as ER or investment management.

Apr 25, 2014

To answer your questions about the contract positions being used towards the 4 year experience requirement... I don't think it should be a problem. I believe that the CFA institute will count full-time work regardless of the terms of your employment (unless you were an intern), given that your work experience is "acceptable", meaning you are somehow "involved in the asset allocation process".

The material itself, despite what others on this forum may say, is VERY relevant to investment banking. However, it's not well regarded by most investment banking groups.

Money Never Sleeps? More like Money Never SUCKS amirite?!?!?!?

Apr 25, 2014

thanks for the reply folks...

@junkbondswap: I understand what you are trying to say. CFA may be overrated et al. But how does a person from a background that does not necessarily involve a lot of finance-related activity (I guess I can pass it off, as I am working for a bank) build up the credibility to apply for analyst roles? Thanks for the reply....anymore info will be greatly appreciated.

@sayandarula: Thanks for the reply. So you think it is very much within the real of possibility to make that career switch? Would you suggest I go ahead with preparing for the tests? (I really want to...and really will after due diligence).

Again, thank you fellas....any more info/help will be great!

Kingtut
The pharoah's curse liberates Egypt!!! :)

Apr 25, 2014

how is the CFA overrated? do it for the knowledge and look at everything else as an unintended plus.

Apr 25, 2014
ByAWideMargin:

how is the CFA overrated? do it for the knowledge and look at everything else as an unintended plus.

I thought about asking the overrated question also, however I think he used the wrong verb. It's clout within the IB/PE world is very limited but carries significant regard in jobs related to investments analysis and markets.

OP: I think CFA will show your interest but given the intense nature of IB work weeks, if given a job within they will probably discourage you from taking it b/c of the intense time commitments.

Apr 25, 2014
ByAWideMargin:

how is the CFA overrated? do it for the knowledge and look at everything else as an unintended plus.

OP: I believe this quote really hits the nail on the head. As someone with no formal background in finance, the CFA curriculum will be extremely beneficial for you (whether you go into asset managment, research, investment banking, or trading). Most bulge bracket banks and even well known boutiques don't value the CFA, and in fact look down upon it. If you were a fresh undergrad coming out of an Ivy or other target program for Wall Street, I would suggest skipping the CFA and just networking. However, I beleive someone in your shoes could benefit from the designation. Regional i-banking boutiques don't have the same culture of large banks, and some of them may value the CFA (though they too may not). But even if you try to get into ibanking and fail, the CFA will open up awesome opportunities in Asset Management, research, etc.

If you're extremely selective and only want to work at the top banks, then I say skip the CFA as you don't have a good chance at any of these places unless you go to a Top MBA program first. But if you're a little more open to smaller regional ibanks, then go for it dude.

Best of luck.

Money Never Sleeps? More like Money Never SUCKS amirite?!?!?!?

Apr 25, 2014

@Ray Finkle: Thanks Ray. I was only using the verb one of the contributors here used when I was saying "overrated".
Can you throw some light on the opportunities in Investment Analysis and Markets? I've heard this a lot and love to have a clearer picture.

Kingtut
The pharoah's curse liberates Egypt!!! :)

Apr 25, 2014
kingtut86:

@Ray Finkle: Thanks Ray. I was only using the verb one of the contributors here used when I was saying "overrated".
Can you throw some light on the opportunities in Investment Analysis and Markets? I've heard this a lot and love to have a clearer picture.

Investment analysis and markets; I guess basically any function analyzing merits of an investment opportunity would be the broad spectrum.

Apr 25, 2014

The CFA is very beneficial for sell side and buy side research (full-disclosure: I have a CFA and all CFA charterholders say the same thing), but not so much for bankers.

Why do you want to go into I-banking?

Apr 25, 2014

Wall Street Prep > CFA for transferring into IB.

Half the price too.

"The power of accurate observation is commonly called cynicism by those who have not got it." - George Bernard Shaw

Apr 25, 2014

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Money Never Sleeps? More like Money Never SUCKS amirite?!?!?!?

Apr 25, 2014

Kingtut
The pharoah's curse liberates Egypt!!! :)

Apr 25, 2014