CFA level 1 preparation advice please :)
Hi everyone! I’d love to hear your advice. Thanks for it in advance.
I have read that it usually takes around 300 hours on average for a person to prepare well for the CFA level 1 exam. I was curious and wondering, how much time might it take for a person with no finance background, or very low basics level of knowledge in finance? How many hours of studying might it take? Should that person start studying from the Official Cfa prep guide, or use external sources to learn first? I am not sure how complex the material is as I havent started studying myself yet, but as for now I’m trying to help my ambitious friend. Thanks for any responses.
You’re trying to help your ambitious friend?
https://www.reddit.com/r/CFA/comments/kbz3lo/cfa_level_1_advice/?utm_so…
Example of a thread on the CFA subreddit. Have a look there and all of your questions will be answered. This is a very regular question.
Is the CFA even worth taking anymore? Isn’t its value diluting each year in an accelerating fashion with online testing and expanding the passing pool each year? I mean sure its relatively inexpensive to take but, like they say, you pay for what you get, no?
i suppose its more for marketing nowadays, in a big 5 canadian firm and many ib analysts are highly encouraged to take cfa exams (true for other big 5 banks as well)
Yes lets listen to what an investment banker has to say about an investment management qualification. Very insightful. Thank you for sharing your thoughts.
Here in AM it is basically de rigueur to either have it or be working towards it if you are in any sort of investment related position. Sales can get away with something lesser like the CIMA, and marketing can get away with having nothing.
Lvl 1 is basically the background check. While I put in 300 hours I'd say that someone with a finance background could get away with 200. Someone with minimal knowledge like your 'friend' will likely need closer to 400 though. I normally stump for the CFA Institute materials as being more thorough and better written despite being longer, but I'll do so doubly here. They set you up much better for the following level. Remember, there is no partial designation. You have to pass the whole d*mn thing to use the letters, which is why it's a beast. I've got a friend who spent six years getting it, and at the end swore that he'd never take another set of exams in his life. Personally, I'm a glutton for punishment so I've kept on piling on the letters. I'm waffling between going for the FRM or the CAIA next.
To the Person in the comment above:
Thank you sincerely! Your response is absolutely the most useful and helpful one here amongst all. I appreciate it. 400 hours is very reasonable, probably even more he will need but that approximation surely helps to attempt schedule the study plan effectively. That’s also super true, the journey for the certificate is long as heck. The certificate itself aint even an outstanding achievement anymore, it’s just a basic professional requirement. Thank you once again for your effort to answer my question.
It’s the CFA charter not certificate.
If you have the time - take an entire year to finish each level. That sounds counterintuitive but it will give you enough time to immerse yourself in the official curriculum and still finish it. You will also get enough time to understand and revise each concept in detail.
If you have lesser time, say 4-5 months, there's no way you can effectively work with just the official curriculum. Get the Schweser notes and run through each reading, and finish up all the official questions. If you have never worked in finance, a benchmark of around 500 hours with the curriculum will be more reasonable.
Ideally, focus more on application - if you can take up each reading and directly see where it applies in the investment decision-making process, you will get where it all makes sense. Obviously, this sounds too superfluous at the moment, but if you pair your L1 studies with Damodaran's YouTube valuation class or start building DCF models in the very near future, you will see how it all comes together.
CFA prepares you for portfolio management much more than it prepares you for security selection. I think, if you just want to become a good analyst, you should be much better at accounting and have a general sense of forecasting principles.
Take everything written here with a grain (or plateful) of salt. Cheers!
Thank you! I can see where you are going with your point. That’s actually a brilliant advice for beginners; it’s good to connect the learning outcomes right away with the practice. I believe my friend would like to take the exam in 2021, probably august. That makes it around 7-8 months of studying, 4-5h a day. He’s worried that without having the proper basics in finance, as he will be following the schweser or og guide, he might miss some significant concepts necessary for the exam due to not knowing how „deep” into the concept he shall dive. In simplier words, he kind of doesnt know what he doesnt know, and the beginning is that’s why the hardest - to arrange the study plan most efficiently. I know it’s an unusual case! I myself know too little about CFAs curriculum yet to advise him well. Thank you for your very precious advice. Best!
Are you going to take the exams as well or just your ‘friend’?
SBed.
I over studied for level 1 and probably put in about 400-500 hours. At my buyside firm, it was a friendly competition but I did not want to be the guy who said he failed. I did not need to study so much because I already had a couple of degrees in finance + 7 years of investment experience. I did not study nearly as much for levels 2 and 3. You should probably do the opposite of how I prepared for the exams.
While I agree that less hours are likely necessary for someone like you or I, I'm going to disagree in this particular situation.
The original poster's "friend" is apparently a complete n00b, and needs to learn everything we already learned in school or knew from work going in and as such I'm both going to push both over-studying and using the CFAI materials here. Schweser is essentially a 'cliffs notes' version of the curriculum, and really isn't good if you don't have a solid background. CFAI may be a bit basic for level 1 if you have a background, but is really needed here.
I agree that a noob should study a lot. I guess my point was not to let up on levels 2 and 3. I think a noob will probably have to work super hard on these levels.
Thank you! I appreciate your effort in understanding my friend’s problem and his position. He will most likely need that 500 hours at least. What cought my interest is your insight regarding the study material. You are completely right, and that’s what I thought as well. This isnt a good idea to start with the cfa materials, kinda even no matter which, if one does not have a solid basics in finance. I was wondering whether do you know, or could you please be so kind and tell if only you have any recommendations on mind, what and where would be the best start/way/source to get the basics? Thanks for anything. Im grateful x
Do lots of problems. Make sure you do the CFAI problems and the Schweser problems. Schweser has QBank, which is good at drilling lots of problems on various subjects.
Make sure you do mock exams leading up to the test. The CFAI usually releases some free ones and you can do the Schweser ones. Identifying weak areas and going over the problems you missed is essential. Study Ethics every week.
Mark Meldrum was great for L1 as well, I wrote the exam last month (gratefully) and obviously have not heard back yet but I feel like it prepared me VERY well and cleared up some of the sections that CFAI likes to make confusing. Comes with great cheat sheets and resources. Best of luck!
How did you use MM to prepare with other material? And how long did it take to get through all the videos?
I did all of the readings from CFAI books, and then did review questions from the sections I would do readings on, and then when I started doing full mocks after learning all of the material I would supplement what I was weak on with the MM for the explanations etc. Basically a good support for what I get wrong in mocks or what I am generally weak on. Hope this helps.
I also heard great feedback from friends who used MM.
Wing it. The best shortcut to studying... is not studying at all
You've apparently not ever taken a CFA exam.
You, Sir, dont know sarcasm if it walked up and slapped you across the head with a wet fish. Apparently, your knickers are in a twist ... try to live a little, bhruv
Where can we find the eoc questions in the online cfa material? thanks
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