Top 10 tips for passing the CFA

Kaplan Financial tutor Richie Owens, a CFA charterholder, offers his top 10 tips for passing the CFA exam.

In his 12 years of training experience, Kaplan Financial tutor Richie Owens has seen countless CFA candidates negotiating their way through the programme. Here he offers some useful tips on how to come through the process with the right result

1) Don’t underestimate the time you’ll need to dedicate to the programme. It has a rightly deserved reputation as one of the toughest qualifications, due in no small part to the volume of information a candidate needs to retain. The CFA Institute reports that candidates spend on average 300 hours preparing for each level. A common mistake people make is to think ‘that doesn’t apply to me’. It probably does.

2) Take a structured approach to study. Find out what works best for you. Online classes, live classroom sessions and revision classes – all are available. Passing with nothing but the voluminous official readings alone is a Herculean effort.

3) Don’t skip an area because you think you know it from your every day job. Portfolio management might be your career, but how often do you actually calculate a correlation coefficient from raw historical data?

4) Practise questions. Getting through the readings is a monumental task in itself and many candidates make the mistake of reading and re-reading them at the expense of question practice. You have to know not only the technical content, but how that technical content will be examined.

5) Regularly revisit each topic to keep them fresh instead of revising single topics for weeks at a time. A good trick is to stagger them – read equity and practise fixed income questions one evening, then read economics and practise equity questions the next, and so on.

6) Do a mock exam (or preferably three or four). The exams for each level are six hours in total, three hours in the morning and three in the afternoon. They are daunting and tiring so don’t approach them without going through the experience in a mock situation.

7) Don’t pick the books up with two weeks to go, it won’t work. (I know you’ve heard it before, but this time it’s true). You don’t have the time to read the entire curriculum in two weeks, let alone practise enough questions.

8) Get familiar with your calculator early on in your studies. There are only two allowed in the exam, the Texas Instruments BAII Plus and the HP12C. If you’ve used neither, it’s easier to pick up the Texas. The calculator is a vital time-saving device; it has functions that will perform valuation calculations in seconds that would otherwise take minutes.

9) Each multi-choice question in the exam is worth the same number of marks so don’t get bogged down with long calculations. If a question looks time consuming, leave it until the end. In that way, you’ll always feel ahead of the clock. Better to rush two or three long questions at the end than guess at 15 or 20 that you didn’t have time to attempt.

10) Save time by reviewing the requirement in a question before reading the scenario. This is especially helpful with ethics questions. If you don’t know what the question is asking, you’ll find yourself wasting time reading the scenario, reading the requirement, and re-reading the scenario.