For most candidates who sat the CFA Level 1 exam in May — one of the toughest tests in finance — there was a huge sense of disappointment when results came out last week.
Just 25% of the nearly 26,000 people who sat the test made the grade; the lowest pass rate since the exams were created in 1964.
Those who took the CFA Level 2 exam over the summer were left equally disheartened. The 40% that passed was the lowest proportion since 2010, when 39% made the cut.
CFA exams are notoriously difficult to crack, requiring those sitting them to put in around 300 hours of study for each level alongside their day jobs. It can take around four years to complete the full set of tests.
The CFA’s full programme of exams — which culminate in achieving its prized charterholder status — are often seen as essential qualifications for aspiring portfolio managers and investment analysts in the City.
Those who failed to make the cut in the recent round of exams will be weighing-up whether to pay the fee of between $700 and $1,000 to re-take them, or throw in the towel completely.
For those yet to decide, recruitment experts say having the CFA under your belt is still well worth the effort.
Logan Naidu, chief executive of financial services recruitment firm Dartmouth Partners, said: “All things being equal, someone with a CFA would have an edge over another candidate and someone without a CFA.
“Not everyone asks for the CFA, but quite often it is seen as the badge or qualification to have.”
David Harms, a partner at executive recruiter Valentine Thomas & Partners, said: “It still has value in the industry, just for the sheer effort and commitment to get through it. It is not a pre-requisite, but it holds a high place in the industry.
“It proves someone is prepared to invest the time in the industry they want to work in. For some roles, what you see is some firms want a greater level of depth and knowledge that comes with a CFA.”
One asset management recruiter said for those who failed the most recent exams, the time, additional study, and expense to retake them was worth it.
“Nobody was on their best form during lockdown, but if you’ve made the effort, keep going to finish it, bite the bullet and pay the fee to re-sit,” they said. “It’s about that first step in the door.”
The CFA said the level of difficulty of the May Level 1 exam was “consistent with previous Level 1 exam administrations, and this is the case whether we look back to paper-based testing or computer-based testing, which we introduced in February this year”.
More than 300,000 candidates deferred their exams following the onset of the Covid pandemic last year. The CFA said by the time exams were taken in May, approximately 200,000 had sat tests, although it continues to address the backlog.
The CFA said it believed the “the stop-start nature of the deferred candidates’ studies is reflected in the overall passing rate” for May.
One CFA Level 1 candidate said on LinkedIn: “As someone who had their test deferred three times due to the pandemic, this plays a major role in it. I had prepared the first time around, and the second time around, but I personally lost some interest in the exam by the time I wrote it.”
They added: “As for the difficulty of the exam, I didn’t find it that much more difficult than any of the practice exams found online or through CFA prep courses.”
James Thornton-Dewhirst, managing director of fund management executive search firm IM Partners, said asset managers rarely asked his firm to identify candidates with the CFA as an “essential requirement”.
However, he said there remain benefits to obtaining the CFA qualifications.
“Where it still adds value is the confidence and knowledge it can give to investment analysts, and also ensuring they have a well-rounded skillset,” said Thornton-Dewhirst.
“The main issue is the inordinate about of time they take to study for. Alternatively it’s now easy enough for resourceful investment analysts to teach themselves for free on the internet.
“So it’s a case of weighing up whether you have the time to take a structured syllabus, or would prefer to teach yourself – at the expense of not having a formal qualification denoting your knowledge, and possibly risking gaps in your understanding.”
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