So you’ve finally registered for the CFA exams as a Level 1 candidate. Welcome!
Facing the first challenge of your CFA journey can be overwhelming. But that’s normal. And you are not alone, because we are here to guide you through this.
Here are the 10 golden rules and advice – distilled from thousands of experienced candidates and CFA charterholders – that every Level 1 candidate should know.
#1 – Start Early, and Start Right
Aim to start studying about 5-6 months before exam day: I generally recommend January if you’re taking the June exams, and June if you’re taking the December exams.
Ease into it and slowly ramp up – remember that you’re in for 300 hours of study, that’s 11.5 hours of study time per week over 6 months. Don’t jump in all guns blazing or you’ll burn out long before the exam arrives. This however is just a recommendation – time needed varies depending on your background, especially in Level 1. If the material is less familiar to you, start earlier. If you think you’re hardcore/smart/already-know-all-this, start later at your own risk.
Have a study plan – use our upgraded, free study plan that thousands of our readers have used effectively.
Consider third party resources to save time – Do take the time to look at additional study materials, especially if you are planning to start by reading the CFA Institute syllabus. I would advise starting with a more summarized material and utilize the CFA Institute syllabus for their practice questions and further clarification (if needed).
#2 – Clear Your CFA Plan with Family and Friends
Understand the time commitment required to pass this exam: Yes, I’m talking about you yourself. This exam will consume copious amounts of your time, aside from your usual life commitments. It is pretty hard to balance studies and expect the rest of your life to continue as usual.
Understand that you will be stressed, tired and cranky: Especially as the exam approaches. And this means sometimes you won’t be at your best around your other life commitments.
Communicate these challenges to everyone important in your life:
- Now that you know what it entails and what it does to you, get an early buy-in from everyone you will be pissing off. This includes your parents, girlfriend/boyfriend, husband/wife, roommates, boss, coworkers, dog/cat.
- Take the time to explain that you are taking an extremely taxing set of exams, and during this time you may be not as awesome in your commitments to them as before. By explaining beforehand, this will make them more understanding when you miss their birthday celebration, for example.
#3 – Target 300 Hours of Study For Level 1, At Minimum
The material in CFA Level 1 is not difficult to understand, but the difficulty is in the sheer volume of the material, especially for those new to finance.
Some guides may tell you to target 250 hours, but on average this will not be enough. In previous CFA Institute candidate surveys, a typical Level 1 candidate spent an average of 285-300 hours to prepare for Level 1 exams.
In our experience, 300 hours is a good amount of time to sufficiently cover the Level 1 curriculum and complete sufficient practice exams.
That said, 300 hours is probably a minimum number as this obviously varies across levels and background. But the message could not be clearer – do not underestimate the exam. So make 300 hours your target.
#4 – Do Not Ignore Ethics, Save It For Last
Skipping Ethics is a common mistake among Level 1 candidates, which is understandable after attempting to read the CFA curriculum on Ethics for the first time.
In fact, skipping Ethics is NOT an option for several reasons:
- Ethics is a key topic across all 3 levels of CFA exams, with a minimum of 10% topic weight.
- Ethics material is almost identical across levels so you’re laying a good base not just for Level 1 success, but for future levels as well.
- Your Ethics score will decide whether you pass or fail if you’re near the Minimum Passing Score, i.e. the ‘ethics adjustment’. Sure, you can skip Ethics and still pass if you’re crazy amazing at everything else, but that’s a rarity.
If the Ethics reading in CFA Institute curriculum is too dry, do invest in third party study material to get through this, but definitely don’t discount it!
Final Ethics pro tip – save this reading for last, as we find this is the optimal study order for Level 1.
#5 – Befriend Your Calculator As Soon As Possible
Your calculator is your friend.
Most study materials include a good guide on how to use a particular type of calculator (Texas Instruments BA II Plus is most popular), so study that at the first opportunity in your notes revision.
Also, remember to try and bring two identical ones to the exam in case your first one fails.
If you need more tips on calculators, these articles can help:
- CFA Calculator Guide: Texas Instruments BA II Plus vs Hewlett Packard 12C
- The 300 Hours CFA Guide to the Texas Instruments BA II Plus Calculator
- The Ultimate List of BA II Plus Calculator Tips for Your CFA Exam
- The HP12C Calculator Guide for the CFA Exams
#6 – Practice (Exams) Makes Perfect
Many first-time candidates spend a lot of time reading the curriculum and study notes.
In fact, it is pretty common for Level 1 candidates to plan to finish reading notes right before exam day. This is a huge mistake.
Study notes give you the foundation, but practice exams is the hammer that actively drives it all into your brain. When reading notes, plan to work through a few topical questions at the end of each reading.
Plan to finish reading through your notes early, and get started on full practice exams 4-6 weeks before exam day. An actual timed practice exam will tell you if you need to worry about time (a genuine concern for Level 1), and also gauge your current performance when you grade it. Aim to finish about 6 exam sets (1 set of 2 x 120 questions) in total, more is better.
#7 – Aim for 70% Score, But Don’t Freak Out If You Don’t Reach It
General wisdom is that the Minimum Passing Score (MPS) set by the CFA Institute will never be higher than 70%.
Although this is unlikely to ever be verified, I generally accept this to be true, as 70%-100% is the highest score bracket you can get for any topic in your results report, and it would be strange indeed if a candidate scored 70%-100% in all topics but still failed. So aim for 70% and above in your practice exams.
However, if you’re anything like me, the first time you eagerly grade your first practice exam will result in a rude shock – you’ll probably score lower than you expected. Don’t freak out – augment your test taking with notes revisions and you will improve.
70% in the actual exam equals success, but it doesn’t mean that sub-70% equals failure.
#8 – Stop to Prepare for Exam Day. Because You Will Forget
In the midst of all this hardcore studying, it pays dividends to take a few minutes to sort out logistics of the exam day.
A few weeks before exam day, read my article on what to bring and how to get there, and if you live close enough you might want to visit the test centre beforehand.
Do not trip at the finish line because you prepared badly from a logistical side. A forgotten passport realized too late is all it takes. You’ve been warned!
#9 – Keep An Eye On Time, 90 Seconds Per Question
From the sheer volume of questions in Level 1, the risk of not completing the paper is always there.
If that is threatening to happen to you, you want to blindly guess the rest before ‘put your pencils down’ is heard. There is no penalty or negative marking for guessing. All ‘B’s on all questions you haven’t a clue or haven’t had time for is better than nothing at all.
Refer to our separate guide on time management strategies for the Level 1 exam →
#10 – Be Very Good During and After the Exam
This might sound obvious, but the CFA Institute is very, very strict on exam procedure and behavior.
If a proctor reports that you could be in breach of the rules, all your work is in jeopardy, and this happens to candidates every year. Seriously, don’t mess with the proctors.
In fact, don’t mess with anyone except the exam paper. Just sit still, be quiet and look straight ahead for the few extra seconds as your paper is collected then you can leave. You’ve waited this long, what’s a few more moments?
Following the exam, please do not compare or discuss questions, or attempt to recreate the exam. You will get busted and banned from taking future exams.
Level 1 may be daunting, but the advice above should steer you on the right direction for a solid head start. Any questions? Feel free to comment below and I’ll respond personally 🙂
Meanwhile, here are other useful articles that should help your Level 1 preparations:
- Free and Upgraded – 300Hours CFA Study Planner
- CFA Level 1: How to Prepare and Pass CFA in 18 Months
- CFA Level 1 Topics: What Is The Best Study Order?
- 2020 CFA Exam Curriculum and Topic Weight Changes
- Fast Track CFA Charter: How to Pass the CFA Exams in the Fastest Way Possible
- Free 300 Hours Guides, including the 10 Commandments
- Free CFA Study Materials 2020