CFA Pass Rates: How Hard Are The CFA Exams?

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[Updated for the Aug’21 CFA exams]

CFA pass rates are a factor in most candidates’ consideration on whether to sign up for the CFA exams. If pass rates are too high, it lacks prestigiousness. If it is too low, it is too difficult and may not be worth the effort.

Tricky, eh?

Often branded the ‘world’s hardest exams’, we often get questions from our readers on exactly how difficult the CFA exams could be. The short answer? It’s hard, but not the hardest?

In this article, we try to approach this question objectively, with historical CFA pass rates and third party benchmarking studies in order to help you decide whether CFA exams are worth the challenge.

Let’s go!


Overview of CFA Pass Rates Since 2010

historical cfa pass rates since 2010

The latest CFA pass rates are:

  • 26% for Level 1 (Aug21)
  • 29% for Level 2 (Aug21)
  • 39% for Level 3 (Aug21)

As one would expect, the average pass rates increases as one progresses throughout the 3 levels. Since 2010, the historical CFA pass rates for:

  • Level 1 ranges from 22%-49%, with a 11-year average of 40%;
  • Level 2 ranges from 29%-55%, with a 11-year average of 45%;
  • Level 3 ranges from 39%-56%, with a 11-year average of 53%.

The pandemic – which coincided with the introduction of computer-based exams and increased testing schedule – seems to have changed the pass rates trends significantly for all 3 levels.

There is insufficient data or insights on why this may be happening, although we have a few theories of why the CFA pass rates are so low.


CFA Level 1 Pass Rates vs. Candidate Volume

CFA Pass Rates: How Hard Are The CFA Exams? 1

CFA exam’s popularity is evident in this chart, with Level 1 candidate growth accelerating steadily since 2015. This has taken a hit since the pandemic, with annual candidate volumes about 60% of previous years.

CFA Level 1 pass rates have remained relatively stable and above 40% since 2014 for paper-based exams. The recent Dec20 exam’s jump in Level 1 pass rate to 49% is most likely due to the additional time candidates have due to multiple COVID-19 exam postponements.

Unfortunately not many candidates were able to sit for the exam even in Dec20 due to the ongoing pandemic situation, and this is reflected in Feb21’s data as well.

However, in May’21, CFA Level 1 has experienced a monster drop in pass rates – since 2010, the historical CFA pass rates for Level 1 had been about 36%-49%, averaging 42%. This has dropped to 25% in the May’21 exams, and further dropped in Jul’21 to 22%, before rebounding to 26% in Aug’21.

CFA Institute’s official guidance states that the minimum passing score reflects the score that can be achieved by a ‘just competent’ candidate, which is supposed to be consistent across the years, whether it’s 2010, 2015 or 2020. If we assume this holds true, this implies the average CFA Level 1 candidate quality for May’21 and Jul’21 was significantly lower compared to past exams.

CFA Institute has implied that this low pass rate is temporary, and due to pandemic disruption:

Going forward, we do expect the pass rate to approach pre-COVID historical levels in time — so long as pandemic conditions subside. As we have said before, the exams and the process for setting the minimum passing score have not changed. Unfortunately, the many challenges posed by life during a pandemic have clearly made the process more daunting.

Peg Jobst, Managing Director, Head of Credentialing, CFA Institute

This makes some sense. However, our MPS analysis also indicates that the MPS itself has increased significantly – above the usually-recommended 70% mock exam target score.

A low passing score due to pandemic disruption does not explain why our MPS estimates have been increasing – that is, of course, assuming our MPS estimates are accurately reflecting what’s really going on!


CFA Level 2 Pass Rates vs. Candidate Volume

CFA Pass Rates: How Hard Are The CFA Exams? 2

The story for CFA Level 2 pass rates and candidate volume is similar to Level 1:

  • Level 2 pass rates were relatively stable and above 40% since 2011, with a significant jump to 55% pass rates for Dec20 Level 2 candidates.
  • Level 2 candidate growth has been accelerating since 2015 as well, but this has dropped to lower levels since the pandemic and CBT format change.
  • Excluding the Dec’20 ‘pandemic exam’, pass rates have been on a steady/downward trend since 2017. The latest Aug21 results recorded the lowest Level 2 pass rate of 29%.

CFA Level 3 Pass Rates vs. Candidate Volume

historical cfa level 3 pass rates and candidate volume

CFA Level 3 is a little different from other levels, whereby the pass rates are very stable and consistently higher than the rest. This can be explained by natural selection: Level 3 candidates by definition are highly skilled and knowledgable at this point, having passed Level 1 and Level 2.

Similarly to Level 1 and Level 2, CFA Level 3’s pass rate experienced a big drop during the May21 exam cycle, and recorded a new low of 39% in Aug21 exam. One noticeable difference is the Level 3 Aug21 exam cohort is really small, with only 2,769 candidates taking the exam.


How Hard Is CFA?

OK we have seen all the historical trends in CFA pass rates, but that still doesn’t really tell us how difficult these exams are?

Perhaps a more objective way to assess CFA exam’s difficulty lies in the UK NARIC’s (National Academic Recognition Information Centre of the United Kingdom) benchmarks.

cfa difficulty comparison financial designation

According to UK NARIC, the CFA exams have been benchmarked individually by Level under UK Regulated Qualifications Framework (RQF):

  • CFA Level 1‘s difficulty is comparable to a Diploma of higher education (Level 5 qualification under RQF);
  • CFA Level 2‘s difficulty is comparable to a Bachelor’s degree (Level 6 qualification under RQF);
  • CFA Level 3‘s difficulty is comparable to a Master’s degree (Level 7 qualification under RQF).

Considering that RQF Level 8 implies a difficulty equivalent to PhD programs, passing all 3 levels of the CFA exams is certainly not easy!


Hope you found the statistics above useful!

Meanwhile, here are some related articles that may be of interest:

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9 thoughts on “CFA Pass Rates: How Hard Are The CFA Exams?”

  1. Hmmm seems like L2 & 3 could both be bucketed in the “Master’s Degree” level. L2 complexity definitely exceeds a bachelor degree in finance/economics.

    Reply

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