If you ask a CFA charterholder which CFA exam level they found the toughest, they are likely to answer either Level 2 or Level 3.
CFA Level 3 is especially challenging because the exam format also deviates from the multiple-choice format. The constructed response format, or ‘essay’ section, can be very difficult to master for the CFA candidate used to multiple-choice questions.
After passing Level 3 a few years ago, I wanted to share my experience on how I passed CFA Level 3 on my first attempt, in hope that it helps future candidates better approach this exam.
Here’s my effort give something back to the 300Hours community!
First problem: Which materials to use?
If you’ve been browsing the internet looking for information about CFA Level 3, probably you have noticed that, unlike Levels 1 and 2, there are many views on which materials are best to pass the exam.
You will need a solid knowledge of the concept behind each topic, mainly because each essay question often requires different study sessions to be resolved.
In this respect, nothing beats CFA Institute syllabus and its extensive explanations. However, as you may be now thinking, extensive explanations mean extensive curriculum. And time is scarce and extremely valuable.
So, does this mean that you should use third party prep providers’ materials? Well, it is not a “one or another” choice. In fact, the combination of both may be the option that best optimizes the result.
I read Kaplan Schweser and answered CFA curriculum’s End of Chapter (EOC) questions. Nothing new here, right?
But I would also use the curriculum as a supplement: switching to reading the curriculum if I saw that Schweser was not deep enough to answer EOC questions properly.
OK, so how should I study for CFA Level 3?
As mentioned before, Level 3 is about concepts.
This means lots of memorization.
Trying to learn everything by heart won’t work, though. I repeat to make this very clear, it won’t work.
Being a candidate with Management & Law background, I faced the temptation to memorize everything I didn’t understand, as if it was an article from the Civil Code. This temptation becomes bigger as the exam date gets closer.
However, this is not a Law exam and you won’t be asked to repeat like a parrot. You will need to understand the concepts in order to apply them in questions containing both reasoning and numerical parts.
To avoid this, read providers’ material and answer EOC questions from the official CFA curriculum. Make sure you understand everything you read. If your scores in a specific topic are not as good as expected, read the corresponding pages from the curriculum.
Constructed response session: practice a LOT.
You’ve passed Levels 1 and 2, so by now, you already know how important is practicing for the CFA exam.
However, Level 3’s constructed response session is a completely new game which you have never played. And you really want to win. It is essential to get used to the “essay format” questions.
Probably you will know almost all the material a month before exam day, but on the exam day, you will be expected to know how to put into words that knowledge in a limited time. And this is what will make the difference.
I wrote 3 timed constructed response session mock exams a month before exam. I completed none.
Time management is more important than ever. You must know what you are asked and how to answer it briefly, but accurately.
The exam grader is looking for 2-3 ideas in each answer. It doesn’t matter if you used a Shakespearean prose or if you sounded like Sitting Bull.
If you wrote those ideas, you got the points. If not, writing about related concepts that you know about won’t give you any points, so don’t waste your time.
In addition, you are allowed to use bullet points and grammatical mistakes don’t deduct any points, so don’t worry if English isn’t your first language.
By the way, don’t panic if you’re on the last week prior to the exam and you’re unable to finish the essay session of your mocks.
Of course, it is important to get as many points as possible, but I left a couple of questions blank on the exam day and still got the much-desired “Congratulations! We are very pleased to inform you that…”
Remember that for the constructed response section:
– Really watch your time.
– use bullet points – short and to the point.
– Grammatical errors don’t matter.
Item-set session: don’t underestimate it.
So you already know the exam format from Level 2 and morning session requires lots of practice. This inevitably led to many candidates focusing on the essay session, and deprioritizing the practice needed for the item-set session.
This is probably not a good idea.
It’s 50% of your overall grade, and most likely the higher-scoring of the two sessions. Even if you study as hard as you can for essay session, it is very probable that you get 55%-65% of points.
Thus, it is more important than ever to aim for a 70% grade in afternoon session so you can compensate a lower score in the morning.
Make sure you go in strong to ensure that you have as good a chance as possible in passing. Remember my questions left blank? Well, let’s say that a nailed afternoon session can make a mediocre essay session become a pass.
Take some days off before the exam, but not too many.
As recommended by the vast majority of previous CFA Level 3 candidates, I took some days off from work to better prepare for the test.
In both Level 1 and 2, I took off the week before the exam. However, being the last stage of this three-year adventure I wanted to make sure that I was going to pass. Thus, I decided to get 2 weeks off, that is, fourteen full days to focus on reviewing.
I scheduled these days the following way:
- First 2 days: Relax. Time to disconnect from work and rest to be fresh for the following days.
- Next 7 days: Rereading the most important parts of my study notes.
- Next 4 days: Writing one mock a day. Just as in the exam day, constructed response and item-set sessions. Then, check the results and read the explanations of the incorrect answers.
- Last day: Trying to take it easy, just review the formulas to make sure I knew them all.
The plan looked perfect at first sight.
However, after 5 days of reviewing, the much-feared burnout appeared. I started to feel demotivated. I probably hit more than the 344 study hours a typical CFA Level 3 candidate clocked up at this point.
Even if I knew that it was just a week more after three long years of studying, I was unable to focus and had to read every sentence at least two times.
I used two new methods to try to solve this serious issue: studying while taking a bath and cooking to disconnect.
Luckily, these two ideas worked and I was able to stick to the plan (and my girlfriend ate good food for a week). However, if I was on the same situation again, I would consider the risk of study burnout before taking so many days off.
How I passed CFA Level 3: Key Takeaways
- Consider using both CFA curriculum and a third party provider to combine the best of both worlds. CFA Institute has extensive explanation and useful End of Chapter (EOC) questions, third party study materials are succinct and save time.
- Specifically, read CFA providers’ material and answer EOC questions from the official CFA curriculum. If needed, you can refer to CFA curriculum to plug the knowledge gaps of third party study materials.
- Practice a LOT for constructed response session, preferably under exam condition. Learn how to self-grade essay questions better and be great at answering them. If you run out of study time, look through the question and model answers to speed through your review before exam.
- Don’t forget or underestimate the item set session either! This is likely the part that will bring your average score up.
- Take time off from work before exam for final preparation. Be mindful of burnout risk.
Hopefully my experience and some of these tips will work for you too on the challenge that Level 3 represents. If you have anything you’re not sure about, you can reach out to us either at the Forum or via comments below.
Meanwhile, here are other related articles to help your CFA Level 3 preparations:
- Free and Upgraded – 300Hours CFA Study Planner
- CFA Level 3: How to Prepare and Pass CFA in 18 Months
- CFA Level 3 Tips: Top 10 Advice from Previous Candidates
- CFA Level 3 Topics: What Is The Best Study Order?
- How to Be Great at Answering CFA Level 3 Essay Questions
- How to Accurately Self-Grade Your CFA Level 3 Essay Questions
- 2022 CFA Exam Curriculum and Topic Weight Changes
- Fast Track CFA Charter: How to Pass the CFA Exams in the Fastest Way Possible
- Free 300Hours Guides
- Free CFA Study Materials