This article is based on analysis from our CFA Insights all-in-one guide. You can get a copy online or in print.
If you don’t have a finance-related background, are you disadvantaged when it comes to the CFA exams?
Since 2012, we’ve set out to find some clues to shed some light on just that. In our CFA Results Analyzer, we have a question where candidates can input their work and education background, indicating whether their backgrounds were finance-related or not. (Note: The CFA Results Analyzer only applies to CFA exam results before Dec 2017 – it no longer works if you receive results in the new format)
Given enough of a sample size, we could then compare the various background profiles with pass rates, and see how pass rates varied across candidates that had different backgrounds in work and education.
The results were quite surprising. Read on to find out!
- Finance-related work and educational background (Work & Edu)
- Finance-related work background only (Work Only)
- Finance-related educational background only (Edu Only)
- No finance-related background (No Background)
We then deduced the pass rate for each profile, as illustrated in the chart.
The surprising thing was that the profile with the lowest pass rate was not necessarily the No Background group, which was what we initially expected. In CFA Level II, the group at the bottom of the pass rate chart were actually candidates from the Edu Only group. In other CFA Levels, No Background and Edu Only groups have similar levels of performance, and both consistently underperform the other two remaining groups.
So why does the Edu Only group sometimes end up performing the worst?
Of course, there are many possible causes to what we’re seeing, but our theory on this is complacency. Common feedback we get from readers who write in is that candidates with finance or economics degrees may take it easier than other candidates. Additionally, without a work requirement to spur them on, candidates may find it difficult to maintain the drive and discipline necessary to complete their preparations properly.
- Not having any finance background doesn’t mean you’re hugely disadvantaged. Your drive and study discipline will be a far stronger determinant in your CFA exam success than your background.
- A finance-related education has a real threat of being undermined by complacency. The CFA exams are challenging. Don’t assume your background in finance will allow you to take it easy in your preparation.
- Some CFA levels may suit you more than others. Depending on what you’re strong at and your contextual knowledge, you may find some CFA levels easier than others as the approach and content vary significantly, especially in Level III.
- The important thing is to remain driven, regardless of what advantages you may think you have.
In addition, the guide contains the best tips from our own experience across the 300 Hours team – a unique team where all of us have completed the CFA program. From just considering whether the CFA program is for you, to receiving your CFA charter and making the most of it, we have combined our collective experience into one guide you can use throughout your CFA journey.