Considering the Chartered Financial Analyst (CFA) qualification and wondering what is it all about?
Here’s our ultimate, summarized CFA exam overview on all the details you need to know.
What is CFA exam about? A quick overview
The CFA charter is a world-renowned qualification in the investment management sector, and increasingly the “gold standard” for portfolio managers, wealth managers research analysts, and investment professionals in general.
It is a Masters / postgraduate level degree focused on building expertise and real-world skills in investment analysis.
Since the inception of the first exams in 1963, more than 190,000 CFA charterholders have successfully obtained the designation. They are employed internationally at nearly every major investment bank, asset management firms, hedge funds, consulting firms, and more.
There is fast-growing demand for the CFA charter – candidate registrations have grown by an average of 10% per year since 2012, with 270,000+ candidates globally in 2019 (2020-2021 figures are impacted by pandemic postponements).
In particular, the year-on-year growth has been accelerating since 2015 – we expect this trend to continue given increasing demand from emerging markets.
CFA exam format and structure
The CFA exam consists of 3 levels, with each Level’s exam split into 2 sessions.
The exams are now computer-based, conducted exclusively in English, in person at 400+ exam sites around the world. You can find out your nearest exam center here. Candidates can only register for the next level exam only if they passed the current level.
In terms of pass criteria, there are no negative markings for incorrect answers. The minimum passing score – that isn’t publicly disclosed – is determined by the exam committee each year.
Here are more details on each exam’s format, structure and duration:
Level 1
| CFA Level 1 Exam Structure and Format | |
|---|---|
| Exam Frequency | Held 4x a year in Feb, May, Aug and Nov. See the latest CFA exam dates and our journey planner tool for more information to plan your registration. |
| Question format | Multiple choice questions (MCQ) |
| Exam Structure & Duration | Level 1 exam is 4.5 hours with 180 MCQ in total, split into 2 sessions: – 1st session (2 hours 15 min) has 90 MCQ. It covers 4 topics: Ethics, Quant Methods, Economics, and Financial Reporting and Analysis – 2nd session (2 hours 15 min) also has 90 MCQ. It covers the remaining 6 topics: Corporate Finance, Equity, Fixed Income, Derivatives, Alternative Investments and Portfolio Management |
| Results Availability | Within 60 days of exam via email, with a simple pass or fail and a 2 page breakdown of your performance by topic. |
Level 2
| CFA Level 2 Exam Structure and Format | |
|---|---|
| Exam Frequency | From 2023, held 3x a year in May, Aug and Nov. See the latest CFA exam dates and our journey planner tool for more information to plan your exam registration. |
| Question format | Item-set based multiple choice questions (MCQ), whereby questions in each item set must be answered based on the information in the vignette. Each item-set has 4-6 questions related to it. Each question is worth 3 points. |
| Exam Structure & Duration | Level 2 exam is 4 hours 24 minutes with 88 MCQ in item set format in total, split into 2 sessions: – 1st session (2 hours 15 min) has 44 item-set MCQ. – 2nd session (2 hours 15 min) also has 44 item-set MCQ. |
| Results Availability | Within 60 days of exam via email, with a simple pass or fail and a 2 page breakdown of your performance by topic. |
Level 3
| CFA Level 3 Exam Structure and Format | |
|---|---|
| Exam Frequency | From 2023, held twice a year in Feb and Aug. See the latest CFA exam dates and our journey planner tool for more information. |
| Question format | Level 3 has a mix of constructed response (essay) and item-based multiple choice questions (MCQ). Item-set based multiple choice questions (MCQ), whereby questions in each item set must be answered based on the information in the vignette. Each item-set has 4-6 questions related to it. Each question is worth 3 points. |
| Exam Structure & Duration | Level 3 exam is 4 hours and 24 minutes, split into 2 sessions. Both sessions are 2 hours and 15 minutes each, with item-set and constructed response (essay) now mixed within a session. So each session either has 6 item sets and 5 essay sets OR 5 item sets and 6 essay sets. Overall, the CFA Level 3 exam has 11 item sets and 11 constructed response sets, with 12 points each set. |
| Results Availability | Within 90 days of exam via email, with a simple pass or fail and a 2 page breakdown of your performance by topic. |
CFA exam pass rates & difficulty
The latest CFA exam pass rates are:
- 37% for Level 1 (Aug 2022)
- 40% for Level 2 (Aug 2022)
- 48% for Level 3 (Aug 2022)
As one would expect, the average pass rates increases as one progresses throughout the 3 levels. Since 2010, the historical pass rates for:
- Level 1 ranges from 22%-49%, with a 12-year average of 39%;
- Level 2 ranges from 29%-55%, with a 12-year average of 43%;
- Level 3 ranges from 39%-56%, with a 12-year average of 50%.
Sure, pass rates do give us a vague idea of the famously difficult CFA exams – but really, how hard are the exams?
Thankfully, we have an objective answer for you.
According to UK ENIC (European Network of Information Centres), the CFA exams have been benchmarked individually by Level under UK Regulated Qualifications Framework (RQF):
- Level 1‘s difficulty is comparable to a Diploma of higher education (Level 5 qualification under RQF);
- Level 2‘s difficulty is comparable to a Bachelor’s degree (Level 6 qualification under RQF);
- 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!
CFA topic weights
The CFA designation is quite unique in the sense that it mostly sticks to the same 10 core topics across 3 levels, with increasing complexity and difficulty of testing as you progress.
Level 1 exam does not assume any prior finance knowledge, mainly focused on introducing candidates to a wide range of terms and concepts from the 10 main topic areas (see table further below). The Level 1 exam consists of two sessions, each with 90 multiple-choice questions done in 2 hours 15 minutes.
Level 2 exam builds on the foundation of Level 1, with a stronger focus on analyzing and applying the concepts learned. The Level 2 exams also consists of two sessions, each with 44 item-set style questions (multiple-choice) done in 2 hours 15 minutes.
Finally, the Level 3 exam is heavily focused on applying what you’ve learned in portfolio management and wealth planning topics. New from 2023 onwards, the CFA Level 3 exam consists of two 2 hour and 12 minutes sessions, each session consists of a mix of constructed response questions (essay) and item-set questions.
Here’s a quick summary of the latest topic weightings for all 3 Levels for CFA exams:
| Topic Areas | CFA Level 1 Topic Weights | CFA Level 2 Topic Weights | CFA Level 3 Topic Weights |
|---|---|---|---|
| Ethics | 15-20% | 10-15% | 10-15% |
| Quantitative Methods | 8-12% | 5-10% | – |
| Economics | 8-12% | 5-10% | 5-10% |
| Financial Reporting & Analysis (FRA) | 13-17% | 10-15% | – |
| Corporate Finance | 8-12% | 5-10% | – |
| Equity investments | 10-12% | 10-15% | 10-15% |
| Fixed Income | 10-12% | 10-15% | 15-20% |
| Derivatives | 5-8% | 5-10% | 5-10% |
| Alternative Investments | 5-8% | 5-10% | 5-10% |
| Portfolio Management | 5-8% | 10-15% | 35-40% |
For the latest info on CFA curriculum and topic weight changes, check out this guide.
CFA exam fees & costs
The CFA enrollment and registration fees are just one aspect of the total exam costs to consider. With these tough exams, it’s likely that candidates would need to budget for third party study materials to help save time.
For the 3 levels of the CFA exam, a realistic estimate of a total cost range is $3,100-$7,900 to complete your charter, consisting of a $1,300-$2,900 budget for Level 1, and $900-$2,500 each for Level 2 and Level 3 respectively. This doesn’t account for retake costs though.
As fees are a big topic in itself, check out our infographic above, along with our summary of CFA exam realistic costs you’ll need to budget for.
CFA exam schedule & key deadlines
For the latest key dates of the upcoming CBT exam cycles in 2023, check out our latest article on CFA exam schedule, key dates and deadlines.
What are the CFA program requirements?
CFA Level 1 requirements
To register in the CFA program as a Level 1 candidate, you’ll need to meet one of the following enrollment requirements:
- Have a Bachelor’s degree; OR
- Have 2 years remaining in a Bachelor’s program (or equivalent) for Level 1 registration. In particular, your selected exam window must be 23 months or fewer before your graduation month for your bachelor’s degree or equivalent program. Degree program must be completed prior to Level 2 registration; OR
- Upon Level 1 registration, you must have at least 4,000 hours of work experience and/or higher education that was acquired over a minimum of 3 consecutive years. If you have a combination of work experience and higher education to achieve the minimum hours and years, assume that higher education takes 1,000 hours per year.
For more details, check out our CFA entry requirements article.
CFA charterholder requirements
In order to be become a CFA Charterholder and be able to use the CFA designation after your name, the following conditions must be fulfilled:
- Pass all 3 levels of the CFA exams;
- Have at least 4,000 hours of relevant work experience completed in a minimum of 3 years;
- Submit 2-3 professional references;
- Apply to become a regular member of CFA Institute (cost US$275 per year)
Benefits of the CFA certification
The CFA designation is the leading investment designation with worldwide recognition, and getting this certification certainly sets you apart from the rest.
Once you achieve this designation, you can expect to:
- Differentiate yourself and signal your credentials in the finance industry
- Enhance career growth and increase job mobility in the finance and investment management sector
- Become a part of a prestigious, global group of CFA charterholders
- Be recognized globally as a leader in investment management
- Command better remuneration package and job opportunities
Although top tier firms prefer to hire CFA charterholders, and there are many benefits to getting a CFA charter, it is worth remembering that this designation itself is not a golden ticket to jobs.
CFA vs FRM vs CAIA: Which is right for you?
The Chartered Financial Analyst designation covers a broader scope of financial analysis, portfolio management and investment topics, whereas FRM and CAIA are more narrowly focused on risk management and alternative investments specifically.
From a career building perspective, CFA, FRM and CAIA are quite comparable in their respective fields as they are globally recognized designations with ample employment opportunities. Plenty of finance professionals obtain one or two of these qualifications to better perform in their roles and career.
Ultimately, it all depends on your preferred career route: if you’re into risk management, FRM is the clear choice. If you’re less sure but keen on a career in finance, perhaps CFA is a better choice for a broader finance base. If you’re into alternative assets, CAIA is a good specialization to go for.
Here’s a quick summary comparing the three designations:
| CFA | FRM | CAIA | |
|---|---|---|---|
| Pre-exam qualifications | See CFA entry requirements for a summary. | None. There are no educational or professional prerequisites needed to register. | None. However, basic foundation in finance and quantitative aptitude is desirable. |
| Study Areas | 10 Topics: Ethics, Quantitative Methods, Economics, Financial Reporting & Analysis, Corporate Finance, Equities, Fixed Income, Derivatives, Alternative, Portfolio Management. | 10 Topics: Foundations of Risk Management, Quantitative Analysis, Financial Markets & Products, Valuation and Risk Models, Market Risk, Credit Risk, Operational Risk, Liquidity & Treasury Risk, Risk Management in Investment Management, Current Issues. | 8 Topics: Professional Standards and Ethics, Current & Integrated Topics, Asset Allocation & Institutional Investors, Private Equity, Real Assets, Commodities, Hedge Funds & Managed Futures, Structured Products. |
| Number of Exams | 3 levels (pre-2021, the fastest route is in 18 months. From 2021, it reduces slightly to 15 months.) | 2 Parts (you can sit for both parts in one exam day) | 2 levels (unlike FRM, you cannot sit for both exams in the same exam window) |
| Exam Frequency | Level 1: 4x a year (Feb, May, Aug and Nov). Level 2: 3x a year (May, Aug and Nov) Level 3: 2x a year (2023 onwards Feb and Aug). | Part 1: 3x a year (May, Jul, Nov) Part 2: twice a year (May, Nov) | For both Levels: Twice a year in March and September. |
| Exam Format | Level 1: Multiple choice questions Level 2: Item set questions Level 3: Item set and constructed response questions | Part 1 & 2: Multiple choice questions | Level 1: Multiple choice questions Level 2: Multiple choice and constructed response questions |
| Pass Rates | The range of CFA pass rates since 2010: Level 1: 22%-49% Level 2: 29%-55% Level 3: 39%-56% | The range of FRM pass rates since 2010: Part 1: 39%-53% Part 2: 50%-62% | The range of CAIA pass rates since 2010: Level 1: 52%-74% Level 2: 56%-64% |
| Fees and Costs | One-off Enrollment Fee: $350 Registration fee (per level): $900-$1,200 Retakes: same as registration fee | One-off Enrollment Fee: $400 Registration Fee (per Part): $600-800 Retakes: same as registration fee | One-off Enrollment Fee: $400 Registration fee (per level): $995-1,395 Retakes: $450 per level (March 2023), $795 from Sep 2023. |
| Study Hours Needed | At least 300 hours per level | 200-250 hours per part | At least 200 hours per level |
| Post Exam Requirements | To become a CFA charterholder: Pass all the 3 levels of CFA exams; 4 years of qualified investment work experience; Submit reference letters for 2-3 professional references; Become a regular member of CFA Institute; Adhere to CFA ethics and professional conduct. | To become FRM-certified: Pass both FRM papers; a minimum of 2 years professional full-time work experience in the area of financial risk management or another related field; maintain membership. | To become a CAIA charterholder: Pass both levels of CAIA exams; Hold a bacherlor’s degree, or the equivalent, and have at least 1 year professional work experience; or alternatively, have 4 year professional work experience; Abide by CAIA’s member agreement; Pay CAIA membership fees. |
While famous for being difficult, the CFA designation can be a powerful boost to your resume as a finance specialist, given its global recognition and broad appeal.
Be it asset management, wealth management, research, corporate finance, consulting, risk management, banking, insurance, pension and even fintech etc, you can find CFA charterholders having a career in a broad range of sector and job functions.
CFA charter can be a particularly impactful investment in the earlier stage of your career, e.g. after 3-5 years work experience. It is a good choice for those committed to a career in finance while opening up a broader range of options for the future.
Decided to take on the Chartered Financial Analyst exams? Awesome! Here are the best resources for Level 1 candidates:
- Free and Upgraded – 300Hours CFA Study Planner
- CFA Level 1 Tips: Top 10 Advice from Previous Candidates
- CFA Level 1: How to Prepare and Pass CFA in 18 Months
- CFA Level 1 Topics: What Is The Best Study Order?
- 2022 CFA Exam Curriculum Changes and Topic Weights
- 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 2022
Undecided on the CFA Program? No worries! You may find other related qualifications in our Beginner’s Guide series of interest:
- FRM (Financial Risk Manager): A Beginner’s Guide
- CAIA (Chartered Alternative Investment Analyst): A Beginner’s Guide
- IMC (Investment Management Certificate): A Beginner’s Guide
- EFFAS Certified ESG Analyst (CESGA): Our Epic Guide
- SCR (Sustainability & Climate Risk) Certificate: A Beginner’s Guide
- Certificate in ESG Investing: A Beginner’s Guide
Hi Melanie, yes as per the previous comment above, CFA Institute has frozen the syllabus for 2020-2021. So the 2021 syllabus will be the same as 2020 and you can use your current Kaplan Schweser books for May21.
Hey , if I give CFA Level 1 November 2023 will I be able to sit for CFA level 2 in May 2024?
Hi Divya, yes you can if you pass CFA L1 Nov 2023, although it would be quite tight timing as realistically you have 4 months to study for CFA Level 2.
Hello, I’m planning to register for CFA Exam on May 2021. Is it possible to study from the Kaplan Schweser 2020 books?
I’ve re-registered for the Feb21 exam from the Dec20 exam. Will my Dec20 books become obsolete in terms of syllabus?
Hi Nikita, as a result of coronavirus, CFA Institute has frozen the syllabus for 2020-2021. So the 2021 syllabus will be the same as 2020 and you can use your current books for Feb21
Hey Sophie, Thank you so much. Me too had the same question.