One of the highest qualifications in the world of finance is the Chartered Financial Analyst certification, and the journey of earning the certification does not necessarily take an easy route. So a great deal of myths and misinformation abounds regarding the earning of the CFA certification. Even if a few of the prevailing myths may appear harmless at a surface level, they may be misleading and affect the preparation of the CFA certification and impede the progress of the individual.
Since you know “What is CFA”; so, here we will be discussing the most prevalent CFA exam myths, dissecting them, and giving you the correct facts so that you know how to tackle your CFA exam journey properly. If you’re sitting the CFA exam, it’s vital that you know the myths and the real facts behind them if you’re going to succeed.
Myth 1: “You don’t need to study as much as you think.”
One of the strongest CFA exam myths is that it does not take nearly the study effort that you might assume it does. The CFA exam does take a great effort; however, candidates often don’t know the effort it will take in order to succeed. Just to put things into a realist’s frame of reference, the majority of candidates that pass the CFA exam study around 300 hours per CFA exam level. This includes the study of the CFA study guides, completing the CFA sample questions, and reviewing the major concepts. You’re definitely headed toward failure if you assume that you will be able to get through the study guides within a few weeks.
Truth: Proper CFA preparation requires a lot of study time, and the CFA exam difficulty should not be ignored. Enough time should be spent in order to study each subject thoroughly.
Myth 2: “The CFA Institute study materials are all you need to pass the exam.”
Several candidates presume that the study guides that the Chartered Financial Analyst Institute has developed and provided (official study program) will be enough in passing the exam. The CFA Institute study guides are highly comprehensive and provide the study framework; however, they may not be enough in guiding you through if you’re tight on schedule or struggling with specific subject areas.
Truth: Third-party study guides, including Schweser and Wiley, will be used to supplement the CFA study guides and provide alternate perspectives, outlines, and sample questions. The CFA study guides will be a necessity at times, but sometimes additional tools will be necessary to further enhance comprehension and preparation.
Myth 3: “If you’re using a CFA prep course, you don’t need the CFA Institute’s materials.”
On the other side of the argument, however, a few candidates feel that sitting through a CFA prep course renders the Chartered Financial Analyst Institute’s study materials obsolete. While prep classes include a framework of direction and simulation tests, they don’t necessarily include each and every aspect of the official study outline. The Institute’s CFA exam study materials offer the most comprehensive and latest facts and figures and play a crucial role in comprehending the depth and breadth of the exam.
Truth: You may use a CFA prep course alongside the CFA Institute study guides, but you will need to utilise the standard curriculum so that you’re covering the whole subject that may be covered on the exam.
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Myth 4: “I don’t think I’ll pass because I don’t have enough time to study.”
One of the greatest fears of candidates is that they will not be able to clear the CFA exam because of the shortage of time. Yes, the exam is rigorous, yet it’s also a feasible and doable exam with the correct planning. You might get a feeling of despair if you didn’t prepare sufficiently in advance of the required timeline, yet a good study schedule will allow you to utilize the limited time effectively.
Truth: You don’t need a lot of time on your hands; instead, prioritise CFA study tips that allow you to prioritise major subject matters and utilise the limited time effectively. Through constant effort and time management, clearing the exam becomes a real probability.
Myth 5: “If there’s one topic I can skip, it’s Ethics.”
Ethics has traditionally been considered a lower-priority area of the CFA exam, with a few candidates dismissing it as a subject they don’t need to study. However, ethics constitutes a major part of the exam and has a higher significance at each of the CFA levels. The CFA Institute also emphasises ethical behavior as a primary area of the qualification, and it is therefore vital that you study this subject in depth.
Truth: Do not omit ethics. It will be a vital aspect of passing and will be the determining factor between passing and failing the CFA exam. Ethics plays a lot of significance at each of the CFA exam levels.
Myth 6: “I’ll study for it the same way all my friends are studying for it.”
While it’s useful to exchange study advice with fellow students, every student’s study mode of operation varies. What’s suitable for a particular individual might not suit the next, and it’s crucial that you know your strengths and limitations. Some students perform better with independent study, and yet others with prep classes and collaborative study sessions.
Truth: Tailor study preparation for the CFA to suit the manner in which you study. Develop a study schedule that suits you and stick with it.
Myth 7: “According to X, Topic Y will not be on the exam.”
One of the myths involves the use of hearsay or predictions of the contents of the exam. The students state that there will be no coverage of specific subject matters based on hearsay and experience of the previous students. Even if specific subject matters get a higher or lower emphasis based on the level of the exam, the CFA exam covers the whole subject area.
Truth: Do not use speculations. The CFA Institute never releases any predictions of the contents of the examinations. Prepare yourself thoroughly in each area so that you won’t be caught short during the examinations.
Myth 8: “You will fail the exam if you fail Ethics.”
It’s commonly believed that if you don’t succeed in the CFA’s Ethics part, you won’t succeed with the whole exam. Failing the CFA’s ethics part does raise a red flag, of course, but it’s not necessarily a killer if you nail the remaining sections.
Truth: Failing the ethics won’t be a failure per se, although it will hinder the chances of passing overall. Good marks in ethics do, however, need a place of prominence in your study timetable.
Myth 9: “I know someone who only started studying 1 month before the exam and passed. Studying 300 hours is overkill.”
It’s not rare that we hear of candidates who apparently passed the CFA exam with limited preparation. Though it’s true that it might be feasible for a few candidates to study effectively within a short span of time, it’s easy to get the wrong impressions based on such anecdotal evidence.
Truth: The majority of candidates, including newcomers, will take 300 hours of CFA exam preparation time to properly study the whole material. Do not be tight with study time.
Myth 10: “The CFA Institute curriculum has the best study material.”
Although the CFA Institute study guides are comprehensive and definitive, they may not be the best study tools and certainly not the most practical methods of study, especially for busy candidates. The use of CFA study guides, prep books, and video lectures will reinforce the primary concepts and provide a review format that will be more accessible.
Truth: The CFA Institute program is of the highest significance, but third-party CFA study guides will augment the study experience and simplify the study process.
Myth 11: “Getting a CFA charter will get me a job.”
Although the CFA designation is highly respected in the world of finance, it does not necessarily guarantee employment. The CFA certification will certainly enhance your resume, but experience, skills, and fit with the company culture also enter into the company’s hiring decision.
Truth: The CFA certification is useful, yet employment placement also involves networking, experience, and skills relevant to the position.
Myth 12: “The CFA exam is only for people with a finance background.”
A few presume that the CFA exam is limited to the field of finance. However, candidates also comprise students with a background in economics, engineering, and the humanities among them.
Truth: The CFA exam has been made accessible to any individual with a good understanding of the subject of finances regardless of the individual’s qualifications.
Myth 13: “You can rely on last-minute cramming to pass the CFA exam.”
Last-minute cramming will not be a ticket to passing the CFA exam. The CFA exam will be testing a variety of complex concepts, and short-term cramming will not help in remembering the information in the long term.
Truth: Continuous and regular study and revision play an integral part in clearing the CFA exam. Prepare in advance and follow a planned study schedule.
Myth 14: “All CFA exam levels are equally difficult.”
Each of the CFA tests has a unique emphasis and difficulty. General knowledge and conceptual fundamentals are the emphases of Level I, with detailed analysis the emphasis of Level II and application and portfolio management the emphasis of Level III.
Truth: The CFA exam becomes increasingly difficult with each subsequent level. Prepare yourself with harder study effort with each progressive level.
Myth 15: “Once you pass the CFA exam, you’re guaranteed a high salary.”
While the CFA certification will definitely enhance your earning capacity, it does not necessarily promise a good income. Salary will also depend on a variety of factors, including experience, position, geographical area, and the firm.
Truth: The CFA certification does tie in with higher compensation in the field of finance, yet it does not necessarily equate with wealth. There are additional factors that influence how much you earn.
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Conclusion
There are a lot of CFA exam myths that get in the way of a clear and confident approach to CFA exam preparation. Eliminating them will prepare you better to study effectively and set the correct expectations regarding the CFA journey. The CFA exam is a difficult yet attainable ambition that you will be able to realise with the correct preparation.
