The exact number of people who fail CFA Level 1 varies with each exam administration, as it depends on the total candidate pool for that specific testing window. However, based on historical data, approximately 63% of candidates fail CFA Level 1.
This high failure rate highlights the rigorous nature of the CFA Program. While the absolute number of failures fluctuates, the percentage of candidates who do not pass has remained consistently high.
Understanding CFA Level 1 Failure Rates
CFA Level 1 is widely considered a foundational yet challenging examination. The pass rate directly indicates the percentage of candidates who successfully complete the exam. To determine the failure rate, one simply subtracts the pass rate from 100%.
For CFA Level 1, historical pass rates have averaged around 37%. This means that if 37% of candidates pass, then:
- Failure Rate = 100% - Pass Rate
- Failure Rate = 100% - 37% = 63%
Similarly, Level 2 pass rates have typically been around 45%, leading to a failure rate of approximately 55%.
The table below summarizes the average pass and fail rates for the initial two levels of the CFA Program:
| CFA Exam Level | Average Pass Rate | Average Fail Rate |
|---|---|---|
| Level 1 | Around 37% | Around 63% |
| Level 2 | Around 45% | Around 55% |
Why is the CFA Level 1 Failure Rate So High?
The CFA Level 1 exam is notoriously difficult, designed to test a broad range of fundamental investment tools and ethical and professional standards. Several factors contribute to the high failure rate:
- Extensive Curriculum: The Level 1 curriculum covers ten topic areas, including Ethical and Professional Standards, Quantitative Methods, Economics, Financial Statement Analysis, Corporate Issuers, Equity Investments, Fixed Income, Derivatives, Alternative Investments, and Portfolio Management. The sheer volume of material is overwhelming for many candidates.
- Depth of Knowledge Required: While Level 1 focuses on foundational concepts, it requires a deep understanding and ability to apply these concepts, not just memorization.
- Time Commitment: The CFA Institute recommends at least 300 hours of study for each level. Many candidates underestimate this commitment, leading to insufficient preparation.
- Pressure and Exam Format: The exam is typically a computer-based test (CBT) consisting of 180 multiple-choice questions split into two sessions. Time management and endurance are crucial.
- Difficulty of Ethics: Ethical and Professional Standards often prove challenging due to their nuanced nature and significant weight in the exam.
Strategies to Improve Your Chances of Passing
Given the challenging pass rates, a structured and disciplined approach is essential for success. Here are key strategies:
- Start Early and Study Consistently: Allocate sufficient time (ideally 300+ hours) and distribute your study efforts over several months rather than cramming.
- Understand, Don't Memorize: Focus on grasping the underlying concepts and their practical application.
- Practice, Practice, Practice: Work through numerous practice questions and mock exams. This helps solidify understanding, identify weak areas, and improve time management.
- Master Ethics: Due to its importance and unique nature, dedicate significant time to understanding and applying the Ethical and Professional Standards.
- Utilize Official Resources: The CFA Institute provides learning ecosystem (LES) access with practice questions, mock exams, and learning modules that align directly with the curriculum.
- Review Weak Areas: Use practice exam results to pinpoint areas where you need more work and revisit those specific readings.
Passing CFA Level 1 is a significant accomplishment and the first step towards earning the esteemed CFA Charter. While the failure rate is high, dedicated preparation significantly increases a candidate's chances of success. For more details on the CFA Program and exam registration, visit the CFA Institute website. Additional study resources and insights can be found on reputable financial education platforms such as Investopedia or Kaplan Schweser.
