The Toughest CFA Exam: Level 3

Find out why the CFA Level III exam is considered to be the most challenging one in the CFA program. Learn about its unique format, key differences from other levels, and how much time you need to study for it.

The Toughest CFA Exam: Level 3

As an expert in the field of finance and a seasoned CFA (Chartered Financial Analyst) professional, I have seen many candidates struggle with the CFA Level III exam. This is the final exam in the CFA program and is considered by many to be the most challenging one. The reason for this is the constructed response section, which requires candidates to provide open-ended answers without any multiple choice options to choose from. According to most candidates, the constructed response section is not only difficult but also time-consuming.

It requires a deep understanding of the exam material and excellent time management skills. Candidates who have successfully passed the CFA Level I exam usually have a good grasp of the concepts tested in this exam. However, as an expert, I have noticed that many candidates struggle with this level due to its unique format and the recent changes in the weight of the subjects. One of my clients, who had passed both CFA Level I and Level II exams with flying colors, almost failed the Level III exam due to poor time management during the constructed response section.

While the overall passing rates for CFA Level III exams are higher compared to other levels, only about 56% of candidates manage to pass this exam. This is because after Level I, the exams stop being simple memorization questions and start focusing on applying information. To succeed in this exam, candidates need to shift their focus from just understanding the material to mastering the art of constructing responses. This requires practice and familiarizing oneself with the response style that is required in this exam.

As an expert, I always advise my clients to focus on learning how to apply the principles learned in the CFA Level III curriculum without worrying too much about their scores. While the subjects tested in the CFA Level I and Level II exams are the same, there are some key differences between them. Level I covers a wider range of subjects but at a fundamental level, while Level II covers a narrower range of subjects but with greater depth. This is why many candidates find Level II to be more challenging than Level I.

However, when it comes to Level III, things change drastically. Technically, it could be argued that this level is the most difficult CFA exam, especially for candidates who do not have a solid background or work experience in finance or a related field. The concepts tested in this exam are relatively simple, but the challenge lies in applying them correctly and within the given time frame. This is why it is crucial for candidates to have a good understanding of the material and excellent time management skills.

One of the most common questions I get asked by my clients is how much time they need to study for this exam. Unfortunately, there is no one-size-fits-all answer to this question. Each candidate's schedule and study habits are different, making it impossible to determine an exact number of hours needed to prepare for this exam. However, one thing is for sure - if you do not follow a specific schedule and stick to it, it will be challenging to take responsibility for the hours needed to pass the CFA exam.

In terms of concepts, Level III is nothing like Level II. While most of the concepts are simple, candidates need to apply them correctly and familiarize themselves with the material. Many Level II candidates make the mistake of assuming that Level III would be easier from a time management standpoint. However, this is not the case.

The constructed response section requires candidates to think critically and provide well-constructed answers, which can be time-consuming. Below, I have compiled some general information about each level of the CFA exam to help candidates decide which exam may be the most challenging for them. As an expert, I have noticed that candidates who pass this exam claim to have spent about 300 hours studying for each level. This includes 303 hours for the CFA Level I exam, 328 hours for the CFA Level II exam, and 344 hours for the CFA Level III exam.