The Journey to Becoming a CFA: Understanding the Approval Rates for All Three Levels

Learn about the approval rates for all three levels of the Chartered Financial Analyst (CFA) program and what it takes to pass these rigorous exams.

The Journey to Becoming a CFA: Understanding the Approval Rates for All Three Levels

As an expert in the field of finance and investments, I have seen firsthand the challenges that individuals face when pursuing the Chartered Financial Analyst (CFA) designation. The CFA program is known for its rigorous exams and high standards, making it a prestigious and sought-after qualification in the finance industry. However, many people wonder, what percentage of candidates actually pass all three levels of the CFA?According to data from the CFA Institute, the approval rates for levels I, II, and III were 36%, 44%, and 48%, respectively, in the previous year. While these rates have improved from previous years, they still remain below the long-term averages.

Since the program's inception in 1963, the average approval rates for levels I, II, and III have been 41%, 46%, and 56%, respectively. This means that out of the 2.1 million, 963,594, and 543,322 exams taken at these respective levels, only a little over half of candidates have successfully passed all three levels. One of the main reasons for this low approval rate is that many candidates underestimate the difficulty of the exams. All candidates attempting Level II have already passed Level I and are up for the challenge, but even fewer than half are able to pass it. Anecdotal evidence suggests that many Level I candidates begin the process without fully appreciating how difficult the exam is.

To increase their chances of success, The Princeton Review advises Level I candidates to obtain a minimum score of 70% on simulated exams and to pay special attention to ethical issues. After taking the exam, candidates receive a verification letter confirming whether they have passed or not. However, a summary of the results obtained in each subject area is not provided. This makes it difficult for candidates to identify their strengths and weaknesses and improve their performance in future exams. Despite the challenges, there are many success stories of individuals who have passed all three levels of the CFA. These include a woman who applied for Level III when she was five months pregnant, someone who failed three times before finally passing, and another who achieved the same feat in just 18 months.

These individuals serve as an inspiration to others and prove that with dedication and hard work, it is possible to pass all three levels of the CFA. So, what exactly does it take to pass the CFA exams? The judges evaluate each question on the exam to determine if a newly qualified theoretical candidate (JQC) - someone who has the minimum skills needed to pass the exam - would answer the question correctly. The approval rates for levels II and III fell to 40% and 42%, respectively, from 55% and 56% the previous year. This shows that even candidates who have already passed Level I struggle with the more advanced concepts in Levels II and III. After each exam, the CFA Institute's board of directors sets the minimum passing score (MPS) for each level. This score is based on the difficulty of the exam and ensures that only those who have demonstrated a strong understanding of the material are awarded the CFA designation.

Before the pandemic, the CFA Institute offered two Level I exams per year, one in June and one in December. However, due to the spread of COVID-19, there has been a decrease in the number of people taking the exam. Despite this decrease, the CFA program now offers more opportunities to take all three levels of its rigorous exams. This includes additional exam dates and online testing options. The program has also implemented safety measures to ensure the well-being of candidates during in-person exams. For those who have taken the exam, the wait for results can be nerve-wracking.

Test results are typically available 5 to 8 weeks after the close of the exam period, depending on the level. This gives candidates ample time to prepare for the next level if they did not pass. Below are the passing rates for each level of the CFA Program's most recent exams:

  • Level I: 36%
  • Level II: 44%
  • Level III: 48%
As an expert in this field, I can attest to the difficulty of the CFA exams and the dedication required to pass all three levels. However, with determination and proper preparation, it is possible to join the ranks of those who have successfully earned the CFA designation. So, if you are considering pursuing this qualification, remember that it is not an easy journey, but it is a rewarding one.