It is difficult to describe exactly what it takes to pass all three levels of the CFA Exams. People ask me about the exams all the time and I tell them it is difficult, but what does that mean? There are hundreds of things which are difficult. Scrubbing a floor clean is difficult. Saving for retirement is difficult. Resisting the urge to eat an entire box of Krispy Kreme Donuts in one sitting is difficult. Words such as difficult, hard and even impossible are thrown about so often that they are practically worthless. Grueling? Arduous? These words are better, but they still miss the mark.

I remember examining the PDF document with all of the historical pass rates from the CFA Institute when I first started learning about the CFA Charter, but rows and columns of percentages do not really portray the difficultly of the exams either. The CFA Level 1 Exam has an all-time historic pass rate of 39%. Perhaps if I could show you what that looks like it would help. Sometimes it is better to see something with your eyes, to drive home the point and make the abstract more tangible.

So, I made an infographic to help visualize just how difficult the CFA Exams are. Click on the image to enlarge.




So there you go, a roughly 10% chance of making it through all three exams the first time through. As you can see, the CFA Exams are really a war of attrition.

There is one shortfall to my infographic though. It is possible that it is not completely accurate. It does not account for individuals who are retesting at the 2nd and 3rd levels of the CFA Exams (retesting at the first level does not impact the infographic). Individuals who fail an exam at any level can, and often do retake the exam again. To my knowledge ,the CFA Institute does not publish information about how many individuals who passed each level are taking the exam for the first time, or if they are retesting. They only publish overall pass rates for each exam.

What does this mean? It could mean one of three things:

  1. Individuals who are retesting make up a higher percentage of those who are passing. This means it is even more difficult to pass the exam(s) the first time through.
  2. The converse of the above. Individuals who are retesting make up a smaller percentage of those who are passing. This means it is even easier to pass the exam(s) the first time through.
  3. Absolutely nothing, the infographic is correct. Perhaps the first hypothesis applies to level 2 and the second hypothesis applies to level 3, and they balance out somehow. Perhaps the pass rates apply equally on average to first time exam takers and those who are retesting, in which case the infographic is indeed accurate.

When in doubt, apply Occam’s razor and accept the hypothesis with the least number of assumptions. Because we lack the information to prove the first two hypothesizes, the third hypothesis should be selected as it makes zero assumptions and just accepts the information we do have. My infographic is now accurate until proven otherwise.

There is another dimension to how difficult grueling the CFA Exams are that is completely overlooked by my infographic. That other dimension is how much time is spent studying for the exams. The infographic above only illustrates the exams themselves, and there is so much more to pursuing the CFA Charter than just showing up and taking a six hour exam. If people did that the pass rates would take a nose dive. I could attempt to explain how much time is spent studying, but it is difficult to convey with words exactly how many weekends are completely destroyed by studying for the CFA Exams.

How many weekends are destroyed? A lot. Many. All of them. An enormous amount. None of these phrases do the trick. I need to make another infographic, but not today. I need to go study so I can win this war of attrition.