10 Harsh Reality Checks if You Just Passed CFA Level 1

CFA Level 2 Exam Soon
CFA Level 2 Exam Soon


In my second post of my ‘Congratulations on passing Level 1 of the CFA Exam in December’ series, again: “Congrats“. This post is focused on motivating you for Level 2 and knocking you back into reality after a week of CFA Celebrations. I write this in good fun, having been there. So try not to get too depressed 😉

Recap: My first post offered a sincere congratulations to all those new, freshly minted CFA Level II Candidates in Congratulations: 7 Nerdy Ways to Celebrate Passing Level I of the CFA Exam.

This Part 2 isn’t as nice.

Reality Check: You Only Passed CFA Level 1

Only Level I

What failed CFA Level 2 Candidates think of you passing Level 1

Passing the first level of the CFA Exam is no joke. It’s nothing to be taken or to celebrate lightly. You couldn’t pay me to go back and retake it. It’s certainly a reason for several days of celebration. But when that’s all said and done:

You passed Level 1 of 3 Levels of the CFA Exam. If you’re sitting for the Level II Exam in June, and you’re fighting an uphill battle.

1. You’ll probably fail Level 2 next. You will probably fail CFA Level 2 (most do)

2. You have at least 1.5 years left of studying. That’s your best case scenario. If you’d started your MBA or done the CPA instead, you’d surely be done by that time.

3. You probably have 2.5 years left. This is the more likely scenario, sorry. You have 30+ months until you’re finished with the CFA assuming you only fail CFA Level II once.

4. You’re Late start studying for CFA Exam LII. You are already way behind all of your competition.

5. CFA Level 1 Is just College. CFA Level I didn’t test you on anything you didn’t already learn in your undergraduate degree, assuming you studied finance.

6. The Toughest CFA Competition. Your confidence and motivation after passing Level I won’t help you pass against desperate, already-failed, CFA Level II Candidates. These already-failed CFA LII Candidates already know the curriculum well from 300 hours of studying last year, and 75 hours of studying this year. You have zero hours of studying completed.

CFA Exam LII Studying Reality Check

CFA Exam Reality Check

7. CFA Level 2 Breadth of information like WOAH. CFA Level II covers an insane breadth of information, and has an absolute insane number of vocab, formulas, and concepts you need to memorize, recall, and fully understand. This isn’t Level 1.

8. CFA L2 is the Hardest CFA Level. CFA Level II is widely regarded as the hardest level to pass.

9. CFA Exams are a Zero Sum Game. And, again, you haven’t studied yet. You’re behind other candidates! It’s nearly February and you haven’t started. The CFA, like derivatives markets, are a zero sum game. CFAI won’t pass 90% of the Candidates if the average score is 95%.

10. Mean Reversion in Passing Rates. The passing rates have ticked up recently. Ticked up away from the trailing averages. So the passing rate is bound to go down next Exam, and that’s when you’re taking Level II. (this is backed by no statistical studies or evidence)

Why it’s best to pass CFA Level 1 in December

Now for a little optimism! The nice thing about a December CFA Level 1 pass and a quick turnaround to Level 2 is that nobody really expects you to pass Level 2 right away. Or if they do, they’re less likely to judge you much. Folks will give you a free pass on the fail given the quick turnaround. This is also great for personal confidence for the next time you may have to take it. You’ll already be pretty familiar with the material and you’ll be extra motivated. So passing Level 1 in December is basically the best.

Start Studying for CFA Level 2 NOW!

Now is the time to start studying. A good place to start is with registering for the exam, purchasing CFA study materials (probably Kaplan’s Schweser), and trying out the free AnalystTricks Memory Tricks for CFA Level 2.