Worried about a failed CFA Level 1 exam? You’re not the only one. According to the CFA Institute’s website, barely more than 40% of CFA Level 1 candidates passed the exam in the last few years.
So, what should you do next? I get this question all the time from the students that I tutor. In this post I’ll take you through three things you can do to get yourself back on track and seriously boost the odds of a pass on the next time around.
So I Failed CFA Level 1 Exam…Now What?
First, confirm that you actually failed. Many people feel awful about the exam afterward but still pass. Don’t worry for nothing. Wait for the confirmation.
After a failed CFA Level 1 exam you can expect to get an email from the CFA Institute. They send out the email (whether you pass or fail) about 1.5 months after the exam. If you confirm that you have indeed failed CFA Level 1, then take a look at what “band” you are in. The CFA Institute will tell you how your score compares to the passing grade by placing you in a band that ranges from 1 to 10. Band 1 indicates that you weren’t really close to a passing score, whereas Band 10 means you just barely failed.
So how can you interpret your results? Generally I’ve found that if a student of mine was in Band 7 or above, there is a good chance that with a little more studying they could pass the second time around.
If you have a score that is lower than Band 7, don’t fret! All hope is not lost! It likely means that either: 1) You didn’t study enough, or; 2) You didn’t understand the material. Be real with yourself and decide which is applicable to you, there are solutions to both (more detail below).
The CFA Level 1 exam is offered twice a year so sign up as soon as you can once you know you failed the last one. You get a cheaper rate the earlier you sign up, and chances are that you haven’t forgotten that much of the material. This brings me to my next point.
I’ve Accepted My Failed CFA Level 1 Grade…What Can I Do About It?
Get back to studying. I’m sorry to break it to you, but that’s the reality. Give yourself a week or more to relax, but then get back to the books.
Before you start studying too hard, be sure to review the email that you received from the CFA Institute. Notice what sections were your worst. If they included Ethics, Financial Reporting & Analysis, and/or the Quant section, be sure to start with whatever was your lowest score among them. These three cumulatively make up over 40% of the CFA Level 1 exam. So, chances are that a failed CFA Level 1 exam includes a poor performance on one of those sections. It’s possible to pass the CFA Level 1 exam without acing those sections, but the lower your score on those, the higher your score needs to be on the others.
The earlier you start studying the better. With enough persistence I really believe anyone can do better than the CFA exam pass rate.
What Should I Do Differently to Avoid Another Failed CFA Level 1 Exam?
Refer to the old adage that the definition of insanity is doing the same thing over, and over again, expecting a different result.
If you genuinely feel like you did all you could to pass the exam, and still failed, then reconsider your approach. You probably fall into category 2 above – you didn’t understand the material. Don’t move ahead in big sections like FR&A, Quant, or Ethics, unless you really get the material. You can afford to do this in Derivatives, but the bigger sections you’ll need to learn. There aren’t shortcuts.
If you fall into category 1 above (you ran out of time in your studying) then depending on your background, reading all of the text might not be necessary. You can save a lot of time by getting Schweser’s CFA QBank and learning topics as you do questions.
Lastly, one of the surest ways to save time is where I come in. As per usual, this is another shameless plug. If you can’t study more because you just don’t have the time, consider getting a CFA tutor. Whether you decide to work with me or not, in all seriousness a CFA tutor will help shave down the amount of time you spend learning concepts. If you need an online CFA tutor, or in-person, I do both. Feel free to reach out, and don’t be discouraged about failing! After all, maybe you’re the next Warren Buffett (he doesn’t have his CFA designation 🙂 ).