If you’re concerned you won’t pass the CFA exams because you don’t have a background in finance, you can officially set those worries aside.
The purpose of the CFA is to gauge your ability to analyze financial and accounting information. If you didn’t study these fields in college, you have the opportunity to learn them now! The exam revolves around concrete concepts laid out in Learning Outcome Statements (LOS) for each of its three levels. That means that with a strong plan for prep, you can learn everything you need to before the big day—even if you didn’t study finance in school.
Now, candidates with a background in finance, either through work or education, will no doubt have a better understanding of those core concepts right off the bat—but that doesn’t mean they’ll sail through the CFA without dedicated prep. There are two main reasons why.
1. Many topics will be new to exam preppers from all academic backgrounds. There are many topics that are new even to candidates with finance experience, particularly on the more advanced stages of the exam (Levels II and III). Those less-widely-known topics include alternative investments, fixed-income, and ethics … all of which are not covered in most finance undergrad programs. In short, anyone planning to take the CFA will need to prep. While a finance background can give you a running start, a lack of one is more likely to affect your confidence than your preparation.
2. Confidence can lead to complacency. In case you need more convincing, our expert CFA instructors find that many candidates with finance degrees actually perform worse on the exam. Why? Well, one of the major reasons is complacency. Many candidates with finance backgrounds feel overconfident and therefore don’t take the proper time to study and prepare as seriously as they need. In contrast, there are many candidates from other academic backgrounds, such as economics and engineering, who devise a thoughtful study plan, stick to it, and pass the exam.
The key for all future charterholders is to focus on meeting set study hour goals and homing in on the LOS of the exam—regardless of experience in finance.
Since prepping for the CFA is so crucial, it’s imperative that you use your time wisely. To do that, it’s also recommended that you seek help from a top-notch prep provider. CFA instructors know exactly what you’ll face on the test, and therefore they know exactly what you need to study. By helping you identify necessary topics, an instructor can save you time and energy through the entire process. You don’t want to waste valuable time on irrelevant subjects, and a prep instructor can make your study time more efficient.
How about what comes after the CFA? Are you required to have a finance background to obtain a charter? The short answer is, again, no. The CFA Institute simply requires you to have a bachelor’s degree (or equivalent) or be in the final year of your bachelor’s degree program. You’ll also need to have four years of relevant work experience, and, of course, you must pass all three levels of the CFA exam. The requirements make no mention of having any other sort of finance background.
So, your success on the CFA is not reliant on having a background in finance. What’s far more important will be your work ethic and study discipline leading up to the test. While CFA exams may be difficult, if you spend sufficient time studying, getting proper help, and learning all the LOS, you will be very likely to pass.
Want to get your baseline score? Take our CFA Level I mock exam to find out where you stand.
