CFA Exam Produces 35% Pass Rate

The CFA Institute just released its December 2008 CFA (Chartered Financial Analyst) Level 1 exam results. Only 35% of those who took the test passed. eFinancialCareers has more:

A mere 35% of candidates who took the exam last December passed it, down from 39% in 2007.

Could it be that rather than succumbing to the dumbing down prevalent elsewhere in education, the CFA is actually making its exams harder? Or is it simply that more and more (low calibre) people are taking them?

We suspect it’s the latter. Between 2007 and 2008 alone, the number of people sitting Level 1 rose 25% to 36k, and candidates have increased 45% since 2003. With so many more entrants, the pass rate needs to remain low if the CFA is to retain any cachet. Expect it to fall even further in future.

Another question: Does passing the CFA make you a good investor?

  • investment

    Another question: Does passing the CFA make you a good investor
    ?

    You have to ask these question other way around; how many people who were employed by LEHMAN, ML , BS, Citi had CFAs.

    Warren Buffett pointed numerous time, once you have IQ of 125; what separate great investor from a mediocre one is not the IQ, but their temperament. ie; Intelligence is not the only criteria to be successful as an investor. Rationality definitely is.

    CFA cert teaches all those quants which Warren Buffett has always made jokes of. I would say 50% curriculum of CFA is related to basics you need to be a good investor. But rest of the 50% is the joke; who need those EMT followers anyhow. All those Investment bankers want to fill their own pockets they are the one who created this all BS. All Qunat is BS too; the worst concept invented by Wallstreet to fill their own pockets.

    Although, Benjamin Graham was the pioneer to establish this
    prestigious certification, now a days its real value has gone down not the up. That you can not track by looking at those passing criteria.

  • devin

    of course having a cfa charter doesn’t make help you achieve excessive returns or promote elite investment status. it show that you’re dedicated, interested and driven enough to put in the time to learn and mastery tons of material. whether you can put that to use is up to your unique talents, interests, capabilities, experiences, and work ethic. If you needed help answering this question than you have little to no chance of beating the market as it illustrates poor comprehension and deduction skills.

  • It is less than one month before the CFA exam this June? Who here feels they are ready? Preperation and self determination is the key. Nothing is worse than studying for 6 months, sacrificying time, money, and energy to find you you failed the exam. During this next month, you should review and understand the material to the point where you can teach it. Don’t give up and good luck to you all!

    http://www.core-models

  • Michel

    To answer your question, neither. The CFA exam is marked on a curve.

    With more and more applicants each year, but a commitment on the association’s part to continue passing a pre-determined number of people, you’re seeing a declining pass rate.

  • Savage

    “investment”, I don’t know where to start on your post. Grammar would be the easiest: your post is hardly coherent and nearly impossible to read. You forget or just don’t know about a lot of the curriculum taught in the CFA program. Ethics is a huge component, and that’s a tremendous asset in today’s climate. There is discussion about derivatives, and not just the ones that have been demonized in business news and governmental grandstanding. There are lots of investment bankers with CFA charters, but there are more without, so don’t blame the Institute and teachings for lots of problems that don’t apply. Lastly, where did you find that Ben Graham started the certification? I’ve seen/heard nothing to back that claim up. Maybe a lot of your garbled post would be more applicable to MBAs.

  • James

    ^”Lastly, where did you find that Ben Graham started the certification? I’ve seen/heard nothing to back that claim up”

    Actually Ben Graham is widely considered to be the founder of the CFAI.

    I randomly googled for an article , see last paragraph:
    http://www.gurufocus.com/news.php?id=5469

  • Anonymous

    “Lastly, where did you find that Ben Graham started the certification? I’ve seen/heard nothing to back that claim up.”

    Ever tried looking at the CFA website? Well Benjamin Graham contributed heavily to its founding. Although I won’t go as far as saying he started it, at least by himself. But certainly its a undeniable fact that he contributed greatly.

    http://www.cfainstitute.org/cfaprogram/benefits/Pages/cfa_program_history.aspx

    http://www.cfainstitute.org/about/history/Pages/index.aspx

    http://www.cfainstitute.org/Site%20Art/Flash/Timeline/timeline_file.swf
    (theres a whole section called “BEN GRAHAM REMEMBERED”, located bottom right of the last link)

    I can probably add more links on the subject, but it becomes unnecessary to over prove a point.

  • Anonymous