The globally recognized CFA (Chartered Financial Analyst) course is considered one of the toughest exams in the world, including in India, for students to acquire a qualification in finance. Its preparation includes developing a deep conceptual understanding of its entire syllabus, along with analytical ability and ethical judgment. Even if you prepare diligently for months, with or without the help of the best institute for CFA course in India, there are several mistakes you make on the way that make you fall short of a successful result. These mistakes include not focusing on an important topic, improper time management, not examining yourself through regular mock tests, and much more.
What is the CFA Exam?
The Chartered Financial Analyst (CFA) exam is a globally recognized qualification exam for students aspiring to be professionals in the finance sector. It is conducted in three levels designed to test your expertise in investment analysis, portfolio management, and ethical standards in finance.
This three-level structure demands a planned and strategic approach from you in your preparation, and the students are awarded an overall remark of Pass or Did Not Pass in their results.
- Level 1: Focuses on core concepts, basic financial knowledge, and familiarity with formulas.
- Level 2: Requires expertise in the application of concepts through case studies.
- Level 3: Based on portfolio management, wealth planning, and essay-type responses.
Most Common CFA Exam Mistakes
While preparing for any exam, making mistakes is very normal for everyone. However, what is even better is to work for the best pay possible to prevent those mistakes from occurring anytime throughout your studies, as even a single error is worth a lot in such competitive exams. The following are some very common mistakes students make while preparing for a CFA course in India:
1. Not Giving Enough Time to Mock Tests
You should appear for mock tests, as they are an exact simulation of what you will face during your actual exam. However, many students delay taking mock tests until the last month or even the previous week in many cases.
This can clearly not help, as mock tests are for you to understand exam pacing, real question difficulty, and conceptual gaps. Without applying for mock tests, it is nearly impossible to be well-prepared for your actual exam day. Here is why you should not ignore mock tests:
- You get to face time pressure against the same number and marks of questions as the actual exam, even the ones from PYQs, too.
- Mock results tell you how well you are prepared on a given topic and what you need to study more.
- Regularly appearing for mock trials helps you to balance speed with accuracy.
2. Improper Time Management
Preparation for the CFA requires a disciplined approach, and proper time management is a necessary part of the discipline. Wasting time during preparation or while giving the exam can harm your overall score massively. Here is how you manage time:
- Prioritize solving easier questions first, or you will be stuck on the difficult ones for a considerable duration.
- Give a specific and varying time duration to each section. Subjects like Quant or Economics require faster solving compared to FRA or Ethics.
- Solve PYQs or mock test questions with a timer to improve your speed.
- Monitor your question/minute ratio and try to make it as high as possible without rushing at any point.
3. Ignoring Ethics in Your Curriculum
The topic of ethics carries a high weightage, and the ethics adjustment can impact your pass/fail status. Hence, you should not leave it to study for the last moment and give it as much time as possible during your complete preparation.
- If your score is near the passing line, a strong score in ethics can easily make you pass, while a lower score can make you fail.
- Questions in ethics present confusing situations that would be tough and time-consuming to solve without proper practice.
- Mastering ethics can make your score go high in level 2 as well as level 3.
4. Same Preparation Plan for All Levels
Each level of the CFA tests you in different ways. To appear for various levels and crack them all, using the same study approach throughout is undoubtedly not recommended. Here’s what you need to focus on at each level:
- Level 1 covers a wide range of topics, while Level 2 demands practicing item sets.
- Level 3 focuses on portfolio management. Additionally, candidates who rely only on formula memorization often underperform in AM (essay) questions.
- Regulate your pacing and strategy by level. Level 2 requires intense practice on vignette reading, while Level 3 requires structured writing skills.
5. Memorizing Instead of Understanding
Memorizing formulas, terms, or definitions can speed up your preparation, but it will certainly not help. As questions in the CFA test one’s knowledge and understanding, in the absence of conceptual clarity, you will get nowhere.
- CFA exams focus more on application-based questions.
- When you genuinely understand duration, convexity, beta, or DCF logic, you can naturally derive the formula.
Best CFA Preparation Tips
Once you understand the complete structure and demands of the exam, along with what mistakes to avoid making, you need to show that understanding in your preparation strategies. The following are some CFA preparation tips you must follow:
1. Actively Recall the Topics
Recalling whatever topic you study is considered the best way to keep it in your mind. This technique improves memory retention and also boosts your long-term understanding. The following are some ways you can recall the topics:
- Create flashcards for recalling essential formulas, ethics rules, and key concepts.
- Practice writing formulas or concepts from memory to strengthen retention.
2. Practice with Mock Tests and Question Banks
Practicing builds exam resilience and accuracy, and practice is best when done regularly with the help of question banks and mock tests consisting of PYQs (Previous Year Questions). A practice of solving questions improves your pattern recognition and helps you understand the mindset of the examiner, as well as improves your time management.
- Analyzing your errors is an excellent way of fixing them forever.
- Regular full-length mocks train you to maintain focus for long hours.
3. Create a Proper Study Plan
A realistic and structured study schedule prevents burnout and maintains consistency. A planned approach for a challenging exam, like the CFA, is essential to distribute your effort across all topics.
- Prioritize heavyweight topics like FRA, fixed income, and ethics.
- Use the 70–20–10 Rule, which advises your time to be divided into 70% study, 20% practice, and 10% revision.
- Keep the last 1 month of your preparation solely for mocks and revision.
Conclusion
Clearing an exam like CFA is a dream that is not achieved with just hard work but also with dedication towards the right approach of preparation. The right approach to preparation also includes common mistakes that you know can be made but have to necessarily avoid.
If you are an aspirant who knows all the CFA course details after 12th and are now trying to prepare for the exam, then Fintelligents is the best place for you. We at Fintelligents, along with our faculty full of expert teachers, have been offering the best CFA course in India in online as well as offline mode for nearly a decade, and that too at an affordable fee. Enroll at Fintelligents and make your career rise high in finance with excellence and success following you.
FAQs
Q. What are common CFA Level 3 mistakes?
Some common mistakes that students make in CFA Level 3 are ignoring mock tests, improper time management, and following the same strategy continuously as preparation for levels 1 and 2.
Q. Are CFA mock exams worth it?
Yes, taking mock exams for the CFA is totally worth it if you wish to put in your efforts for the best preparation and be ready for the real-time exam experience.
Q. Do you need to memorize formulas for CFA?
Yes, it is important to memorize formulas for CFA to answer questions in quantitative methods, fixed income, and financial reporting.
Q. What percent of CFA level 1 is ethics?
Ethics in CFA Level 1 represents 15-20% of the weightage of the exam, i.e., 18 to 27 questions out of a total of 180 questions in the exam.
Q. What is the 6 month rule for the CFA exam?
The 6 month rule of the CFA exam means that you can resit for the CFA exam a maximum of two times per calendar year (when applicable), but not in consecutive windows or windows that are six months or less apart.