The Ultimate Guide to Passing CFA Level One
Ryan O'Connell, CFA
Dec 22, 20
CFA Level One is all breadth and no depth (relative to the other levels). You can use this knowledge to your advantage as you learn to use your study time most efficiently.  *Missing Thumbnail*

The expectation for this test is that you can memorize an extremely wide array of definitions and formulas. Because the test does not go into great depth, it is widely considered to be by far the easiest CFA level. But just because it is easier than the others, do not take it for granted. It will take a large number of hours to pass (likely between 100 and 400 depending on your prior finance knowledge). In this guide, I will cover the following topics:

  • When Should You Take CFA Level One?
  • What Study Material Should You Use?
  • Which Prep Providers Should You Use for Base Study Materials?
  • How Should I Study Most Efficiently?
  • The Importance of Spaced Repetition and Practice Problems.

 
When Should You Take CFA Level One?

If you are a currently finance major in a Bachelors's or Master's program, I highly recommend taking CFA Level One directly after you graduate from your degree. When your peers are spending a few weeks backpacking through Europe (or whatever people do when they graduate), you should be hitting the books.  This is because the vast majority of the content covered in Level One overlaps with what you will have learned in your degree. By taking Level One within a month of graduation, you can massively reduce the amount of study time required to pass the test as it will mostly be a refresher of what you learned over the last few years with some new topics mixed in.

If this does not apply to you because you graduated a long time ago or you are looking to make a career switch into finance, then I’d suggest taking the test as soon as you can fit the time in your schedule to dedicate 4 to 6 months to study. You should absolutely consider your work and life situation to make sure you plan to take the test when you can put in the proper hours of preparation.


What Study Material Should You Use?

I will tell you what worked exceptionally well for me but keep in mind that everyone learns differently. The CFA Institute provides its own textbooks to you when you sign up for the exam. It is my opinion, that for Level One, in particular, reading the chapters in their entirety from these textbooks is a waste of time. Because the expectation for this level is primarily formula and definition memorization, reading these massive walls of text filled with fluff is not an optimal use of your precious study time. Instead, I recommend studying from third party prep providers that essentially summarize the original readings into about 1/3rd of the words and outline the key formulas and definitions you must memorize without wasting your cognitive energy on the filler fluff that makes a huge amount of the original CFAI textbooks.

There are a few things, the CFA Institute textbooks do extremely well, however. The End of Chapter Questions that come at the end of each reading are extremely high-quality study material that I think everyone should use. The blue boxes in the middle of the chapters (the ones that give in-depth examples) can be very beneficial to work as well. I also highly recommend working on all of the multiple-choice practice problems on the CFA Institutes' official website as they are free and give you an indication of how you are doing relative to your peers. They also have their official mock exams on the website that you should absolutely take once closer to the exam date.


Which Prep Providers Should You Use for Base Study Materials?

Please keep in mind that I have not been paid anything for my recommendations, I’m simply telling you the prep providers that helped me the most. Each level of the CFA exam has different prep providers that stand above the rest. As for Level One prep providers, there are a few I recommend highly. Which provider, depends on whether you learn better from reading or from educational videos.

Kaplan Schweser: In terms of written text, Kaplan Schweser is the most widely used prep provider for Level One in particular. And that is because, in my opinion, their textbooks can achieve what the original CFA Institute Textbooks can achieve in one-third of the words. They wonderfully allowed me to spend less time reading and more time doing practice problems and focus only on the testable material. I recommend their SchweserNotes package specifically as it will save you substantial time in your readings. This package (costing $399) is enough to pass Level One when used as a complement to the CFA Institute End-of-Questions and online questions.

MarkMeldrum.com: For people who prefer watching videos rather than reading, I highly recommend the prep material provided by Mark Meldrum, Ph.D. He typically turns 50 Page CFA Institute reading into a nicely summarized hour-long video outlining the key concepts. His packages also include very useful mock exams and question banks. At 315 CAD (which converts to $245 at the time of this writing), his packages are the cheapest of the high-quality packages I’m familiar with.



How Should I Study Most Efficiently?

After you have the prep material (whether it be Kaplan Schweser, Mark Meldrum, CFA Institute Original text, or any other reputable provider), I recommend following this process:

 

  1. Choose a Section to start with (Ethics, Equity, Fixed Income, etc.)
  2. Go through that entire section reading by reading performing the following routine for each reading:
    1. Read the base text or watch the video lecture for the reading. (Make notecards of all the key formulas, concepts, and definitions while reading/watching)
    2. Go through the Blue Boxes for the reading in the original CFA Institute textbooks
    3. Go through the End-of-Chapter Questions in the original CFA Institute textbooks (Make sure to both study the solutions to the problems you got right and wrong)
    4. Flip through the flashcards for this reading in spaced intervals that increase over time. I used a free spaced repetition flashcard app called Anki which keeps track of the intervals for you (highly recommended)
  3. Once you’ve finished a section (Ethics, Equity, Fixed Income, etc.), take the Topic Test for that reading on the CFA Institutes official website.
  4. Perform steps 2 and 3 for the next section.
  5. Aim to finish this process for all the sections one month in advance of the test if you do not have a background in finance, and two weeks ahead of the test if you do have a background in finance.
  6. Go through all of the Topic Tests on the CFA Institutes website one last time after finishing the entire curriculum.
  7. Take the two Mock Exams on the CFA Institutes official website as you would take the normal exam to practice for mental fatigue (isolated environment, 3 hours straight for the morning section, then a one- or two-hour break for lunch, then an additional 3 hours straight for the afternoon). Then review all of the solutions to the mock exams.