If you’re considering earning the CFA® charter, you likely know the exams are tough.
But just how challenging are they? Each level is unique in its challenges, requiring months of study, mastery of diverse topics, and perseverance. However, that hard work translates to a high salary for a CFA®: according to the BLS, financial analysts make an average of $100,000.
I’ll help you decide whether this path is right for you. I’ll break down the difficulty of Levels I, II, and III, what you can expect from each, and why proper preparation is key to success in answering easily when asked, “How hard is the CFA® exam?”
Key Takeaways
- Three Levels, Increasing Complexity: The CFA® exam has three levels, each progressively harder and testing different skills—from foundational knowledge to strategic thinking.
- Wide Range of Topics: Candidates must master everything from ethics and quantitative methods to portfolio management and wealth planning.
- Time Commitment is Key: Most candidates spend 300+ hours studying for each level, emphasizing consistent and disciplined preparation.
- Low Pass Rates Reflect the Challenge: With average pass rates of 41% (Level I), 45% (Level II), and 52% (Level III), preparation and persistence are critical.
- Right Preparation Makes All the Difference: Using study guides, practice exams, and time management strategies can significantly improve your chances of passing.
What Makes the CFA® Exams So Challenging?
The CFA® exams are rigorous for several reasons:
- Three Levels: Each level builds on the previous one, growing in complexity and depth.
- Wide Range of Topics: From ethics to portfolio management, you’ll tackle financial concepts spanning multiple disciplines.
- Low Pass Rates: The 10-year average pass rates are sobering: 41% for Level I, 45% for Level II, and 52% for Level III.
- Time Commitment: Most candidates need 300+ hours of study per level. That’s like adding a part-time job to your schedule.
But don’t let these stats scare you! With the right preparation and mindset, many candidates pass each CFA® level on their first attempt. Let’s break down the specifics of each exam.
Level I: The Foundation
What to Expect
Level I is often described as an overview of financial concepts, but don’t underestimate it. It consists of:
- 180 Multiple-Choice Questions: Divided into two sections of 90 questions, with a total testing time of 4 hours and 30 minutes.
- 10 Topics: These range from Ethics and Professional Standards to Financial Statement Analysis and Fixed Income.
Each question is straightforward, but the volume of material covered is immense. You’ll need a strong understanding of:
- Ethical and Professional Standards (15-20%): Expect to analyze real-world scenarios to test your ability to apply ethical principles.
- Financial Statement Analysis (11-14%): Understanding income statements, balance sheets, and cash flow is critical.
- Equity Investments and Fixed Income (11-14% each): These topics cover valuing stocks and bonds, understanding risks, and analyzing market trends.
Pass Rate and Difficulty
The Level I pass rate has averaged 41% over the last decade, meaning most candidates don’t pass on their first attempt. This is often because they underestimate the exam’s depth or don’t allocate enough study time. Focus on:
- Practice Questions: The CFA Institute provides plenty of practice exams to help you get comfortable with the exam format.
- Time Management: During the exam, you’ll have about 1.5 minutes per question. Practice pacing yourself to avoid rushing.
Level II: Application and Analysis
What to Expect
Level II is a big step up from Level I. The format changes to emphasize real-world application:
- 22 Item Sets (Vignettes): Each vignette includes a case study followed by 4 multiple-choice questions (on average). You’ll complete two sessions, each containing 11 item sets, over 4 hours and 24 minutes.
The exam focuses heavily on:
- Financial Reporting and Analysis, Equity Valuation, and Fixed Income (10-15% each): You’ll dive deeper into valuing investments and interpreting financial data.
- Ethics and Portfolio Management (10-15% each): Ethical standards remain a core focus, and portfolio management begins to take center stage.
Why It’s Harder
Level II is all about connecting the dots. You’re no longer just memorizing formulas—you’re applying them to complex scenarios. This level is especially challenging for candidates without a strong finance background.
Pass Rate and Tips
The Level II pass rate is slightly better at 45%, but it’s still tough. To succeed:
- Master Item Sets: These are a mix of reading comprehension and technical analysis. Practice answering multiple questions from a single vignette.
- Focus on Core Topics: Not all areas carry equal weight, so prioritize heavily tested topics like equity valuation and financial reporting.
Level III: The Final Stretch
What to Expect
Level III is considered the most conceptual and strategy-focused of the three exams. It includes:
- Constructed Response (Essay) Questions: In each session, you’ll answer a combination of 5 or 6 essay sets, requiring well-reasoned, concise responses to demonstrate your understanding and application of advanced concepts.
- Item Sets: Each session also includes 5 or 6 item sets featuring vignette-style case studies followed by multiple-choice questions, similar to Level II.
The topics shift towards portfolio management and wealth planning:
- Pathways (30-35%): In 2025, candidates can choose one of three specialized pathways for Level III, and this content makes up a large chunk of the exam. Options include portfolio management, private markets, or private wealth.
- Asset Allocation and Portfolio Construction (15-20% each): These sections test your ability to balance risk, return, and client goals.
Why It’s Different
The essay format makes Level III unique—and daunting. You’ll need to clearly articulate your reasoning and justify your answers. Time management is also critical, as the essay section can be overwhelming if you fall behind.
Pass Rate and Tips
The Level III pass rate averages 52%, the highest of the three levels, but don’t get too comfortable. Candidates often struggle with:
- Constructed Response: Practice writing concise, clear answers under time pressure.
- Holistic Thinking: You’ll need to apply concepts across multiple areas, reflecting the real-world challenges of investment analysis and portfolio management.
How to Prepare for Success on the CFA® Exams
No matter which level you’re tackling, preparation is key. Here’s how to set yourself up for success:
- Create a Study Plan: Allocate at least 300 hours of study time per level and spread your study sessions over several months.
- Use Quality Study Materials: The CFA Institute provides an official curriculum, but third-party prep providers offer condensed guides and practice exams that often come with better resources and money-back guarantees.
- Take Practice Exams: Simulating exam day conditions will help you build confidence and strengthen your time management skills.
- Focus on Weak Areas: Identify the topics you struggle with so you can spend your study time more efficiently. Gain those extra points!
- Stay Consistent: Studying regularly for the CFA® beats cramming every time. Aim for daily or weekly study sessions over a 12-hour weekly “study shift” to keep the material fresh.
- Focus on Question Type: Different question formats mean different strategies for responding. Master each type with realistic CFA® practice questions and tailored strategies from prep providers.
Final Thoughts
So, how hard is the CFA® exam?
The short answer: it’s one of the most challenging professional designations you can pursue. Luckily, that difficulty leads to massive rewards. Passing the CFA® exams demonstrates mastery of investment analysis, portfolio management, and ethical standards, making you a highly respected expert in the finance world. And for most charterholders, that means a hefty paycheck. Whether you’re tackling Level I’s breadth of topics, Level II’s analytical depth, or Level III’s strategic focus, staying disciplined and using the right resources will give you a better chance of success.
FAQs
Yes, the CFA® exams are challenging due to their depth, breadth of topics, and the time commitment required to prepare. However, with the right study plan and resources, passing is achievable.
The CFA® is often considered one of the toughest professional exams, primarily due to its low pass rates and the rigorous knowledge base it requires. However, “hardest” can vary depending on your background and experience.
The CFA® and CPA exams are challenging in different ways. The CFA® focuses heavily on investment analysis, portfolio management, and ethics, while the CPA emphasizes accounting and auditing. For finance professionals, the CFA® might feel tougher, while accountants may find the CPA more aligned with their expertise.
Not necessarily. While the Level III pass rate is the highest, the exam format (with constructed response questions) and the conceptual nature of the material make it difficult for many candidates. It’s more likely that the pass rate is higher because people who take it have already successfully passed Level I and II, so they have a solid foundation for Level III.
The 10-year average CFA® pass rates are 41% for Level I, 45% for Level II, and 52% for Level III. These rates highlight the importance of consistent study and using practice exams to boost your chances.
