CFA Level 1 Study Plan – The addiction

According to the good people at Merriam-Webster, many of you have an addiction. You have, “a compulsive need for and use of a habit-forming substance.”

The addiction…social media and web browsing.

While it may not be as devastating as an addiction to narcotics or lead to financial ruin like an addiction to gambling, the compulsion to surf the internet can also have huge consequences for your preparation of the CFA exams.

Candidates love to talk about the exams. They talk about which level is most difficult and why. They ponder the minimum passing score and trends in the pass rate. I have even seen forum posts on the best beverage to drink while studying.

The real problem is that these activities are done with the guise of productivity. Yes, you need to understand the topic weights on the exams. Yes, there are some great tips and tricks out there on how to approach the CFA exams. The problem is that candidates too easily use the web as a subtle form of procrastination and an excuse to get out of actual studying. How many hours have you spent ‘researching’ how the tests are conducted, how to approach each topic area, the earliest one should start studying, or a myriad of other questions about the exams?

Don’t be too hard on yourself. You are not alone. The average U.S. internet user spends 32 hours per month online and total time connected from sea to shining sea was measured at 121 billion minutes in July 2012. That’s 230,060 years spent online by internet users in one month alone. Americans spend approximately 19% of this time on email and 22% of it across the social networks.

I have to be careful here. Your internet addiction is what brought you to the blog and I want you to come back regularly to listen to my ramblings. But I also want you to pass the exams and I have seen too many candidates sabotage themselves by spending too much time on the forums and not enough time actually studying.

CFA Exam Everything in Moderation


As with most habits, the first step is understanding the behavior and approaching it with moderation. There is some great advice out there and it can make your life incredibly easier come the first Saturday of June. You need to know the general process involved and the idiosyncracies within each exam, but you also need to know when to get off the forums and get to work studying.

Give yourself an hour or two every week to answer questions about the exams. You might take a little more during the first couple of weeks to familiarize yourself with a new level and you might take less time toward the end after you’ve learned what you need. The important point is to understand how much time you are spending and to make sure it does not come at the expense of studying.

  • If you have a specific question about the exams, especially while studying the curriculum, do not stop studying. Write the question down and address it later, after studying.
  • When looking for the answer to a specific question, try searching for the question using the forum’s search bar rather than making a new post. This will help answer the question quickly and will not bring you back to the post every time someone leaves a reply.
  • Find a couple of good sites (I hope this blog will be one) that you visit once or twice a week to see if there are any updates. Finding a new site can be helpful but don’t spend too much time surfing the web for new places to visit.

Would love to hear your own checklist to kick the habit.

‘til next week, happy studyin’
Joseph Hogue, CFA

Last updated: August 26, 2016 at 8:28 am

CFA Ethics – Madoffs and the Scrushys of the world

One of the most common questions on the Candidates forum is where to find used study resources like condensed notes and tip sheets. Notice the difference here between asking which resources to use and outright asking for those resources. Replies to the posts usually start out pretty modestly until someone offers up their old material that can be emailed. I saw a post last month that had 12 candidates offering up their email address within a day in the hopes of scoring some free study guides.

CFA code of ethics – Sale and use of 3rd party resources

The sale and use of 3rd party resources without expressed permission is a violation of the CFA Code and Standards. Most candidates understand this but figure the practice of sharing resources falls within that proverbial gray area that everyone does and in which no one ever gets in trouble. While test prep providers have not cracked down on these kind of violations, it is well within their right to report it to the Institute.

My 11th grade psychology teacher started the first class of the semester with something I will never forget. It really had little to do with psychology and I can’t say I remember anything else from the class but this one thing. She said, “It doesn’t matter how careful you are, if it is wrong, you will eventually get caught.”

I have thought about what she said many times over the last 18 years, just about every time I was doing something I knew I shouldn’t be doing. I realized a while ago that she wasn’t talking about singular events or activities, but about your general conduct. Sure, you may get away with getting those study guides free off the net but the Madoffs and the Scrushys of the world always get caught. Stepping over that line once makes it easier to do it again, and again.

But should getting caught really be your deterrent to the double dealing, shenanigans and questionable morals that seem to pervade the industry at times?

CFA Level 1 Ethics – Do the right thing

As cliché as it may be, having the fortitude to follow an ethical path has its own rewards. By pursuing the CFA designation, you have already committed yourself to the hard work it takes to be one of the true professionals of our field. You understand that there are no easy outs in an intensely competitive industry and that the true spoils of life are all the sweeter having been earned rather than gifted.

It’s tough out there. Your boss is pushing you generate alpha. Your family needs something on the table. There are bills to pay and you have three tests to take. Work hard, do the right thing and know that you earned every letter after your name.

“I took the one less traveled by, and that has made all the difference.” Robert Frost

‘Til next time, happy studyin’
Joseph Hogue, CFA

Last updated: August 24, 2016 at 4:44 am

CFA Level 1 Jobs – How to get the perfect job

It’s a jungle out there! I get emails every week from candidates that continue frustrated in their job search, even after passing one or more levels of the CFA exam. We’ve talked about the value of the curriculum and the need for networking in previous posts. I’ve recommended getting active in your local CFA society as well.

But there’s one tool that we haven’t talked about, one that I always avoided in my own search. I would go so far as to say that I even had a disgust for it when I was just out of school.

CFA Jobs – The Unpaid Internship!

I hated even seeing notices for these when I was looking for a job. Are my skills really that worthless that a company would pay me nothing for my time or is the company just too cheap? Either way, do I really want to work for that type of company?

Maybe I’ve mellowed in my old age or maybe the difficult job environment for some has changed my concept of the value of time, but I am actually coming around to recommending these opportunities…for the right opportunity!

Let’s face it, if you’ve been without a paying job for the last few months and have no real leads, what could it hurt to spend a few months in an unpaid position? The trick is, make it on your terms and don’t be afraid to negotiate.

Start with what you want to do and where you want to do it. Is there a firm in your city that dominates the industry? Is there someone that you admire? What are your skills and what can you offer to that person, role or company?

CFA Jobs – The Game Plan

In most cases, the company will not formally have an internship program for exactly what you want. Believe it or not, that works to your advantage. There won’t be other candidates applying for the opportunity!

Use the CFA member directory, your local CFA society or your existing contacts to find out who works in the company or the specific department. Send an email first but then follow it up with a call no more than a day later. Explain that you are trying to decide in which part of the industry you want to pursue a career and would like to invite them to lunch to talk about what they do. This is not the time to ask if there are any jobs available! It’s just an informational interview, no pressure. If they don’t have time for lunch, a phone interview would also work.

Research everything you can about the company, the person and their role before your lunch. At the meeting, relax and don’t worry about getting that perfect opportunity. Use the time to learn about the industry/role and decide whether it is truly something you would want to pursue.

Towards the end of the conversation, mention that you have been interested in the company for a while but that no job opportunities or internships have come up. Ask if the person would be willing to work with you on an informal internship program. Explain that it would be more of a mentoring role, a way for you to develop some real experience and a way for them to benefit from the enthusiastic help.

The biggest thing to remember is that every, “No,” or hesitation is not the end of the conversation but a topic to negotiate.

  • They don’t think there would be enough for you to do 40 hours a week. OK, what about a 20 hour schedule.
  • They wouldn’t feel comfortable not paying you for your time but do not have it in the budget. OK, what about a stipend for travel costs?
  • They just don’t have time to put something like that together. OK, how about a floating role where you worked with multiple people within the department.

Don’t get frustrated if you have to talk to a lot of people and face a lot of rejection. Not everyone will be open to the idea of an informal program. Just remember, just because you haven’t landed that six-figure salary yet doesn’t mean your skills and knowledge don’t have value. You just have to establish that value and sell it to your network.

The worst that could happen is that you add to your list of contacts in the area but do not find anything, which is still better that where you were. On the flip side, there is a good chance that someone you talk to likes your enthusiasm and ability to think outside the box. They may decline your internship offer to put your name through to someone that is hiring for an actual job.

“No” may be a closed door but you can open it back up with the right key.
‘til next time, good luck.
Joseph Hogue, CFA

Last updated: August 23, 2016 at 5:53 am

Unwinding after a tough CFA exam

I always love hearing the familiar segue line from the old episodes of the Monty Python series. In case you’re not familiar, often between skits of slapstick absurdity during the tv show would appear a straight-faced, button-down gentleman to proclaim, “and now for something completely different.” Of course, the promise was always followed by more slapstick absurdity, but that’s what we loved about it.

The segue became so popular that it developed into a film spinoff for the comedy troupe in 1971 meant to introduce the show to American audiences. While the film itself did not do terribly well, it developed a cult following and expanded the group’s audience leading to four additional feature-length films.

Your “something completely different”


For those of you just unwinding after a tough CFA exam a ‘something completely different’ may be just what you need.

Regular readers will know that I’m a huge advocate for active involvement in your local CFA society. I had the opportunity to volunteer and serve on the board for the local society here in Des Moines and would highly recommend it to all candidates. I made the case earlier this year for contacting your local society for volunteer opportunities.

For those wanting to keep sharp between 6-month study marathons, I recommend looking around the CFA Institute’s website and the seemingly infinite pages of research and advice available in the Learning & Events section. Resources cover every asset class as well as networking, management and the most current insight on every topic area of the curriculum. Information ranges from brief 15-minute webcasts to full publications and online courses.

O.k., so the above two suggestions are not really, “completely different,” from studying for the CFA exams. Try to break out of your comfort zone and get involved in something outside the financial industry as well.

  • Establishing a routine at either of the extremes of physical activity may pay off big time when studying for the next exam heats up. Those boot camp-type fitness programs are great for clearing your head and flushing your system of the day’s stress. At the other extreme, a yoga or Tai Chi program can help you relax and put things in perspective.
  • Read a book outside of financial topics. I like history but have to throw in a fiction novel every once in a while to avoid the compulsion to be ‘learning’ something.
  • Studying for the CFA exams is, for the most part, a solitary activity and can isolate you for long periods. Join a team event or group (billiards anyone?) to reconnect with friends or to make new ones.

Just as Python’s ‘something completely different’ opened them up to new audiences and made some great movies possible, what you do between exams could dramatically change your course. Have fun with it and take a little time to relax.

Time to study for the next CFA exam will be here soon enough.
Until next time, happy (not) studyin’
Joseph Hogue, CFA

Last updated: August 21, 2016 at 6:01 am

CFA Curriculum – I Can’t Believe I Read the Entire Thing

I wrote yesterday about the importance of reading the entire CFA curriculum and that too many candidates miss out of valuable points due to only relying on study guides. If my inbox is any indication, many candidates are still skeptical that they can get through the curriculum in their limited time available and much less with their sanity intact.

Aziz from Turkey writes, “I understand the importance of the curriculum and know deep down that I should read it but just cannot find the time. What if I read a study guide two or three times in the same time it takes for the curriculum? Is that not better?”

Vikas in India points to another problem many candidates have when he writes, “The curriculum is SO BORING! Some of the information is interesting but too much academic writing makes it impossible to get past.”

I completely understand both of these points. I worked a full-time job throughout my CFA studies and was married while studying for the final test. Throw in a social life and who has the time to get through thousands of pages of material?

If you want to pass the CFA exams, then you have to make time. It can be difficult to sacrifice a little more time for studying but we are all investors here and I guarantee you the return you realize for that extra time will be well worth it. As I wrote in yesterday’s post, you must commit to the official curriculum if you want the max points possible. Studying only the study guides is a sure way to miss important information that is left out. Studying these guides three or four times isn’t going to help if the material is not in there.

CFA curriculum – Information you do not see in study guides

I did get some positive feedback from a few candidates on yesterday’s post. Mark from St. Louis writes, “I tried for two years to pass the Level I CFA Exam with only study guides. I tried two different providers but failed the exam each year. On the third attempt, I committed to reading the entire curriculum and finally made it through. Can’t say that it was only because of the curriculum but I can say that there was information in the books that I don’t remember seeing in the study guides.”

CFA curriculum – Making it through without falling asleep

Making it through the curriculum is one thing, making it through the curriculum without falling asleep every couple of hours is another thing. I agree that the curriculum can be a little boring at times. Think of it as exercise for all those company reports you will need to read as an analyst. If you thought 2,500 pages of the CFA curriculum is tough to get through in six months then you have a rude awakening coming as an analyst.

Reading through the curriculum translates to about 400 pages a month. As an analyst, I read through that just about every week! You will constantly be looking through annual and quarterly reports, trade journals and other analyst’s commentary in your daily work routine. Not all of it is going to be compelling material and you just have to learn to push through it. Taking quick notes in the margin of the page helps to stay focused and there’s nothing wrong with a little help from Mr. Coffee.

No one said it would be easy working through the entire CFA curriculum but it is definitely worth your time. It takes determination and sacrifice but those traits will serve you well that first Saturday of June and for the rest of your life. Good luck.

‘til next time, happy studyin’
Joseph Hogue, CFA

Last updated: August 11, 2016 at 6:16 am

the market - Copyrights FinQuiz.com

the market – Copyrights FinQuiz.com

CFA Curriculum Warning: Do Not Neglect

The actual length of the CFA curriculum varies a little each year but it’s generally between 2,500 and 3,200 pages. When you get the books in the mail, or receive the digital version, that may seem like a monstrous task. Over the three years of studying for the exams, I think my upper body strength grew just as much as my financial knowledge just from carrying the books around.

Study guides meant to substitute for the curriculum vary but generally range between 1,400 and 1,700 pages. At under two-thirds the length of the official curriculum, it seems like a no-brainer and I know many candidates who have only rarely even peaked inside their curriculum books.

And many of them are still candidates.

Do Not Neglect the Official CFA Curriculum!

Candidates that have tried to substitute the CFA curriculum with study guides have come to me afterwards with their horror stories. My reply is always the same, “I wish we had talked before because if you do the math then the answer is pretty obvious.” The minimum passing score for the exams is never released but I would guess it is around sixty-five percent. No candidate has failed with a score of 70% or better and I doubt if the Institute would want to charter someone that knows less than two-thirds of the subject matter.

Even the most gifted candidates are going to miss points. If about half the candidates fail the exam every year, I am guessing that most miss at least a tenth of the points and probably much more. We have no way of knowing but it’s obvious that you need every point you can get.

Now, I have seen pretty much all the study guides commercially available. There are some that do a pretty good job of condensing the material but none are able to get everything in a packet that is half the length of the curriculum. It’s impossible and information is going to get left out. Try to fit nearly 3,000 pages of information in less than 2,000 pages of notes and I would say you’re lucky if 20% of the information isn’t lost.

So if you neglect the official curriculum completely, you are already out something like 20% or more of the points. Now you need to remember at least 80% of the material just for a score of 64% on the exam.

Most of you have taken practice exams through test banks or the CFA Institute. How many have scored better than 80% on these? I know reading all those books is a daunting task but you just cannot afford to leave points on the table by neglecting the official curriculum.

CFA Study Guides

I don’t talk about the FinQuiz study notes much here on the blog other than to reference specific sections of the notes and the curriculum. I don’t want candidates to think I am being biased by pushing one particular study provider over another. But I can say, without any bias, that the FinQuiz notes have at least one big advantage over other study products, that they are meant to be used as a complement to the curriculum instead of a substitute.

The FinQuiz notes vary by length as well but are generally around 600 pages. It’s really the best of both worlds, you get 100% of the information from the curriculum and additional condensed explanations where you need them.

Free examples of the FinQuiz notes are available for download on the website. Take a look and compare them with the curriculum. FinQuiz regularly offers discounts on products and packages so you may want to contact the provider to get the best deal possible.

‘til next time, happy studyin’
Joseph Hogue, CFA

Last updated: August 10, 2016 at 4:30 am

CFA Retabulation ?

The results of the June CFA exams were released last week, marking the end to a long and difficult exam season. Less than half the level one candidates (43%) passed the exam with level two candidates doing a little better with 46% passing their CFA exam. These are both above the ten-year averages at 39% for the first CFA exam and 44% for the second exam.

Results for the level 3 CFA exam are due out on August 9th with an average pass rate of 53% over the last ten years.

CFA retabulation worth it?

Around this time, I get a lot of emails asking if candidates should request a retabulation of their CFA exam score. The CFA Institute offers the service, for a fee, but is it really worth it?

Understanding CFA Exam Results

CFA exam scores are given on a pass-no pass basis with a 10-level scoring system for those that did not pass. While the minimum passing score is never released, we know that no candidate has ever failed a CFA exam with a percentage score of 70% or higher.

The scoring band system of 10-levels for candidates that did not pass is an equal-band measure, meaning that each band is the same number of points. The number of points separating you from the next higher band are not known either but you can put together a rough estimate by thinking through it. If we assume anyone with a 70% passed and that even the candidate guessing on every question should have gotten a 20%, then we have about 50% within the ten bands or about 5% in each band.

There are a total of 360 points available on each CFA exam with individual questions worth three points each, not counting the essay portion of the level 3 CFA exam. That means, if there is a 5% difference from one band to the next, that you need to have answered as many as six more questions correctly (6*3 = 18 points) to make it to the next band.

This is a very rough estimate and we can’t know the actual numbers. I would say it is probably a maximum for the percent in each fail band. Even if each band is only 3% then you still have 10.8 points or at least three questions within each band.

What does this mean? For retabulation to change the score on your CFA exam to the next band, your original score will likely need to be wrong by at least three questions.

Should you Request a CFA Retabulation?

A CFA retabulation request for your exam score is due by the 9th of September along with your payment of the $100 fee. The CFA exam retabulation form is available here and must either be mailed or faxed to the address on the form. It takes between one and three weeks to receive your retabulation results by email.

CFA Retabulation will not change an incorrect answer to a correct one and will not get you extra points on missed questions. The process is done by hand but only checks to make sure the machine scored your answers correctly, noting which circles were marked.

For example – If you marked B, the correct answer, but the machine read your answer incorrectly as marking C then a CFA retabulation would result in a higher score. Retabulation of your CFA exam does not change the answer you marked, nor will it make a judgement call and give you partial credit for an incorrect answer.

Retabulation of the level 3 essay questions will not change the score given for a segment, only that your scores were added up correctly.

If the retabulation changes your score, you are refunded the $100 fee. If your score remains the same, your fee is not refunded.

There is no data released on scores changed by retabulation but I have never heard of anyone that got a higher score, much less anyone that changed a no-pass to a pass. If you are in the final fail band 10, you might consider it but it is still unlikely to make a difference. The accuracy rate on optical mark recognition (bubble-sheet scanners) is above 99% which means only 1% of tests have any error, much less an error on multiple questions.

It is extremely painful to feel like you wasted the last six months of your time but a retabulation isn’t likely worth the fee. Thinking about the tests in a larger context will make it a little easier. Really, how much difference does it make whether you pass this year or next when considering a 30- or 40-year career. Your additional studying only means that you will have a stronger grasp on critical material and the opportunity to be a better professional.

Take your CFA exam fail as what it is, a learning experience. Commit to hitting the material early next year and mastering the curriculum.

‘til next time, happy studyin’
Joseph Hogue, CFA

Last updated: August 6, 2016 at 5:48 am

When to start studying for CFA ?

Looking through forum posts and talking to a few candidates about timing and planning for the CFA exams provides some interesting stats and might help you assess how well your own preparation is going. The two core issues here are: when to start studying and exactly how much is enough studying.

When to Start studying for CFA Exam ?

It might be a little simplistic, but I see candidates starting their study plans in one of three categories: really early, about right, and what are you thinking! The actual dates started appear to follow a fairly normal distribution with the median around mid-February. I usually started with the ‘really early’ crowd between October and November, so I’m a little biased toward earlier rather than later.

While pre-January may be earlier than necessary, we see a lot of people waiting until March to begin studying. Biased I may be but 13 weeks to cram approximately 300 hours of studying seems a stretch. There will always be the intellectual giants out there (or at least those that think they are) that will have no problem learning all the material in three months. Then again, while actual pass-fail statistics are not available, I would put good money on the bet that the 50% of candidates in the fail band come disproportionately from these late starters.

Is it too late to begin studying for CFA Exam ?

Then there are always the (comical) posts in late April and through May asking for opinions whether it is too late to begin studying and still pass the exam. Most of the candidates I have met and talked to were fairly smart, but sometimes I’ve got to wonder.

Like I said, I am probably a little overcautious and biased to starting early. Most candidates have fairly relaxed schedules and can sacrifice a few extra hours for something that is undoubtedly going to change your career prospects and arguably your life (going out with that hot co-ed you met last week or keeping up with this season’s American Idol are not as important as you think). Nothing I could say would get most of you to start before January, but hopefully you will not wait until March.

How Much is Enough for CFA Exam ?

More important than when you start studying is (duh!) how much studying you do. Reading through forums and taking a few polls, I was surprised that the consensus is for reading through the material only once and then working through practice problems and a mock exam. At most, I found that candidates expect to read through study guides once then review a quarter to half of the material again. Most candidates planned on working through all the end-of-chapter questions and doing ‘some’ practice problems from a provider question bank.

Again, I might be a little conservative, but this seems entirely inadequate. Who are all these candidates with eidetic (photographic) memory that can pick everything up that easily? Practice exams taken through question banks will give you a good indication if you have picked up the material but most do not start taking these until late in the season. What happens when you take your first inclusive practice exam in May and find out you are not nearly as prepared as you thought?

The candidates that expressed a higher level of confidence with their preparation were mostly those that had read through all of the material at least twice and had started monitoring their progress through practice exams at least two months before the test date. This leaves time to focus on a few of the weaker topic areas as well as going through the material with a few other media (video, summary sheets, flash cards).

I guess it comes down to being realistic about your abilities and taking a rational look at the statistics. Surveys by CFA Institute show that candidates (both passing and otherwise) averaged around 300 hours of study time for each exam. We also know that approximately 50% of candidates fail the exam each year. This is one area where being ‘average’ is likely to not be enough.

I imagine that the absolute number of hours reported belies a fairly large distribution, but we’ll call it 200 hours minimum and maybe 400 maximum needed to pass the exams. Now think about your pre-CFA studying schedule. How many hours per week do you think you can realistically commit to studying? You need to plan conservatively if you are married, have children, or have a job with increasing workload around quarterly reporting. Life happens, don’t expect to be able to study as much as you would like every week.

‘til next time, happy studyin’
Joseph Hogue, CFA

Last updated: August 4, 2016 at 4:21 am

 

Five Reasons CFA Candidates Fail the CFA Exams (Part 4)

We’ve already been through three of our five reasons that keep candidates from passing the CFA exams. The first reason was too much time spent studying about studying, posted here. The second reason, planning a schedule around life and burnout, is a big one for those of us with a family and a full-time job. Yesterday’s post, the difference between active and passive studying, is probably the biggest hurdle to success for most candidates.

Should I use a third-party prep provide for CFA Exam

Today’s post again deals with the planning process, not finding the right time to study but finding the right resources. The big question on the forums is always, “Should I use a third-party prep provider or just stick with the curriculum?” The question goes deeper though to different products and ways to look at the material as well. Disclaimer: Obviously, we here at FinQuiz have a vested interest in the answer. Our study guides have been developed as a great complement to the curriculum and we’re proud of the feedback we receive every year. That said, this blog is here for all candidates and we want to see you pass the exams regardless. Check out our examples on the homepage or contact us and we can talk about helping you get the most for your time.

Variety is the Spice of Life

Beyond the specific test prep provider, candidates also need to look at a variety of different products. The CFA curriculum at each level is in excess of thousands of pages. I was always a fan of looking at it from as many different angles as possible. This helped to break-up the monotony and took advantage of the strengths within different media.

CFA Study Guides – two formats

Study guides come in two formats, those based on the specific Learning Outcome Statements and those that are curriculum-based. Some providers reason that structuring the guides on the specific LOS makes it easier to package the material in shorter pieces. FinQuiz has taken a different approach, developing curriculum-based guides as a complement to the curriculum instead of as a substitute. By following the curriculum, the guides are more condensed and focus on those areas that give candidates the most problems.

Some candidates completely ignore the curriculum, opting instead to only read study guides. Granted, this cuts down on the time spent to get through the material but you are sure to miss some points. As condensed notes, the study guides are not going to include 100% of the testable material in the curriculum. If the guide only hits 90% of the material and the candidate only retains 80% of the guide, then their score is already maxed out at 72%. This is why FinQuiz feels that a complement to the curriculum is more appropriate than a substitute.

Flash Cards for the CFA Exam

Flash Cards are the most appropriate for focusing in on those last remaining areas in which you are having trouble or keeping those important formulas and processes fresh in your mind. I also like flash cards for their portability and ease of use during short periods. We get (2) fifteen minute breaks during the day, not really enough to open up the books and start a new section but plenty of time to go through 10 cards.

You can easily buy or borrow cards off the internet. Most providers sell sets for around $125-$175 or someone in your social network probably has some you could copy. The best way, though, is to make your own cards. It may take a little longer, but they will be customized for your learning and will provide the opportunity to write out the material.

CFA Exam Videos

Videos are a good way to look at the material from a different format. The majority of your studying is going to be through reading a section and answering problems so it is nice to take a break every once in a while and have someone explain the curriculum to you. This is especially useful for some of the more complicated sections where a live example might help. While FinQuiz does not yet offer videos, there are many available on YouTube and can be found through a simple search.

CFA Exam Test banks

 

Test banks include thousands of problems to work through and are a great complement to those in the official curriculum. Working practice problems are really where you need to be focusing your time because the retention is so much better using this active learning method than simply reading the material. Candidates need to work through all the end-of-chapter questions and ‘blue-box’ examples within the curriculum. This is going to be the closest to the style and difficulty that you’ll see in the exams. The few hundred problems included in the curriculum really isn’t enough to prepare for the exams, making test banks absolutely necessary.

When working through a set of questions, don’t just score your results at the end of a study session. Go back through the questions. Figure out why you missed those incorrect answers and make sure the correct answers were from an understanding of the material and not simply a lucky guess.

Practice Exams for CFA

Mock Exams need to be a part of your study program so you are not surprised by the six-hour testing marathon in June. Many candidates handle their studying exclusively in short, one-hour chunks then do poorly on the exam because they are not prepared for the level of mental fatigue. Further, mock exams force you to answer problems across the curriculum instead of only looking at specific sections. Facing a test of the entire curriculum is much different than looking at each section immediately after reading over the topic area, make sure you are prepared.

Too many candidates rely solely on the official CFA curriculum without taking advantage of other available media and resources. Besides offering different approaches and advantages specific to each media, using different resources are about the best way possible of avoiding burnout while studying for the CFA exams. Look through the free examples that many third-party providers offer or ask other candidates which provider they used. The incremental costs to using a few products are well worth the expense to avoid having to retake the exam.

‘til next time, happy studyin’
Joseph Hogue, CFA

Last updated: August 1, 2016 at 5:13 am

Five Reasons CFA Candidates Fail the CFA Exams (Part 3)

We’ve covered two of the top five reasons candidates fail in the previous weeks’ posts. I was going to finish the series up with this one but could not wait. I figured there are candidates studying for the December exam now and they need to read this before it’s too late to get back on track.

Frequent readers of the blog will recognize this common hurdle that candidates face. It is a problem all students face. Worst of all, it is not something you can overcome once and not worry about it again. You have to continuously watch for it to keep yourself on course.

The number one reason candidates do not pass the CFA exams is the difference between active and passive learning.

Passive learning is those activities where you do not participate but really just absorb the material through sensory perception. This includes reading, listening to a lecture or watching a video. Studies have shown that students remember only about 10% to 30% of the material through passive study.

Active learning, by contrast, is those activities where you engage the material in an interactive manner. This includes discussion, presentation and problem solving. Students are able to remember up to 90% of the material when they use active studying as part of their routine.

Just Reading the CFA Curriculum isn’t Going to Make It


Now that you know the difference, you are probably saying, “Oh crap, I am doing nothing but passive learning!” Don’t be too hard on yourself. Most school systems are built around passive learning (listening to lectures and reading textbooks) and students only grudgingly engage in active learning.

For me, it was only with the realization that the CFA exams were nowhere near as easy as most of my college curriculum and that passive learning was not going to cut it that I made the commitment to active learning. Its not the easier route, but would you rather spend a hundred hours reading to remember 10 hours of material (people typically remember about 10% of what they read) or would you rather work practice problems for about 11 hours to remember the same 10 hours worth of material?

Practice, Practice and yet more Practice for CFA Exam

1) Practice problems are the most obvious form of active learning. Make sure you do all the end-of-chapter questions and ‘blue-box’ examples in the CFA curriculum. These are going to be the most closely related to actual exam questions and are pretty close to the same level of difficulty.

The FinQuiz test bank includes almost 5,000 questions created directly from the curriculum and more than 500 item sets. It is a great supplement to the textbook questions and will help avoid boredom from doing the same questions multiple times.

Study groups for CFA Exam

2) Study groups are a good way to discuss and think about the material, but make sure you are efficiently spending your time on the curriculum and not talking about unrelated things that happened over the week. Flash cards are a good resource to use for study groups. You learn first by developing your own set of cards, then learn by working through other group member’s cards as well.

Level III candidates absolutely MUST work old essay questions.

3)  The Institute releases the last three years’ essay questions with guideline answers. We worked through about 12 of these before the exam this year and are available on the blog. Do not let the essay section surprise you. It can be extremely easy or extremely difficult.

I first wrote about active versus passive learning in a post earlier but thought I would include it in this ‘top 5’ list because it trips up so many candidates. Click here for more information on active learning and how it can help you remember 90% of what you study.

‘Til next time, happy studyin’
Joseph Hogue, CFA

Last updated: July 28, 2016 at 4:02 am

And you thought practicing FinQuiz Mocks was tough! - Copyrights FinQuiz.com

And you thought practicing FinQuiz Mocks was tough! – Copyrights FinQuiz.com

Five Reasons CFA Candidates Fail the CFA Exams (Part 2)

I used to know a First Sergeant in the Marine Corps, one of the hardest and most admired men I have ever known. First Sergeant had a saying for when someone failed or things didn’t quite work out, as if all failure came down to one motto, and it brings us to the second of five reasons why candidates fail the CFA exams.

“Prior proper planning prevents p*ss poor performance!” For those that do not know, ‘p*ss’ is an expletive used here as an adjective for how severely you just messed up.

Lack of planning may seem like an oversimplification as to why candidates fail the exams, but much of the time it is just that simple.

CFA Exam – 300 hours studying

Candidates know that it takes an average of 300 hours studying to learn the curriculum and pass any given level. That’s not just some number I pulled out of the air. Every year, the CFA Institute surveys candidates and every year those passing the exam report that they spent about 300 hours studying. For the most part, candidates understand the time required and most plan to put in the necessary time to pass.

They figure 300 hours divided by 3-4 months is about 20 hours per week studying and they plan on starting in late February for the June exam.

But that is about as far as their planning goes.

Life and CFA Exam

Then something happens I like to call, “LIFE.” Life is your little sister getting married and you have to fly to Albuquerque for the wedding. Life is first quarter reporting and you putting in 80 hours a week at the office to get client presentations done. Life is your son’s Little League Championship series that takes you to every baseball diamond in the state and out for pizza afterwards. Life is all the things that get in the way and cause you to deviate from your study plans.

Besides the little things in life that come up to detour the best made plans, I always planned ahead for those cabin fever moments. These are when you have been hitting the books every day for a month, when you have locked yourself away studying for so long that you see the efficient frontier in your sleep. These are the moments you need to step back and take a day or two off of studying or face some serious burnout.

When to start studying for CFA Exam

A lot of candidates and charter holders cringe when I tell them I started studying in November or earlier, more than seven months before the exam. When I say I started studying, they assume it was studying as they are used to doing when they start in February or March (studying every day for 15 hours a week until the exam).

When I say I ‘started’ so early, I mean a relaxed schedule of 5-10 hours a week for the first couple of months. Just reading through the curriculum but not worrying too much about problems or the exam. After the first reading, I would start through it again using study guides and working practice problems. This all gave me enough time to work through the curriculum and not worry about setbacks from ‘LIFE’ or burnout. I could take a week off if I needed to and still get back on schedule without drastically increasing study time.

There is a procedural component of your study planning as well, of which we’ll talk about tomorrow, but this time component is what trips up candidates the most. After all the time spent learning about the exams, after all the money spent on resources, it seems too simplistic that a lack of time is what causes candidates to fail but it’s true.

Learn to plan ahead and plan to pass the exams.
Thank you First Sergeant.

‘til next time, happy studyin’
Joseph Hogue, CFA

For the first part of the series and the problem of meta-studying, click here.

Last updated: July 27, 2016 at 6:15 am

Five Reasons CFA Candidates Fail the CFA Exams (Part 1)

Today’s post starts a five-part series looking at the top five reasons candidates fail any particular level of the CFA exams.

Two things should be obvious here:

  • The list, as with the majority of posts, is subject to opinion and may vary across candidates. Besides working through the exams myself, I have spent a great deal of time talking with other candidates about the exams and their preparation. I like to think I know something about the process, but you always need to focus the material from your own viewpoint.
  • The list is composed of things that candidates do across all three levels that make it generally more difficult to pass. Each level has its own idiosyncrasies and hurdles that may also make it difficult. The habits listed in this series are not level-specific.

Which CFA exam level is the most difficult?

While understanding why each level is difficult and how to approach each in your preparation is important, the type of question brings us to our first reason candidates fail.

TOO MUCH META-STUDYING FOR CFA EXAM

Candidates love to talk about the exams. They talk about which level is most difficult and why. They ponder the minimum passing score and trends in the pass rate. I have even seen forum posts on the best beverage to drink while studying. This is all meta-studying or [studying about studying].

Yes, you need to understand the topic weights on the exams. Yes, there are some great tips and tricks out there on how to approach the CFA exams. The problem is that candidates too easily use this meta-studying as an excuse to get out of actual studying. How many hours have you spent ‘researching’ how the tests are conducted, how to approach each topic area, the earliest one should start studying, or a myriad of other questions about the exams?

I have to be careful here. Your meta-studying is what brought you to the blog and I want you to come back regularly to listen to my ramblings. But I also want you to pass the exams and I have seen too many candidates sabotage themselves by spending too much time on the forums and not enough time actually studying.

Everything in Moderation

As with most habits, the first step is understanding the behavior and approach it with moderation. There is some great advice out there and it can make your life incredibly easier come the first Saturday of December/June. You need to know the general process involved and the idiosyncrasies within each exam, but you also need to know when to get off the forums and get to work studying.

Give yourself an hour or two every week to answer questions about the exams. You might take a little more during the first couple of weeks to familiarize yourself with a new level and you might take less time toward the end after you’ve learned what you need. The important point is to understand how much time you are spending and to make sure it does not come at the expense of studying.

  • If you have a specific question about the exams, especially while studying the curriculum, do not stop studying. Write the question down and address it later, after studying.
  • When looking for the answer to a specific question, try searching for the question using the forum’s search bar rather than making a new post. This will help answer the question quickly and will not bring you back to the post every time someone leaves a reply.
  • Find a couple of good sites (I hope this blog will be one) that you visit once or twice a week to see if there are any updates. Finding a new site can be helpful but don’t spend too much time surfing the web for new places to visit.

December and June will be here soon enough.
Good luck and happy studyin’
Joseph Hogue, CFA

Last updated: July 26, 2016 at 11:33 am

What are Earnings Saying about the Stock Market

Your ability to stay subjective and use the CFA curriculum will distinguish you as an analyst and asset manager

As the S&P 500 climbs to record highs almost on a daily basis, companies are starting to release their earnings for the second quarter. If earnings estimates are correct, the second quarter will mark the fifth consecutive quarter of year-over-year earnings declines.

That trend in earnings weakness hasn’t happened since the third quarter of 2009. As a result of the record high index and weaker earnings, valuations are set to climb even higher. The S&P 500 is already trading for 24.9 times trailing earnings of the companies in the index, 17% higher than its multiple this time last year.

This post isn’t really about earnings and the stock market though but about how you as an analyst need to be able to step back from the chorus of the market and manage your client’s money subjectively.

But Forward Earnings Aren’t So Bad

Against the dizzying heights we see in trailing P/E valuations, I hear more analysts and TV pundits talk about forward earnings to rationalize how the stock market isn’t too expensive. The 12-month forward P/E is a more reasonable 16.6 for the S&P 500, just 16% above its ten-year average of 14.3 times expected earnings.

Joachim Klement, CFA makes a very good point about the Forward P/E in a recent post on Enterprising Investor, the CFA Institute’s practical analysis blog. Klement compared the returns on the lowest P/E stocks against the highest P/E stocks across four international indexes. He ran the test first using trailing P/E multiples and then for Forward P/E multiples.

The result pointed to the perennial over-optimism of analysts and forward expectations. For the S&P 500, the cheapest group of stocks on a trailing P/E basis typically outperformed the most expensive stocks by 1.2% on a rolling basis. Using Forward P/E multiples though, the ‘cheapest’ stocks actually underperformed the more expensive set by one percent.

Relying on Forward P/E multiples as a measure of value just doesn’t work. Klement points out data that shows analyst expectations are, on average, 10% higher than actual realized earnings.

The issue isn’t just about being wary of forward estimates or investor sentiment in your job as an analyst but being generally critical on what you see in the market. I’m not saying the seven-year bull market is setting up for an imminent collapse but no bull runs forever. It’s usually as stocks get pricey and valuations get stretched that we see excuses for why ‘this time is different’ and some reasoning that supports valuations that are much higher than the historical averages.

Warren Buffett called out a warning earlier this year in his shareholder address, which we shared on the Finquiz blog. The Oracle of Omaha warned about the rising promotion of ‘adjusted’ earnings rather than reported numbers according to generally accepted accounting principles (GAAP).

Companies have always adjusted their earnings for one-time and extraordinary numbers and often have tried to soothe investors by pointing out other temporary factors but it seems recently the practice has gone much farther.

For example, dollar strength has weighed on earnings at U.S. corporations for more than a year. Over the last few quarters, I’ve noticed companies putting much more emphasis on their ‘currency-neutral’ earnings. Sometimes it’s difficult to even find their reported numbers with the currency effect.

None of these warnings on the use of forward multiples or adjusted earnings are new. It is all highlighted many times in the CFA curriculum, most clearly in the section on Accounting Shenanigans and Warning Signs.

What will distinguish your career as an asset manager and an analyst is your ability to stay subjective against everything you hear in the market. As everyone else starts marching to the same drumbeat, your ability to step back and use the material you learned from the CFA curriculum will help you spot opportunities both on the long- and the short-side of the trade.

‘til next time, happy studyin’
Joseph Hogue, CFA

CFA Results 2016 and How to Deal with a Fail

The time between taking the CFA exam and the release of results can be excruciating. The CFA Institute has released the date of June exam results July 26, 2016. Emails will start going out at 9am eastern standard but it may take several hours to receive your email.

How can you use the exam results to prepare for your next exam? How could you possibly deal with the results if you end up in one of the fail bands?

Decoding CFA Results 2016

Results will look like the graphic below with your percentage range in each topic within one of the three ranges. The graphic is actually from my Level 3 exam results but the format is the same for all three exams (I didn’t save my exam results for the Level I which seems a million years ago).

cfa exam resultsThe asterisks mark the range in which you scored. The CFA Institute does not release an exact score or a minimum passing score for the exam but you can still use your results for some useful information.

I scored greater than 70% in five of the eight topic areas on the item-set portion of the exam and between 51% to 70% in the remaining three topic areas. If these were results of a Level I exam, I would look closely at the three topic areas and their relative weight on the Level II exam.

For example, I know that Equity Investments is a very important part of the second exam and is worth between 15% and 25% of your total exam score. I might want to consider spending some time before my CFA Level II studies to review some of the Level I equity material to make sure I have a good base of understanding.

We published a basic strategy for the Level II CFA Exam which you might want to review.

How to deal with a CFA Exam Fail

Getting the email from the Institute saying you failed the exam is like getting punched in the gut. Your stomach sinks, you start to feel queasy and some even break down into tears.

You will hear all kinds of excuses and complaints about the designation and the CFA Institute after results are released. Some blame the questions, others try to make themselves feel better by saying that the designation doesn’t matter to their segment of the industry. These are all common coping mechanisms to deal with the results but you need to resist the urge. Your reasons behind taking the exam and the value of the designation have not changed and neither should your attitude.

Resist the urge to get mad at yourself or at the CFA Institute. Half or more of the candidates that take any given exam do not pass. The exams are tough and that is what makes the designation so valuable and will be a source of pride when you do pass.

Take an honest look at how you prepared for the exam and ask yourself where you could have improved your efforts. For most candidates, it is a matter of simply not devoting enough time to study the curriculum. Others may have done really well in a few topic areas but so poorly in core topics that it put them in a fail band. Either way, use the information in your exam results to see where you need to improve.

On the bright side, having taken the June exam means you are still able to register for the December exam and have a good chance at success. The Institute does not publish pass rates for repeat test takers but I have to believe that it is much higher than the general pass rates.

Not passing an exam is the worst thing to happen?

Contrary to what you may be thinking, it is not really too difficult telling friends, family and coworkers about the exam results. If not passing an exam is the worst thing to happen in your life, you are either very sheltered or not challenging yourself enough. Your friends and family understand that the CFA is important to you and will go out of their way to empathize.

If others in your office have taken the exam, they will know full well how difficult the test is and will not hold it against you. Unless you completely blew off studying, there are bound to be some topics in which you did well and can highlight your success in those areas. Take an honest approach and admit that you just have to work a little harder in the topics where you didn’t score as well.

What to tell the friends and family?

We published a post Exam Results, What to Tell the Friends and Family which you might want to review. Another helpful post is Exam Results Coming Soon, What if…?

‘til next time, happy studyin’
Joseph Hogue, CFA

Last updated: July 25, 2016 at 7:54 am

Getting the Job and CFA work Experience (part 5)

This is the last post of a series we have run over the prior few days highlighting some of the great resources available to candidates through the CFA Institute’s Career Resources. We covered networking, branding, job search techniques and interviews in previous posts. Today, we will wrap it all up with career management and what to do after you’ve got your dream job.

For resources from the Institute: Click through to CFA Institute – then to Career Resources – and then to Library. Click Career Management Webcasts and Podcasts and access 78 resources.

Did you forget how hard you worked to get the job?

The resources on career management are all podcasts, between 10 minutes and an hour, and take longer to browse through than the other topics we’ve reviewed. Don’t neglect the topic though, it is one of the most overlooked by employees.

The fact is that many people stop strategically thinking about their career after they land a job. Worse yet, many forget how grateful they were and how hard they worked to get the job and they soon fall into a daily routine that gets them nowhere. Constant career management is about two things, guiding your long-term career goals and guiding your career where you currently work.

Just because you love the company for which you work does not mean you want to or have to work their forever. It may be a great job and give you tons of experience but there are a number of reasons why your long-term plans may take you elsewhere.

  • Is the firm large enough for advancement opportunities?
  • Will the position/sector you want ever be available?
  • Does the firm deal in the asset class in which you want to work?
  • Does the culture fit with your long-term goals, i.e. family

Don’t forget that even the strongest, most long-lived firms may fall on hard times. Even if you see yourself at your current employer, you cannot afford to completely cut yourself off from the rest of the investment community.

Guiding your long-term plans just means being aware of how you want your career to progress, what rungs do you want in your career ladder, and devising a rough plan on how to climb your ladder. This includes knowing the limitations of your current firm and what other firms can offer. The four-part Career Conversations series with Khalid Ghayur lays out the topic very well and is definitely worth a look.

Guiding your career where you currently work may or may not be different from your long-term plan. I included it as a separate idea here because I see a lot of employees quickly fall into a rut after they get the job. The worked so hard to get the position, were so happy to get it but then lose their momentum. That desired position becomes just another job and they miss out on the opportunity to manage their career at the company.

Everyone’s job can get monotonous at times. The best advice I can offer is to formalize milestone career goals. These should be things you want to accomplish within six-months, one-, three- and five-years. The earlier periods (i.e. six-months and a year) should have multiple goals and may be more defined while the longer-term goals may be more strategic and vague. Regularly reevaluate your milestone goals to make sure you still want to get there and you are on track to achieve them.

Again, doing all this alone will not be half as effective as seeking the advice of someone else. With career management it is better to seek the advice of a supervisor or mentor rather than a peer. You don’t have to tell your supervisor that you see your long-term goals at another company but talk with them openly about how you can advance at the firm.

It strikes me, writing this series on getting a job and career management, that two very important ideas are prevalent across all the topics.

  • You need to be strategic to reach your goals. Know where you want to go and plan on how you can get there. Planning two steps ahead will put you at least one step ahead of the rest of the crowd that is reacting to their environment instead of guiding it.
  • You need to be active to reach your goals. Too many people passively go with the flow and wait for opportunities to come their way. Unless you have a guardian angel (i.e. someone that is pushing you to your goal and being active for you) then opportunities are not going to seek you out. You need to seek them out by knowing where you want to go and putting yourself in front of them. Attend conferences and professional events, be active in your local CFA society, do research into special topics and become an expert in things that may not be directly related to your current position.

We’ve still got at least four months before you need to start thinking about the next CFA exam. This is the perfect time to review the resources on the CFA Institute’s website, career resources or otherwise. Don’t just be a participant in your life’s story, actively guide it and you won’t regret where you end up.

‘til next time, happy job huntin’
Joseph Hogue, CFA

Getting the Job and CFA work experience (part 4)

This is the fourth post of a series we will run over the next few weeks highlighting some of the great resources available to candidates through the CFA Institute’s Career Resources. We covered networking, branding and job search techniques in previous posts. This week, we will look at one of the most intimidating and difficult stages for many candidates, interviewing.

For resources from the Institute: Click through to CFA Institute – then to Career Resources – and then to Library.

From 1-in-100 to 1-in-10


Congratulations, you have made it through the mountain of submitted resumes for a position and actually landed an interview. Getting the call for an interview is a huge affirmation of your skills and experience, especially in today’s ultra-competitive environment.

As great as it is to make it to this stage, don’t forget that there are likely at least five or ten other candidates that want the job as badly as you. You’ve improved your chances but you can’t let up on the effort until you sign the employment contract.

  • Understand the company and the type of person they usually hire. Are many from a specific school or field of study? Do they prefer newbies or people with strong experience? What is the workplace atmosphere, laid-back or hard-charging? Most candidates will give a cursory glance at the company’s website but this won’t tell you anything about how personalities fit in the office. Proving you are a good fit with the culture is just as important as proving your skills and experience.
  • As with your resume, it is important to be able to answer questions with definitive proof. Make sure you are able to support your skills with an anecdote and quantitative proof.
  • Be brief and listen to what they are saying. Avoid talking for more than a couple of minutes without some input or response from the interviewer. This will help avoid rambling or getting off topic. If you can turn the interview into a conversation, it becomes much more enjoyable for both and increases your chance of making a connection.
  • Don’t be afraid to ask for feedback on your answers and skills. If you can address the interviewer’s biggest problems/concerns during the interview then you’ll have a better chance when they are making the decision later.

The Behavioral Interview

The ‘Behavioral Interviewing Worksheet’ provides a nice template for answering experiential questions. These behavioral experience questions are popular with many employers because they cause you to ‘prove’ your abilities through actual experience. Make sure you keep each part of the question brief, the worksheet recommends 2-3 sentences, because it can be too easy to ramble and lose focus.

If you thought you were done with networking when you got the call for an interview, think again. One of the best suggestions I’ve ever heard was to find someone already working for the company to get the inside-scoop on the interview. They may not offer much, depending on how well you know each other but it is an opportunity you do not want to pass up. Does the company ask behavioral questions, will there be some kind of test, do they ask opinion or off-topic questions? Having an idea of the type of questions could save you a ton of time in preparation.

While it should go without saying, make sure you follow-up with everything you promised in the interview. Did you promise to provide contacts for references or to find some other information? At minimum, you need to send an email thanking the interviewer for their time.

As with most of the steps we’ve looked at in the series, you really need to be working with someone on your interviewing skills. It’s easy to sit there and read your pitch back to yourself but you’ll never get the feedback you need. Find someone else on the LinkedIn CFA group or around your city that is also job hunting and team up for feedback and support.

Tomorrow, we’ll wrap up the series with career management and what to do after you get the job.

‘til next time, happy job huntin’
Joseph Hogue, CFA

Getting the Job and CFA work experience (part 3)

This is the third post of a series we will run over the next few weeks highlighting some of the great resources available to candidates through the CFA Institute’s Career Resources. We covered networking and branding in previous posts. This week, we will look at resume writing and strategic job searches.

For resources from the Institute: Click through to CFA Institute – then to Career Resources – and then to Library.

Do people still use resumes?


There is only one resume link to, “Insider Tips for Resume Writing,” offering nine bulleted tips. In the age of ubiquitous internet profiles, resumes may seem outdated but are still universally used by employers.

HR and employer time is limited, especially with the hundreds of resumes they may be receiving, so it is imperative that you get there attention quick. Put a summary section above everything else that gives a one or two sentence pitch and offers a few bullet points of your top achievements or skills.

One of the hardest but most important things to do on a resume is to quantify your accomplishments. Anyone can say they helped improve the return on a portfolio but you need to be able to prove it. Spend some time to analyze your own contribution to your past employers. Did you suggest and/or lead a project or investment. If your split with the employer was friendly, they might be able to offer ways to quantify your accomplishments.

In keeping with the idea of a restricted time reading your resume, the tips suggest limiting it to two pages though I am still from the old school that tries for one page. This means limiting the amount of information and the number of employers you list. Focus on your most recent and most relevant experience.

Crafting a superb resume is still not going to get you out of networking. The author of the linked tips states that 75% of all new positions are won through networking. While I’m thinking this seems a little high, you absolutely must make those personal connections.

Strategic Job Searches


I couldn’t have told you what ‘strategic job searches’ were before I started this post but the Institute offers nine files for review so I figure there must be something to it. From reading through the resources, it appears that searching ‘strategically’ is just integrating all the topics (i.e. resume writing, branding, networking, interviewing) and formalizing a process for the search.

As a type-A person who likes to have everything planned out ahead of time, the need for a strategic search seems obvious but the resources are no less helpful. It strikes me that a lot of candidates think getting a job begins with a search on Monster or eFinancialCareers but have very little idea of what they actually want to do besides make money. If you do not fully understand what you want and what you can offer, then you won’t be able to relay that to a potential employer and will have nothing to separate yourself from the crowd.

I would highlight two resources available on the site. Effective Job Search Campaigns gives you a template, though you may want to add or delete some sections, to formalize a marketing plan and a few helpful tips on networking.

Job Search Strategies for Today is probably the most detailed resource with 44 slides that cover quite a few different topics including resumes, planning and social media. You will want to take some of the ideas within this resource to develop the template from the previous resource.

Tomorrow, we’ll look at those all-important interviewing skills.

‘til next time, happy job huntin’
Joseph Hogue, CFA

Getting the Job and CFA work experience (part 2)

This is the second post of a series we will run over the next few weeks highlighting some of the great resources available to candidates through the CFA Institute’s Career Resources. We covered networking in last week’s post and, as much as I would like to move into resumes and interviewing, we need to cover something almost completely overlooked by job candidates…personal branding.

For resources from the Institute: Click through to CFA Institute – then to Career Resources – and then to Library. I like the presentation, Building and Managing a Professional reputation, for its straight-forward questions but it won’t take much time to browse through all the material on the site.

Personal branding? It’s not like I’m Coca Cola

You may not be a multi-billion dollar company with a product to push but you are still trying to sell something, yourself and your skills.

Sure, you hold the CFA designation or are working towards it but that puts you in the company of about 280,000 other charter holders and candidates. That is on top of the masses of new finance grads and the consolidation in equity analysis over the last few years that has left fewer positions for which job seekers must compete.

Personal branding WILL get you a job! and your CFA work experience

I can say this so confidently because the process is so neglected by job seekers that working it into your job search will distinguish you from all the rest. As with networking, there are several slideshows and resources on the Institute’s webpage. Most are relatively brief, notes from a presentation, so you might want to check out something from the library. You don’t have to spend weeks developing a plan but give it the time it deserves and it will pay off.

Branding is actively creating a perception of yourself and your skills. This means sitting down to think through the idea and writing down a formal plan. Do not just spend 30 minutes and figure that you will remember your brand without writing it out. Actively creating your brand means seeking out ways to display it so it gets built into people’s perception. This includes public speaking, writing or blogging, as well as highlighting it on all your communications material like resumes and business cards.

The best advice I got from the resources on the website was to be focused and differentiated, understand your value proposition and the specialized solutions you can offer. Think creatively here. Experience is not the only value proposition. If you lack experience, you need to develop your brand around something else.

Potential brands

  • Cross-specialization : Are you someone that has strong experience in other areas? There are tons of analysts out there but many cannot put two sentences together intelligibly. I have built my brand around being able to produce persuasive and thoughtful writing around strong fundamental analysis.
  • Perseverance: Everyone says they are passionate and will, “do what it takes.” If you can prove it with a short anecdote then the brand might be yours. Have at least two stories of how you went above and beyond or overcame huge obstacles.
  • Be the First or the Leader: You don’t necessarily have to be the very first to do something as long as there are few that do it. Make sure to pick something that will be in demand by a large enough universe of employers.
  • Be the Expert: This doesn’t necessarily mean being the global expert but could be the Expert among the group of job candidates. If you do not work in the topic or have much experience, you’ll have to take the time to develop it. Read everything you can on the subject and seek ways to develop your expertise. Volunteer to speak on the topic or submit analysis to journals or to newsletters.

As with any communications strategy, branding works best if it is integrated across multiple channels. You need to focus on your brand across your LinkedIn profile, resume and cover letters, business cards and in your face-to-face interactions.

Whatever brand you choose, stop saying you are, “well-rounded!” Do you know what this tells me, that you do not know your strengths or are not an asset in any particular area. It is fine to have some good general knowledge but you need to be able to bring something extra to the team.

Tomorrow, we’ll look at a few resume tips and some job search strategies.

‘til next time, happy branding.
Joseph Hogue, CFA

Last updated: July 21, 2016 at 5:10 am

Getting the Job: From Networking to Interviews and Beyond

This is the first post of a series we will run over the next few weeks highlighting some of the great resources available to candidates through the CFA Institute’s Career Resources to help you in getting your CFA work experience. We’ll start with some networking ideas, highlighting some of the best articles, handouts and presentations available on the site.

Through the next few weeks, we’ll move through the career search highlighting interviewing, resumes, personal brand development and communication skills. Don’t feel like you have to wait for the posts though, click through to the CFA Institute’s site and take a look at some of the resources available.

Click through to CFA Institute – then to Career Resources – and then to Library
You will need your candidate Id number to login to the site.

It’s not what you know
After 300+ hours studying for your exam and countless hours spent in your undergrad program, I’ve got bad news.  You may have neglected the most important skill for our industry.

Most people think of networking only when they get ready to find a job to meet CFA work experience requirement. Don’t let the fact that you’ll spend much of your day following portfolio returns and market analysis fool you, your success in the investment and asset management industry lives and dies on relationships. This is most obvious for the brokers and advisors but the dealmakers and analysts also need to know who is looking in the market for their advice and expertise.

Networking to get CFA work experience can be frustrating at first.

It’s not really taught in school and the ease of social media platforms like LinkedIn has given people a false impression of how to really make connections. Networking is not adding someone as a “connection” on your profile and it is not simply “Liking” someone’s re-post of the cat playing piano video.

Networking is about getting to know others, their job and their personality, and understanding how the two of you can work together to achieve both your goals.

Ok, so most of you are saying, “That’s fine but I NEED a job now and that’s the only thing I’m thinking about.” That’s understandable and your networking will eventually lead to job opportunities, but…

Try to approach networking first as the opportunity to meet others in the industry and learn. Too many job hunters rush through getting to know someone and jump right into asking for a job. When you do this at a social event or conference, you immediately stop being someone with which the other person is interested in building a relationship and become just another resume.

There are a few handouts and multimedia podcasts available on the CFA site.

Handouts like these will give you tips and some good starter advice for networking but the best way to learn is by getting out there and practicing.

Don’t just scan through the handouts. Actively read through and compare the advice with your experience in the last couple of times you’ve been to a social or networking event. Did you do anything particularly well? Chances are you will find some points that you either didn’t do well or actively avoided. Use the handout and your experience to write out a networking plan, not a long book on meeting people but a half page outline on what you are going to do at the next event you attend.

Better yet, write it on a small index card and take it to the event with you. Looking back on the outline during the event can be a great way of forcing yourself to do some of the things that you actively avoided in the past.

There are a ton of tips available in the handouts but my favorite is to network with a friend. Working with a peer will help you develop your ‘elevator speech’ ahead of time. At the event, you can use each other to help with introductions. Each of you plan on meeting at least 3-5 people then introduce each other to the people you met. After the event, talk about what you were able to do from your outline plan, what you might have missed and what you learned.

Your local CFA society is your best bet for networking events related to CFA work experience.

From there check out the local business organizations and your connections through LinkedIn. After going to a few events, you will start to see familiar faces and your ‘real’ network will grow exponentially. Start talking about what you want to do through your career and what you think you be great at doing.

Tomorrow, we’ll look at a few resume tips and some job search strategies.
‘til next time, happy networkin’
Joseph Hogue, CFA

Last updated: July 21, 2016 at 5:10 am

Notes from the 2015 CFA Candidate Survey

The 2015 CFA Candidate Survey presents some interesting facts and study hints for other candidates

The CFA Institute surveys candidates each year before and after the exam to help improve the curriculum and the CFA candidate experience. The survey results offer an interesting look into what type of candidates are attracted to the CFA and the overall candidate profile.

The Institute surveyed nearly 16,500 candidates before the exam and almost 25,000 candidates after the exam. The response rate varied between 21% and 31% for each cohort.

Results of the 2015 CFA Candidate Survey

Candidates for the June 2015 CFA exam ranged from age 21 through 65 and from more than 141 international markets. The majority (75%) were employed full-time along with 15% students, 6% unemployed, 2% self-employed and 1% unemployed but not looking for work.

CFA Candidate Employment Status

CFA Candidate Employment Status

There was even a small percentage of candidates (0.05%) that reported being retired. The CFA exams are a challenge to which many aspire. I’ve talked to a few candidates that were already retired and hear that many people always wanted to take the exams but never felt they had the time or failed several times during their busy careers. Taking the exam while retired gives many the chance to accomplish their goal even if they don’t plan on using it professionally.

Nearly half (41%) of candidates reported employment in one of six job functions including portfolio management, research & analysis, risk management, consulting, corporate finance and accounting.

The part of the CFA candidate survey that I’m always most interested in seeing is the section on exam preparation. The CFA Institute surveys candidates on how long they prepared, resources used, emotions leading up to the exam and many other topic areas.

As is almost always the case, candidates reported spending just over 300 hours on average to prepare for each of the CFA exams. Actual averages from the 2015 candidate survey were:

  • 308 hours average across all three exams
  • 287 hours average for the Level I
  • 315 hours average for the Level II
  • 327 hours average for the Level III

Most candidates (78%) reported using the official CFA Institute curriculum and 72% reported using the Institute’s mock exam to prepare. Nearly two-thirds (61%) reported using third-party prep materials as well. Only 5% of candidates reported taking part in a local study group.

What I thought was a little disturbing was that only 51% reported doing the end-of-chapter problems in the curriculum. That means about a third of the candidates that used the official curriculum didn’t bother doing the end-of-chapter problems. What did they use then to test their retention?

I won’t get into a rant on the importance of working practice problems but high fail rates on the exams shouldn’t surprise you when so many candidates neglect some of the best resources available.

More than a quarter (28%) of respondents thought the exam questions were more difficult than they expected while 63% thought they were as difficult as expected. Most candidates (73%) felt the questions were all or mostly clearly written while 2% felt many of the questions were not clear.

The Institute asked candidates to rate the most difficult three topics on each exam.

  • On the Level I exam; Fixed Income, Ethical & Professional Standards, and Financial Reporting were claimed as the most difficult
  • Level II CFA candidates had trouble with Fixed Income, Derivatives and Alternative Investments
  • Level III candidates reported Derivatives, Ethical & Professional Standards, and Portfolio Management as the most difficult topics

The fact that candidates reported these topics as the most difficult should give you ideas on studying. Many of these difficult topic areas are also high-value topics on the exams so you might want to spend extra time making sure you master the material.

A third of the candidates reported taking the CFA exams for career advancement or development while increased competency and professional status also ranked highly as candidate motivations. The CFA Institute also asked candidates to rate their expectation for employment opportunities over the next 12 months. On a global level, there were about an equal share of candidates expecting more and less opportunities. The tool allows you to filter by country so check it out.

The results of the 2015 CFA candidate survey are available here. You can view the results by web-page or in the pdf version. Even if you don’t learn anything from the results, it makes for an interesting look into the candidate profile.

‘til next time, happy studyin’
Joseph Hogue, CFA

Last updated: July 18, 2016 at 15:41 pm