Is the CFA Program Exam More Difficult Now?

Perhaps an unanswerable question but candidates are always wondering if the CFA Program exams are more difficult now than in the past

A common question we get at Finquiz each year, especially as candidates wait for their exam scores and look at pass rates provided by the CFA Institute for prior years, is has the CFA exam become more difficult over the years.
It’s a taboo question for some. It’s probably impossible to answer with certainty and emotions get high when you start comparing your CFA Program exam against others’.
Let’s look at the pass rates for the CFA exams over time and then some ideas of whether the exams are more difficult now than in the past.

Are the CFA Program Exams Getting More Difficult?

Looking at CFA Program exam pass rates over time suggests that the exams are getting more difficult but there are other factors that could be involved.

  • Pass rates for the CFA Program Level I exam have fallen from an average of 57% over the five years through 1989 to just 40% over the last five years
  • Pass rates for the CFA Program Level II exam have fallen from an average of 65% over the five years through 1989 to just 44% over the last five years
  • Pass rates for the CFA Program Level III exam have fallen from an average of 74% over the five years through 1989 to just 52% over the last five years

CFA Programpass rates over time
While there is a lot of volatility in pass rates from one year to the next, the trend over the last 30 years is fairly clear. The percentage of candidates passing their exam each year is falling.
There have been a lot of changes to the CFA Program exams over the years and it seems the curriculum has ballooned with new material. One candidate reports seeing a CFA Program Level III exam with just four essay questions as opposed to the 10+ essay questions on today’s exam. A few of the topics including Alternative Investments, Derivatives and GIPS didn’t exist in the past.
So the curriculum has definitely expanded along with the body of knowledge available in the industry but are there other reasons why pass rates have fallen?
There could certainly be some intent in the lower pass rates. With ever more candidates registering for the exams, the CFA Institute may be increasing the minimum passing score to manage how many pass. While the Institute needs to add new dues-paying members every year, it also doesn’t want a massive flood of new charterholders to overwhelm the industry. There’s no way of knowing whether this is true or not because the minimum passing score isn’t public but it’s one theory.
There could also be a geographic explanation to falling passing rates. Many more candidates come from non-English speaking countries than have in the past. While English proficiency among international candidates is very good, you would expect it to be more difficult for non-native English speakers to pass the exams. I speak conversational Spanish but there’s no way I would have been able to pass the CFA Program exams in the language.
In the end, is there really a need to compare the CFA Program exam of today with bygone years to say that either is more difficult? The industry changes, requiring a different skill set of analysts and money managers. The knowledge you needed to be successful in the 80s was far different from what you need as we reach farther into the 21st century.
What we should really be asking is whether the CFA Program exams remain as difficult as the industry needs them to be. As charterholders and future CFA charterholders, we need to require that the Institute and our community keeps up with changing requirements in the industry and designs a curriculum that will hold to the highest standard of the past. This means continuously updating your own knowledge even after passing the CFA Program exams and sharing that new skill set with the Institute and within your local societies.
‘til next time, happy studying
Joseph Hogue, CFA

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