Achieving the Chartered Financial Analyst (CFA) qualification is a fantastic goal that can open many doors in the finance industry. But the journey involves passing three challenging levels.

To help you succeed, let's explore what each level involves.

CFA Program: Level 1

Think of CFA Level 1 as the foundation of your CFA journey. This exam is designed to give you a broad understanding of the investment management industry, covering a wide range of essential tools and concepts. It's all about building the knowledge base you'll need for the more advanced levels.

What to expect

• CFA Level 1 consists of 180 multiple-choice questions, split into two sections.
• The questions test your knowledge of fundamental concepts and formulas.
• The exam sessions take place four times a year in February, May, August, and November.

Key topics

• Ethical and professional standards: This is a crucial part of all three exams, but it carries significant weight at the first level.
• Quantitative methods: You'll cover topics like the time value of money, statistical concepts, and probability.
• Economics: Includes microeconomics, macroeconomics, and foreign exchange.
• Financial statement analysis: This is a major topic, focusing on how to read and interpret financial reports.
• Corporate issuers, equity, fixed income, derivatives, alternative investments, and portfolio management.

The pass rates indicate just how challenging the exam can be, so a disciplined study plan is essential. We recommend at least 300 hours of study to feel confident on exam day.

CFA Program: Level 2

Once you've passed Level 1, you're ready for Level 2. This stage is all about application. You’ll take the foundational knowledge from Level 1 and apply it to more complex scenarios related to asset valuation. This level is often considered the most difficult by many candidates due to its depth and detail.

What to expect

• Level II uses a different format called "item sets." You'll be presented with vignettes (short case studies) each followed by four multiple-choice questions.
• There are 88 questions in total.
• This exam format requires you to analyse a situation and apply your knowledge, which is a big step up from the direct questions in Level 1.

Key topics

• Financial statement analysis: This remains a heavily weighted topic, but with a deeper focus on analysis, intercorporate investments, and multinational operations.
• Equity investments: You'll dive deep into equity valuation models.
• Fixed income, derivatives, and alternative investments: These topics also become more complex and analytical.
• Ethical and professional standards: Ethics continue to be a core component.

Success at Level 2 depends on your ability to connect concepts and apply them practically. It requires more than just memorisation - it demands true understanding.

CFA Program: Level 3

Congratulations on making it to CFA Level 3. This is the final exam standing between you and the CFA charter. The focus shifts from valuation to portfolio management and wealth planning. You'll learn how to integrate and apply everything you've learned to manage portfolios for individuals and institutions.

During this level, you’ll need to choose one of three specialised pathways. While the core curriculum is the same for everyone, the chosen pathway will determine 30-35% of the total curriculum and exam content. These three pathways are portfolio management, private wealth, and private markets.

What to expect

• Level 3 has a mixed format. One session consists of constructed response questions (essays), where you'll have to type your answers. The other session uses the same item set format as Level 2.
• This combined format tests not only the application of your knowledge but also your ability to communicate your analysis effectively.

Key topics

• Portfolio management and wealth planning: This is the core of Level III, making up a significant portion of the exam.
• Asset allocation, portfolio construction, performative measurement, derivatives, and risk management.
• Ethical and professional standards: As always, ethics are a critical part of the exam.

The essay portion can be intimidating, but with practice, you can master it. The key is to be clear, concise, and directly answer the question asked. Passing Level 3 demonstrates your readiness to act as a professional portfolio manager.

Ready to start your journey?

The path to becoming a CFA charterholder is demanding, but it's an incredibly rewarding achievement. Each level builds on the last, equipping you with the skills and knowledge to excel in the world of finance.

We have been helping people train for success for over 80 years. We know exactly what it takes to pass CFA exams and are ready to help you achieve your goals too. Explore our CFA courses to find the support you need to succeed.