One of the toughest exams in the financial field is the Chartered Financial Analyst credential. In terms of study time, dedication, and making lifestyle adjustments, the CFA exam is one of the most demanding and challenging projects you can take up.
This can be estimated from the pass rates of the three levels. Level 1 pass rates are traditionally around 42%, while Levels 2 and 3 are generally around 45% and 52%, respectively. The low pass rate can be attributed to the time commitment needed to pass all three levels of the CFA exam.
Another reason for the low pass rate is the time between the exams. If you fail an exam level, you must wait at least 6 months to retake the exam. This waiting time can be discouraging, and causes many candidates to eventually quit the CFA exam altogether.
This post will go into detail about the CFA exam syllabus for Level 1, the changes made starting February 2023 and the upcoming changes 2024-25.
Contents
CFA Level 1 Format
Understanding the CFA Level 1 exam structure in place as of 2022 will help us better understand recent and future changes.
The CFA exam content Level 1 has two sections of 90 multiple-choice questions, split into 135 minutes each.
The first section covers the following topics::
- Ethics and professional standards,
- Quantitative methods,
- Economics, and
- Financial statement analysis.
The second session covers:
- Corporate issuers,
- Equity,
- Fixed income,
- Derivatives,
- Alternative investments, and
- Portfolio management.
CFA Level 1 Exam Curriculum 2023
Let’s examine the changes to the CFA exam content Level 1 enacted for the 2023 CFA Program. The CFA Level 1 exam structure changes were limited to specific modifications in certain areas of the syllabus. Here are some of the main ones in this regard.
- Through 2022, the focus of the curriculum has typically been on Readings. From 2023 onward, the structure of the CFA Level 1 structure will lean more toward a Learning Module (LM) structure. LMs are bite-sized lessons that can be completed quickly, often in half a day. This will undoubtedly save candidates a ton of time.
- Apart from replicating the learning patterns of candidates in general, LMs now have more spreadsheets, charts, and visuals, a mastery of which is essential to progress in a financial career.
- The Alternative Investments and Derivative sections have been incorporated into the LM structure from 2023. Thus, the comparison of the “number of readings/chapters” that was present in 2022 is no longer valid for 2023.
- In the Corporate Issuers and Economics section, 3 new readings have been added this year.
- The important Portfolio Management topic has got a minor content update. Take the case of the reading on Fintech in Investment Management. It now includes additional content on DeFi and Blockchain.
What do all these changes mean for you for the CFA exam syllabus Level 1?
There are now 73 Learning Modules in 2023 as against 60 in 2022. While the number of readings in 2022 remains the same in 2023, some have been changed, replaced, or renamed to LMs. Moreover, 6 Learning Modules in the Corporate Issuers topic have been updated.
If a major change is to be counted, it is the addition of 2 Learning Modules in Corporate History and one in Economics. These are LM 13 – Introduction to Geopolitics, LM 28 – Corporate Structures and Ownership, and LM 30 – Business Models.
Will Candidates Gain From the CFA Exam Changes?
With all of the CFA Level 1 exam curriculum changes starting February 2023, are they beneficial for the candidates?
Let’s consider what the Managing Director for Credentialing at the CFA Institute Chris Wiese, CFA, has to say:
“Graduates and early careers professionals pursuing the CFA qualification are building a firm foundation of investment knowledge that will support them as they begin their professional lives. Among this year’s key updates to the curriculum are an extensively remodeled Derivatives reading at Level I, often a particularly tough section for candidates, as well as a brand-new reading on geopolitics and updates reflecting the recent evolution in decentralized finance and blockchain.”
Chris Wiese, CFA – Managing Director for Credentialing at the CFA Institute
Chris is confident that the introduction of bite-sized lessons and modules will lead to better time management for the candidates. Spreadsheets and visuals will make the learning process easier and provide more opportunities for students to test their skill sets and level of preparation.
The CFA exam Level 1 curriculum changes will also bring access to a wide range of materials through the Learning Ecosystem (LES). This is an online learning tool that offers several prep materials such as mock examinations, flashcards, and practice questions.
These will help you learn your strengths and weaknesses and focus on the areas that need more attention.
Upcoming Changes in the CFA Exam Content Level 1 – 2024/2025
Some sections of the Level 1 CFA exam syllabus will be moved from the course content and simply remain as reference materials. The purpose of the exercise is to avoid duplication of the curriculum and streamline it further.
The topics that will be removed are:
- Time value of money,
- Basic statistics,
- Microeconomics, and
- Introduction to company accounts.
These topics are still important for finance professionals to understand. However, moving them out of the course material will give candidates more time to concentrate on skills models and more advanced concepts.
Given here are some of the areas that the changes for 2024/25 will impact your CFA Level 1 exam experience and preparation.
- Extended eligibility: Students who still have two years (23 months) remaining in their undergraduate studies can now appear for the CFA Level 1 exam. It will increase their chances of securing internships or entry-level jobs and give them a leg up to a lucrative career.
- Practical Skills Module: Starting February 2024, Level 1 examinees have to complete at least one PSM and the choice is left to the specific interests of candidates. PSMs are so designed that they help to improve practical skills in several areas like Python programming or financial models. PSMs are not a part of the primary CFA Level 1 exam curriculum and may be completed anytime as per convenience but not later than after the exam or before the release date of the results.
- Rationalized curriculum: The focus of the changes for the CFA Level 1 syllabus is on refining the practical skills of aspiring charter holders. This is why a few basic financial topics have been removed from direct assessment though they will be available as pre-read materials to plug any gaps in the knowledge base.
The CFA Institute is also offering a Level 1 practice pack for $299 for the May 2023 exam and with the February 2024 Program enrolment and exam registration.
These changes will not impact you if you are a current Level 1 candidate. But starting with the 2024 CFA exams, you will have to compulsorily complete a PSM.
CFA Investments Exam Chapters 1-6 Portfolio Analysis Course
If you are interested to boost your career in the finance industry, or looking to expand your knowledge of the industry while working alongside top professionals, taking the CFA Investments exam chapters 1-6 of the Portfolio Analysis course should be your starting point.
The Investment Foundations Certificate has six courses that equip you with the necessary skill sets to make more informed career decisions. The Certificate course is based on case studies and scenarios that give you a thorough understanding of ethics, investments, and finance.
Chapters 1-6 of the Portfolio Analysis course are as follows.
- Industry Overview and Structure: An introduction to the structure of the investment industry, including types of institutions, functions of participants, and types of services.
- Types and Functioning of Markets: An introduction to primary and secondary markets and how they operate.
- Investment Instruments: An introduction to the types and characteristics of primary investment instruments.
- Investment Inputs and Tools: Enhanced understanding of how investment professionals identify relevant information and how the analysis of that information affects their investment and financing decisions.
- Serving Client Needs: An introduction to how investment firms serve clients’ investment needs and examine risk considerations and management.
- Serving the Greater Good: An introduction to the benefits, key concepts, and approaches to ESG investing and its link to DEI.
Registration for the CFA Investments exam chapters 1-6 of the Portfolio Analysis course costs $350 and once registered, you have 12 months to complete the six courses and a final assessment. This assessment is automatically available to all registered candidates through the online learning system.
CFA Exam Syllabus in India
The CFA exam syllabus in India is no different from what is conducted elsewhere as it is a globally recognized designation provided by the CFA institute. To get this Chartered Financial Analyst (CFA) certification, candidates have to complete three levels of the exam.
Level 1 mainly tests the basic knowledge of candidates about investment tools and the exam consists of 180 multiple-choice questions spread over two sessions of 135 minutes each. Level 2 is focused more on understanding the concepts of finance rather than memorization of content. The exams have vignettes and each vignette has 4-5 sets of questions to be answered. Level 3 has essay-type questions.
Once you crack the CFA exam, among the top job opportunities in India are Portfolio Manager, Private Banker, Research Analyst, Relationship Manager, Financial Advisor, and Financial Strategist among others.
Summing up
As is seen from the changes made in the CFA exam content Level 1 for 2023 and 2024/25, there is no major overhaul. For the 2023 exam, some readings have been done away with and the content leans more toward a Learning Module structure which are typically bite-sized lessons that make for a better learning experience.
The main benefit of 2024/25 candidates is that they can sit for the Level 1 exam even when they have 23 months left to complete their undergraduate studies. This gives them a head start in their careers.
