The CFA level 1 exam is often considered a make or break exam for many candidates. Since 2010, the CFA Level 1 pass rate has hovered around 40%, making it one of the more difficult exams in the finance niche. Don’t be discouraged though. If you’re looking at a potential career as a CFA, there’s a lot you can learn from the pass rates for CFA level 1 before starting your own journey.
First of all, the CFA should not be taken lightly, and it’s not the type of exam you can breeze through without committing to a hefty study schedule. As the initial exam in the series, the CFA level 1 pass rates naturally include many candidates who don’t put forth enough effort to pass the exam. Once they fail, they either buckle down and re-take the exam until they pass, or they quit altogether.
The most important takeaway here is this: To ensure a high chance of success, give yourself plenty of time to prepare for the CFA level 1 exam. The industry rule of thumb is 300 hours, which generally takes most candidates 6 months or more to complete.
To learn more, let’s take a deeper dive into the CFA Level 1 pass rates and see what else is behind the numbers.
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CFA Exam 1 Pass Rate By Year
What is the pass rate for CFA Level 1
Let’s have a look at recent historical results of the CFA level 1 exam pass rates:
The all-time pass rate for CFA exam Level 1 is 41%, the lowest of the three CFA exams. Further, more candidates sit for Level 1 than the other two combined, indicating that many either retake the exam or quit pursuing the credential altogether after failing level 1.
Pass rates can be a reflection of how difficult an exam is, but they reflect the strengths and weaknesses of the candidates taking the exam.
One reason the pass rate for CFA Level 1 is the lowest of the three is that the examinees are typically new to this field or trying to break into finance. Many don’t have extensive work experience in the field or as strong of an understanding of the concepts tested on the exam. Here is the Level 1 pass rate in comparison to the others taking a 13-year average, starting in 2010.
- Exam Pass Rate for CFA Level 1 – 40%
- Exam Pass Rate for CFA Level 2 – 44%
- Exam Pass Rate for CFA Level 3 – 51%
The highest pass rate recorded to date for the CFA Level 1 exam is 49%, registered in December 2020 while the lowest is 22% for the July 2021 exam. Both occurred during the pandemic, which appears to have caused some short-term variance in the numbers. The averages during 2022 and 2023 thus far are 36 and 38%, respectively, and are much closer to the long-term averages.
CFA Level 1 Pass Rates vs Candidate Volume
What about candidate volumes for the CFA level 1 exam?
The candidate volume appearing for the Level 1 exam started growing heavily in 2015, largely because of the increased recognition in the business community and lucrative career prospects that CFA charter holders can gain from holding the charter. However, the pandemic seems to have coincided with a significant shift and potential decline in CFA candidates. The number of examinees dropped drastically, and CFA level 1 candidates still a fraction of what they were pre-pandemic.
Is there a correlation in the number of candidates taking the CFA level 1 exam and the pass rates? It’s difficult to say, but it may indicate that the CFA charter may have reached a saturation point in the market pre-pandemic, and the post-pandemic levels are simply a market adjustment.
Minimum Passing Score to Determine the Pass Rate
The Minimum Passing Score (MPS) is the lowest score a candidate can get to pass a particular level of the exam. Understanding the MPSs give us another view of the exam difficulty, particularly when preparing with a CFA review course and taking mock exams in the lead up to exam day.
Previously, the MPS was a straightforward calculation and was set at 70% of the highest-scoring candidate. Hence, if he/she got a raw score of 90%, the MPS would be set at a 63%, the raw score other candidates had to clear to pass the exam.
Today’s MPS calculation is more complex and is determined by a series of workshops the CFA Institute conducts, and is based on the Angoff model. Here is how it works:
- A large diverse group of CFA charter holders assesses the entire exam question by question and makes a determination on how a competent candidate would perform. This means that they evaluate whether a candidate who is good enough to pass the overall exam will get this question right.
- Once these estimations are completed, the charter holders again look at the actual performance of a candidate.
- All the information gathered from this exercise is then put before the CFA Institute Board of Governors along with the recommendations of the Angoff workshop. The last input is the most critical one. After considering all these factors, a final decision is taken on the MPS.
Hence, to pass, a candidate must better the score of what the CFI Institute determines to be that of a “just-competent” candidate.
Percentile Pass Rate CFA Level 1
Given the subjective nature of the scoring process, the 70% Minimum Passing Score set by the CFA Institute may mean that a passing score could effectively be 65% one year and 60% the next. Unfortunately, there’s no predictable way to determine the true raw-score needed to pass the CFA level 1 exam.
However, the 70% MPS threshold is a good rule of thumb to follow when preparing for the CFA exam. In essence, is you can reliably score above 70% on all of your practice questions and exams in your CFA review course, then you should have a decent shot at passing the level 1 exam. If you set the bar higher at 75% or 80% will further increase your chances of passing the exam.
Bottom Line
The pass rate for CFA exam Level 1 has traditionally hovered around 40-41%. However, the CFA Level 1 pass rates are simply broad averages and don’t tell the entire story.
At the end of the day, the only CFA level 1 pass rate that truly matters will be yours. Avoid the pitfalls of other level 1 candidates and take your exam prep seriously from Day 1.
