Ah, the coveted Chartered Financial Analyst (CFA) exam.
An Everest for finance professionals, but even the most seasoned climbers face gusts of unpredictable winds on their ascent, and for many CFA candidates, the recent wind has been the ripple effect of the Covid-19 pandemic.
The most recent data from the CFA Institute makes for an interesting, albeit somber read.
The Level I pass rate for August has dipped to 37%, a notch below the 39% in May and 38% in February.
While these numbers might seem like marginal drops, one must remember that they stand in stark contrast to the decade-long average of 41%. Why such a difference?
Rob Langrick of the CFA Institute offers some wisdom, attributing the performance, in part, to candidates’ decisions to defer their exams. Historical data suggests that the stalwarts who stuck to their schedules had an edge over the postponers.
Langrick’s observation, that retention and currency of material tend to wane with deferrals, resonates deeply.
Consistency, it seems, is not just a key to investing, but also to acing the CFA.
Now, more than 23,000 candidates took the plunge in August, spread across 467 centers globally.
The metamorphosis from the traditional paper-based format to a digital one, brought about by the pandemic, has possibly also influenced these numbers.
But the central question here for our community at Investing Pioneers is: what’s the takeaway for both prospective CFA candidates and the financial world at large?
Firstly, in a constantly evolving global environment, agility is paramount.
Be it in exam preparations or investment strategies, adaptability is the name of the game. Holding onto traditional methods might feel safe, but as the shift from paper to digital exams has shown, change is inevitable.
Secondly, consistency pays dividends (pun intended).
Whether you’re preparing for an exam or curating a portfolio, stay the course.
The allure of deferral or divestment can be strong, especially during turbulent times, but historically, those who remain disciplined often reap greater rewards.
Lastly, and perhaps most importantly, it’s essential to acknowledge external factors and their impact.
The CFA exam’s dipping pass rates are not just numbers; they reflect real challenges faced by candidates.
A holistic view, one that factors in externalities, is crucial in both exam strategy and investment decision-making.
In the grand scheme, while these numbers serve as a reminder of the pandemic’s far-reaching impact, they also underscore the value of resilience, adaptability, and consistency.
So, to all the future CFAs and the financial mavens out there, remember: in the midst of challenges, lies opportunity.
Seize it, stay the course, and you might just find yourself at the top of your Investing Pioneers game.
Peter Burke
