Market: When the toughest exam in the financial world no longer makes you dream…

(BFM Bourse) – CFA certification, a gem for finance professionals, is no longer the dream it used to be. For the third year in a row, the number of candidates for this prestigious exam has fallen to pre-Covid-19 levels. Financial Times.

The toughest exam on the planet of finance is no longer as desirable as it was in years past. Pandemic-related disruptions and pass rates below 50% are pushing applicants away from the CFA or Chartered Financial Analyst exam, the publication reports. Financial Times.

Founded 75 years ago in the US city of Charlottesville, Virginia, the Precious Sesame Origins Association has 190,000 members worldwide. Until the early 1980s, only candidates from North America were eligible to take the CFA, then this exam was extended to the rest of the world, which made it increasingly popular. The reputation of being the hardest exam in the world is far from being usurped. To receive the precious sesame, the candidate must invest for many years before qualifying for the full course.

The program exclusively in English consists of three parts. The first, or CFA I level, tests candidates’ ability to master basic financial instruments. The Level II program, focused on the valuation of structured and complex assets, includes the study of more complex instruments. This level is considered the most difficult of the three exams to pass. Level III focuses more on portfolio management techniques and requires several years of experience in finance, unlike Level I, which is also open to students. Receiving a CFA certification, which requires around 1,000 hours of training, has long been considered essential for many careers in finance. But the situation is changing. The high workload, low pass rate and disruptions associated with the pandemic have led more potential students to question whether this certification is that important to their career, adds Financial Times.

Sharp drop in demand

“Demand is falling off a cliff. Today, people are put off by long hours of studying for low-pass exams that are not required by employers until they are hired and then are no longer relevant,” said Margaret Franklin, director of the CFA Institute. “The number of candidates is less than before due to the pandemic. The situation is complicated because students want to be sure that they can pass the exam,” she said.

In the year ending August 2019, approximately 160,900 candidates from around the world took the Level 1 exams, the first of three stages leading to full qualification for the CFA. The following year, that figure dropped to 73,688 when the pandemic forced the institute to cancel written exams scheduled for June 2020. In the year ending August 2021, 125,775 students took the exams after the institute replaced online written tests. exams since February. 2021. Last year, the institute was heavily criticized by applicants after cutting a fifth of the staff and canceling exams due to the pandemic. “The pandemic has affected the ability of many candidates to prepare. The learning conditions were not optimal. Interruptions during peak periods before exams affected exam success,” said Margaret Franklin. Financial Times.

In the current fiscal year, just over 93,000 students have taken Level 1 exams, but Margaret Franklin said the Chinese lockdown has resulted in a large number of candidates canceling or postponing tests scheduled for May. Since the introduction of online testing last year, the pass rate for Level 1 exams has dropped significantly to around 28%, compared to an average pass rate of 41% over the past decade. Only 22% of students passed the July exams, the lowest rate since the introduction of the CFA exam in 1963.

She added that she expects the number of applicants to decrease in the coming months due to the situation in China, where demand was high before the pandemic. “Beijing’s Covid policy means we expect more disruptions in China over the next six to nine months, but India is already back to pre-pandemic levels,” said Margaret Franklin.

Sabrina Sadgi – © 2022 BFM Bourse