The Chartered Financial Analyst (CFA) exam is widely regarded as one of the most difficult and competitive exams in the finance world. As a rigorous 3-level program, the CFA exam requires an immense amount of preparation, discipline, and dedication.

One of the key factors that make the CFA exams so challenging is the pass rate, which has historically been quite low, especially for Level I.

In this blog post, we'll explore the CFA pass rates and compare them with other financial certification exams like the Financial Risk Manager (FRM), Certified Financial Planner (CFP), Certified Public Accountant (CPA), and even the GMAT. By the end, you'll have a better understanding of how competitive the CFA exam is and how it stacks up against other professional exams in finance.

What Are the CFA Pass Rates?

The CFA exams are divided into three levels, each becoming progressively more challenging:

Level I: Focuses on basic knowledge of finance and investment tools. Level II: Emphasizes asset valuation, financial analysis, and complex investment strategies. Level III: Focuses on portfolio management, asset allocation, and wealth planning.

The pass rates for these levels have historically been low, reflecting the challenging nature of the exam.

Here are the average CFA pass rates over the last few years:

CFA Exam Level	2024 Pass Rate	2023 Pass Rate	2022 Pass Rate	2021 Pass Rate
Level I	44%	37%	36%	25% (record low)
Level II	48%	44%	40%	29%
Level III	49%	48%	49%	42%

As you can see, the pass rates have fluctuated, with a sharp decline in 2021, particularly for Level I, where the pass rate hit a historic low of 25%.

While rates have rebounded slightly in recent years, they remain competitive and challenging, making the CFA exam one of the toughest in finance.

CFA vs Other Financial Certifications: How Does the CFA Exam Compare?

To understand just how competitive the CFA exam is, let’s compare its pass rates with other well-known financial certifications and exams.

1. CFA vs FRM

The FRM (Financial Risk Manager) certification is a highly respected credential for risk management professionals. Like the CFA, the FRM exam is split into two parts, and its pass rates offer a glimpse into its difficulty:

FRM Pass Rates

• FRM Part I: Around 45-50%
• FRM Part II: Around 55-60%

FRM Part II: Around 55-60% While FRM pass rates are higher than CFA pass rates, they still reflect the rigor and practice required to pass. The FRM exam, though challenging, tends to have slightly higher pass rates due to its narrower focus on risk management compared to the broader financial curriculum of the CFA.

2. CFA vs CFP

The Certified Financial Planner exam is tailored for financial advisors and planners, covering financial planning, taxes, insurance, estate planning, and retirement planning. Here are the typical pass rates for the CFP exam:

CFP Pass Rate: 62-65%

The CFP exam is easier to pass than the CFA, with higher pass rates. While the CFP exam is rigorous in its own right, it doesn’t delve as deeply into complex financial concepts such as equity analysis and portfolio management.

3. CFA vs CPA

The CPA (Certified Public Accountant) exam is often compared to the CFA because both are seen as standards in their respective fields. The CPA exam consists of four sections, and candidates must pass all four within 18 months. Here are the average pass rates for the CPA exam:

CPA Pass Rate (Overall): 50-55%

While the CPA exam is also challenging, its pass rates tend to be higher than the CFA, likely because it tests a broader set of accounting and auditing principles, which may be more familiar to candidates with accounting backgrounds.

4. CFA vs GMAT

The GMAT (Graduate Management Admission Test) is commonly taken by candidates seeking admission to top business schools worldwide. Unlike the CFA, which is a certification for finance professionals, the GMAT is an entrance exam for MBA programs. Here’s how the pass rates compare:

GMAT Average Score & Percentile

• GMAT Average Score: Around 565-600 (out of 800)
• GMAT 90th Percentile: Around 700+

While the GMAT does not have a direct pass/fail system like the CFA, scoring above 700 places candidates in the top 10% of test takers. The difficulty level varies depending on a candidate’s target school, but the structured nature of the GMAT makes it relatively easier to prepare for compared to the CFA's vast curriculum.

Why Are CFA Pass Rates So Low?

The low pass rates for the CFA exams can be attributed to several factors:

1. Breadth of Topics

The CFA curriculum covers a wide range of finance subjects, including economics, portfolio management, financial analysis, and ethics. Candidates need a strong grasp of all areas to pass.

2. Depth of Knowledge

Each level of the CFA exam goes deeper into financial concepts. For example, Level II focuses heavily on asset valuation and requires a deep understanding of financial reporting, while Level III emphasizes advanced portfolio management.

3. Time Commitment

According to the CFA Institute, candidates typically spend over 300 hours preparing for each level. Balancing this commitment with work or other responsibilities can be challenging, contributing to lower pass rates.

4. Strict Grading

The CFA Institute uses a rigorous grading process. To pass, candidates must achieve a score above the Minimum Passing Score (MPS), which varies depending on the difficulty of the exam.

How to Prepare for the CFA Exam

Given the competitive nature of the CFA exam and its low pass rates, here are a few tips to help you succeed:

1. Start Early

The CFA exam requires significant preparation time. Aim to start studying at least 6 months before the exam.

2. Use Multiple Study Resources

Don’t rely on one study method. Use the CFA curriculum, practice questions, mock exams, and supplementary study materials to gain a thorough understanding of the topics.

3. Take Practice Exams

Simulate the actual exam experience by taking practice exams under timed conditions. This will help you manage your time effectively on exam day.

4. Join Study Groups

Engage with other candidates and join study groups to share insights, resources, and motivation.

For more information on how to prepare for the CFA exams, check out our blog

Conclusion: CFA vs Other Exams

When compared to other financial certifications like FRM, CFP, CPA, and even GMAT, the CFA exam stands out for its difficulty and competitiveness, reflected in its lower pass rates. However, this also makes it a prestigious and highly respected qualification in the finance world. The rigorous nature of the exam and the breadth of topics covered means that passing the CFA demonstrates an exceptional level of knowledge and commitment.

If you’re planning to take the CFA exam, understanding its difficulty and the preparation required is the first step to success. While the CFA pass rates are lower than some other exams, with the right preparation strategy, you can join the ranks of successful CFA charterholders and boost your finance career to new heights.

Feel free to explore more of our blogs on Charterbuddyy to get detailed tips on CFA exam preparation and insights into other finance-related certifications!