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bos_IT_guy

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I was approached by one of my employees today that was considering entering the CFA program. She was wondering about the total time commitment. I said it would be 300, 400 and 500 hours for L1, L2 and L3 respectively. I also told her to expect to fail at least once. I thnk that was a fair assessment. What do you think?
 
I disagree with you to expect to fail at least once. Tell her to put 400, 500 and 600 hours for L1, L2 and L3 and she will do fine if she has an average IQ.
 
I think the percentage of people that can go 3 for 3 (especially those married with kids) is probably pretty low. I also mentioned that to her so she wouldn’t be devastated, and give up, if she failed.
 
I am assuming that you are posting this here because she got a little disturbed by you suggesting that she would likely fail at least once, so you are wanting some feedback from us to make you feel a bit better that you told her this. If this is the case, I can’t say that I agree or would have put it in the same context. Even if you feel that it is statistically likely that she will bomb at least one level, who really wants to hear that? Either tell her it is a great idea and support it, or come up with a nice way to not support it.
I really have to say, I have a natural tissue rejection for rationales that cubbyhole others based on “statistics” or “likelihoods.” Statistics that are quoted like this are typically done so with a “glass half empty” bias instead of a “glass half full” perspective, i.e., like anybody who cites the “50% of marriages end up in divorce” data typically uses this stat to poo-poo the idea of marriage; they don’t usually say it to focus on the 50% success rate. If the glass half empty people made all of the decisions in this world, then economies, technologies, culture, etc. would absolutely stagnate and nobody would have the balls to move forward, paralyzed in life by the inability to conquer the probabalistic haze that lay before them.
 
As much as people don’t like the idea of failure, it’s pretty common in CFA testing. I’m on the conservative side as well so I might have said something along the same lines.
It sounds like she has a lot more research to do before actually attempting this, so your ‘expectation’ does not seem completely out of line.
 
I think it all goes back to “how you say it”… versus the “what”. Given that the average person who is serious about the exam, is probably at least somewhat versed in statistics and wouldn’t have much difficulty calculating the chances of passing all 3 on the same try.
Looking at just PURE numbers, and being a rational person and occasional poker player, I’d look at it, as numbers stacked against me and “fold”. I think what’s missing from your story is her character. I.e I took it as a personal challange above anything, without unrealistic expectations about the benefits. Plus I was geniuinely interested in a good chunk of the material covered. I think those 2 factors outweighed the statistics in my case, and perhaps others on this forum had a similar outlook.
My 2 cents..
 
I think very few people take it seriously from the beginning and this is why so many fail. It would be interesting to have real data about pass rates vs number of hours studied although it is probably impossible to get unbiased data.
 
I think what you said is reasonable. Isn’t the official average time 4 years? 300 solid hours studying on average is probably enough.
 
bos_IT_guy wrote:
I think the percentage of people that can go 3 for 3 (especially those married with kids) is probably pretty low. I also mentioned that to her so she wouldn’t be devastated, and give up, if she failed.
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There are people that never failed an exam in their life because they are super disciplined, organized and motivated.
 
She is smart, very. She is also very driven to succeed. However, smart and dedicated people fail at least one of these exams ALL the time. That was my point to her. I actually hope she enters the program and, in the end, I suggested that she at least take Level 1.
I know I will be asked this again by other employees. I do say success is based on prep and background, but I don’t want to say “your smart and dedicated - if you put the time in you will go 3 for 3”.
 
People are overestimating the difficulty of the exams. It ain’t rocket science. If you can put in the hours, you will pass. Start early and overstudy.
 
bos_IT_guy wrote:
She is smart, very. She is also very driven to succeed. However, smart and dedicated people fail at least one of these exams ALL the time. That was my point to her. I actually hope she enters the program and, in the end, I suggested that she at least take Level 1.
I know I will be asked this again by other employees. I do say success is based on prep and background, but I don’t want to say “your smart and dedicated - if you put the time in you will go 3 for 3”.
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In retrospect I can tell you that if I fail level 1 (I attended in December), it was due to proscratination and trying to do to many things at once at the same time. If you are smart and put the hours, I do not think you could have failed December 2013.
I have many acquaintances who attended the same exam, they all studied less than me. This means in our group of 7 people, I was the only one who studied for the exam and I did not even study anything close to the # of hours required. I am sure than many other people studied more than me, but if you take my sample, you will understand that many people do NOT put the amount of hours required. This is probably the main reason for failure. Now, nobody knows the real average # of hours the candidates studied and its distribution but this is my personal observation.
Be warned that if you have no previous financial experience at all, you should study more to compensate. However, I think what you told her is fine as it puts less pressure on her and still convey the message that you should work hard. Maybe you can mention that it is hard to commit the time since it is self studying, this would make sure she understands the main difficulty of the CFA certification.
 
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