CFA Level 1 is where your CFA journey begins, and how you approach it sets the tone for the entire program. With pass rates hovering around 35-40%, the majority of candidates fail on their first attempt. But with the right strategy, you can be in the minority that passes.
I cleared all three CFA levels, and I have since mentored numerous candidates through Level 1. Here are the five steps that consistently lead to success.
Step 1: Build a Realistic Study Plan
The single biggest reason candidates fail Level 1 is not lack of intelligence. It is poor planning. They underestimate the volume of material or overestimate the time they have available.
Calculate Your Available Study Hours
The CFA Institute recommends approximately 300 hours of preparation for Level 1. In my experience, this is a reasonable estimate for candidates with some finance background. Candidates without a finance background should aim for 350-400 hours.
Work backward from your exam date:
- If you have 6 months, you need approximately 12-15 hours per week
- If you have 4 months, you need approximately 18-22 hours per week
- If you have 3 months, you need approximately 25-30 hours per week (very demanding)
Be honest with yourself. If you work full-time, have a family, and have other commitments, can you genuinely dedicate 15 hours per week to study? If not, register for a later exam window. For a more detailed study plan with week-by-week breakdowns, see our ultimate guide to preparing for CFA Level 1.
Structure Your Study Phases
Phase 1 — Content Coverage (Weeks 1 to approximately Week 16 in a 6-month plan)
Cover all topic areas systematically. I recommend this order:
- Quantitative Methods — Builds the mathematical foundation for other sections
- Economics — Macro and micro concepts that frame the broader curriculum
- Financial Reporting and Analysis — Start early because this is the heaviest and most unfamiliar topic for many candidates
- Corporate Finance — Builds on concepts from Quant and FRA
- Equity Investments — Core investment analysis topic
- Fixed Income — Bond valuation and analysis
- Derivatives — Options, futures, swaps fundamentals
- Alternative Investments — Relatively lighter section
- Portfolio Management — Ties concepts together
- Ethics — Study last so it is fresh for the exam, but allocate serious time
Phase 2 — Practice Problems (Weeks 17-22)
After covering the content, shift your focus to practice problems. This is where learning transforms into exam readiness.
Phase 3 — Review and Mock Exams (Weeks 23-26)
Take full-length mock exams, review weak areas, and build exam-day stamina.
Step 2: Master the High-Weight Topics
Not all CFA Level 1 topics carry equal weight. Strategic candidates allocate their time based on the exam weight and their existing knowledge gaps.
Topic Weights and Strategy
| Topic | Exam Weight | Priority |
|---|---|---|
| Ethical and Professional Standards | 15-20% | Must score high — this is a pass/fail differentiator |
| Financial Reporting and Analysis | 13-17% | Highest-weighted technical topic — invest heavily |
| Equity Investments | 10-12% | Core topic — solid understanding needed |
| Fixed Income | 10-12% | Core topic — especially for non-finance backgrounds |
| Quantitative Methods | 8-12% | Foundation topic — affects understanding of other areas |
| Economics | 8-12% | Broad topic — focus on key concepts, not memorization |
| Corporate Finance | 8-12% | Builds on Quant — relatively manageable |
| Portfolio Management | 5-8% | Conceptual overview at Level 1 — lower weight |
| Derivatives | 5-8% | Focused topic — learn the basics well |
| Alternative Investments | 5-8% | Lowest weight — cover efficiently |
The 80/20 rule applies: Ethics, Financial Reporting, Equity, and Fixed Income together account for approximately 50-60% of the exam. Master these four areas and you are well on your way to passing.
Ethics: Your Secret Weapon
I cannot overstate the importance of Ethics. The CFA Institute has publicly stated that Ethics performance can be the deciding factor for candidates near the passing threshold. A strong Ethics score can pull you over the line; a weak one can fail you even if your other topics are solid.
Approach Ethics differently from other topics — our dedicated guide on CFA Level 1 Ethics covers the nuances in detail:
- Read the Standards of Practice Handbook carefully, not just the summary
- Practice scenario-based questions extensively
- Focus on understanding the principles behind each standard, not just memorizing the rules
- Pay attention to the specific language the CFA Institute uses; words like “must,” “should,” and “recommend” have distinct meanings
Step 3: Practice Actively, Not Passively
There is a critical difference between studying and preparing for an exam. Studying is reading and understanding the material. Preparing is training yourself to answer exam questions correctly under time pressure.
The Practice Problem Approach
Do problems as you study, not just after. After completing each reading, immediately do the end-of-reading problems. This provides instant feedback on whether you understood the material.
Build an error log. Keep a spreadsheet or notebook where you record every question you get wrong. Include:
- The topic and specific concept
- Why you got it wrong (conceptual misunderstanding, calculation error, misread the question)
- The correct approach
Review this error log weekly. It is your personalized study guide showing exactly where your gaps are.
Use multiple question sources. The CFA Institute question bank, your study provider’s questions, and any additional practice materials you can access. Different question writers test concepts from different angles, which deepens your understanding.
Time yourself. CFA Level 1 gives you approximately 90 seconds per question. Practice answering at this pace. If you can answer questions in 60-75 seconds during practice, you will have comfortable buffer time during the actual exam.
Mock Exams: Your Readiness Barometer
Take at minimum three full-length mock exams under realistic conditions:
- First mock: Take it 4-6 weeks before the exam. This establishes your baseline and identifies major weak areas.
- Second mock: Take it 2-3 weeks before the exam. You should see improvement. If not, adjust your study plan aggressively.
- Third mock: Take it 1 week before the exam. This is your final readiness check and helps build exam-day stamina.
Target mock scores: Aim to consistently score above 65-70% on mock exams. The actual passing threshold is not publicly disclosed but is generally estimated around 65-72%. Scoring well above this threshold gives you a comfortable margin.
Step 4: Optimize Your Exam-Day Strategy
Many candidates lose points not because of lack of knowledge but because of poor exam-day execution.
Time Management
CFA Level 1 consists of 180 questions split across two sessions of 135 minutes each (90 questions per session). That is 90 seconds per question.
Strategy:
- First pass: Go through all questions, answering those you can do quickly and confidently. Flag questions that require more time.
- Second pass: Return to flagged questions and work through them carefully.
- Never spend more than 3 minutes on a single question. If you are stuck, make your best guess, flag it, and move on.
Answer Every Question
There is no negative marking on the CFA exam. Never leave a question blank. Even a random guess gives you a 33% chance of getting it right.
Read Questions Carefully
The CFA exam is known for questions that test precise understanding. Pay attention to:
- Whether the question asks for the “most likely” answer or the “least likely” answer
- Units (millions vs. billions, annual vs. monthly rates)
- Specific terms that change the meaning (nominal vs. real, before-tax vs. after-tax)
Manage Your Energy
The CFA exam is a marathon, not a sprint. Two sessions of 135 minutes each is mentally exhausting.
- Get a good night’s sleep before the exam (not the time for last-minute cramming)
- Eat a balanced meal before the exam
- During the break between sessions, eat a light snack and briefly review your Ethics notes
- Stay calm if you encounter difficult questions — everyone finds some questions hard
Step 5: Build Exam-Week Confidence
The final week before the exam is about consolidation, not new learning.
What to Do in the Final Week
Days 7-5: Take your final mock exam. Review all errors thoroughly. Revisit your formula sheet.
Days 4-3: Light review of weak areas identified from mock exams. Focus on Ethics, especially scenario-based questions.
Days 2-1: Review your formula sheet one more time. Skim through your error log for common mistakes to avoid. Do a few easy practice problems to build confidence.
Exam Day Eve: Review your exam logistics (venue, timing, what to bring). Set multiple alarms. Lay out everything you need. Go to sleep at a reasonable hour.
What NOT to Do in the Final Week
- Do not try to learn new topics. If you do not know it by now, spending a few hours will not make a meaningful difference.
- Do not take mock exams in the final 2-3 days. A poor score will hurt your confidence without giving you time to address the gaps.
- Do not change your study routine drastically. Consistency is your friend.
- Do not discuss difficulty predictions with other candidates. It creates unnecessary anxiety.
Bonus: Common Level 1 Mistakes to Avoid
Based on my mentoring experience, here are the most common mistakes Level 1 candidates make:
Starting too late. Four months of preparation feels like plenty until you realize how much material there is. Start early.
Ignoring Financial Reporting. Many candidates, especially those from non-accounting backgrounds, avoid FRA because it is unfamiliar. This is the highest-weighted technical section. You cannot afford to be weak here.
Over-relying on video lectures. Watching videos feels productive but is passive learning. You need to actively solve problems.
Neglecting Ethics. Candidates often treat Ethics as “common sense” and do not study it seriously. The CFA’s approach to ethics has specific nuances that require dedicated study.
Not using the financial calculator efficiently. Fumbling with your calculator wastes precious seconds on every question. Practice until calculator operations are second nature.
Final Thoughts
CFA Level 1 is challenging but very beatable with the right approach. Build a realistic plan, focus on high-weight topics, practice actively, optimize your exam strategy, and manage your confidence in the final week.
Remember, thousands of candidates pass Level 1 every exam window. There is no reason you cannot be one of them. Pair these five steps with the right mindset — our article on the mantra for clearing the CFA exam dives deeper into the discipline and composure it takes to succeed.
If you want personalized guidance on your Level 1 preparation, book a free mentorship session. I will help you build a study plan tailored to your background, schedule, and goals.