What do the CFA® exam changes mean for you? Making sense of the latest announcements regarding changes to the CFA exams.

by Dianne Ramdeen

Some important announcements were made by CFA Institute a few days ago regarding changes to the exams.  Now that everyone has had their rant, it’s time for some clarity. There are some things in life you challenge, and there are some things you accept.  The recent announcement is one of those that fall into the latter category.

Highlights of changes

• Level I will transition to computer-based testing (CBT).
• Levels II and III (June 2019 sitting) will contain more item sets than the previous format.

Level I changes

The Level I exam will transition to CBT with four sittings each year, however, the exact logistics have not been finalised.  But don’t panic just yet as this change will not be in effect until 2021.

Students should view the change as a positive one offering more sittings and therefore more flexibility. Will the exams become more difficult? Let’s just say the probability of this happening lies in the extreme left tail of a normal distribution. The content of the curriculum will most certainly not change drastically apart from annual updates as is the norm. Further, there has been no indication of a change in format so questions will still have a stem and three options from which to choose. CFA Institute has said that they will give sufficient notice if a change of format is decided.

Many other professional exams are already assessed via CBT e.g. IMC, ACCA, CISI and CIoBS.  So, this really isn’t new territory and should not be feared by students.

Prometric have been selected to implement and deliver the exams.

Level II changes

Previous format:

20 item sets (10 in the morning paper and 10 in the afternoon paper) containing 6 questions each giving a total of 120 questions overall.

New format for June 2019:

21 item sets with a total of 120 questions overall but split as follows:

• 18 item sets containing 6 questions each and,
• 3 item sets containing 4 questions each.

What has not been articulated is how the questions will be split between the morning and afternoon papers.

Since both am and pm exams will still be three hours long (as nothing has been said about this) and therefore need to contain the same number of questions i.e. 60 in each paper, the only logical conclusion is that one paper will contain 10 items sets with 6 questions, and the other will contain 8 item sets with 6 questions each plus the 3 shorter item sets with 4 questions each. Not too bad when put into context as it means only one additional item set in one of the two papers. CFA Institute has also made it abundantly clear that the shorter item sets will contain less information and should take proportionately less time to attempt – i.e. 12 minutes instead of 18.

Level III (afternoon paper only)

Previous format:

10 item sets containing 6 questions each giving a total of 60 questions.

New format for June 2019 (afternoon paper):

11 item sets with a total of 60 questions overall but split as follows:

• 8 item sets containing 6 questions each and,
• 3 item sets containing 4 questions each.

The verdict for Levels II and III

The change is not as drastic as it may have first appeared. As I said before, it boils down to one additional item set. The time allocated has not changed, the total number of questions has not changed, the mark per question has not changed and the curriculum is still valid. You will still be able to use your existing prep materials.  Just ensure that you develop good exam technique when it comes to item sets, and of course make sure you don’t panic on the day!

Item set exam strategy

Item sets are constructed such that you only need some of the information when answering a question.  In addition, the order of the information is usually the same order in which the questions are presented.  As a very general and simple example – if an item set has 4 questions, the body or scenario would usually have 5 paragraphs or identifiable sets of data to assimilate.  The first paragraph would be introductory, and each subsequent paragraph would relate to the questions in order of appearance. As such, never attempt to read the entire item set before looking at the questions.  Blindly reading the scenario is a complete waste of time if you don’t know what the questions are asking.  What may be more useful is skimming the questions and the scenario to get a flavour of the story.

In tackling item sets:

1. Start by reading the introductory paragraph and then the first question.
2. Once you have identified the requirements of the first question, re-read the introductory paragraph and the following paragraph or set of data to select relevant information. Read further if you think you need more information.
3. Process the information, select the correct answer and move on to the next question.
4. Read the next paragraph of the scenario and pick out relevant information….

Hopefully you get the point. If you do this right, you will have simultaneously read the scenario and answered the questions.

I hope this has allayed some of the fears expressed by students over the past few days.  The last thing you need as a student is a sudden change before an exam.  What you need even less, is to feel panicked and anxious. So, don’t panic, embrace the change and go into the exam with confidence!