Go Preppy?

I’ve been getting lots of emails & comments concerning the use of third-party (non CFA Institute) preparation materials for the exams. So I thought I should do an article on this, but… not having actually used any third-party materials so far it’s obviously difficult for me to do more than just speculate.

But I won’t let that stop me…

In ideal CFA world, you just learn what’s in the study guides provided by the Institute and you’re good to go for the exam. In the real world (or so I’m told) almost everyone uses additional materials like those provided by Schweser and/or Stalla as most consider them an important key to passing.

There are a variety of reasons as to why. I’ll pick perhaps what I think are the top three. Comments from the more experienced readers are always encouraged!

#1: To save time
So here I am 7 months before the exam. I’ve been studying for about 2 months and I’m still in Vol. 1 (of six volumes). I’m nearing the home stretch now (pg. 425 of 525). I think…

Wouldn’t it be nice if you could get a sort of Cliff’s Notes for the CFA exams – where someone has taken the approximately 3500 pages of each level’s curriculum and boiled it down into something you can work through a little faster?

I think this blog entry from Schweser sums it up quite well. The CFA Institute provides essentially textbooks containing the core theory of the material, not summarized study notes like the third-parties.

Schweser doesn’t claim that their study notes are a substitute for the CFAI curriculum, rather a complement. But I would guess that if you’ve already learned the material once at the deeper “textbook” level – maybe from your college courses or perhaps from a first (long) pass through the CFAI curriculum – and what you mostly need is to just review and refresh, these third-party study notes may be a much faster way to prepare.

Preppy CFA
CFA Prep

#2: To supplement difficult material
This seems a little paradoxical given what I wrote above. If you’re struggling with a particular topic, wouldn’t it be best to go back to the long, detailed explanations (i.e. the CFA textbooks) to re-learn the theory?

Maybe, but sometimes it can be helpful to just get the same material explained in a different way. And lest you think that these third-party companies offer only study notes, rest assured they offer much more if you have the $$$. We’re talking online video webinars where you can ask live questions of instructors (who also have office hours).

#3: To get more practice problems
Similar to my engineering classes, it seems that knowledge of the theory is not enough by itself to pass the exams. One also needs to be able to work the problems at bullet-train speed! Level 1 is 240 questions over 6 hours – so only 1.5 minutes per question.

I used to have a big problem with tests given in this fashion as it always seemed the test-givers were using time to artificially lower the number of passes. But I understand that working efficiently is also an important skill in the workplace…

In these situations I’ve found that the more practice problems you can get the better. And the ones from third-party sources often include questions from prior CFA exams!

Here’s what worked for me in college. Take your large set of sample problems, park yourself in front of a dry-erase board, and work, re-work, and re-re-work the problems in random order until they’re so ingrained in the subconscious that you could still get the correct answers quickly after splitting a bottle of wine with Schmoopie over dinner.

In Conclusion…
My lack of a background in finance is leading me to focus only on the CFA textbook material for now. My priority from day one has been to learn the theory first (so I can actually apply it to my personal investing), and pass the exams second.

But I do definitely want to pass! 🙂 So I’ll probably defect to third-party once I make one complete pass through the textbook curriculum…

14 thoughts on “Go Preppy?”

  1. The best supplementary material you can get are the practice exams with answers. If you like learning in a class environment, there are of course DVDs, and I’ve used the audio cds although its hard to retain the info while driving/working out.

    The key to passing is undoubtedly doing as many practice questions as possible. Scream through the volumes as fast as possible (since there is plenty of time until June – unless your taking L1 in Dec). Take the rest of the time to do practice questions and practice exams, reviewing what you’re not scoring well on as you go.

    Also, you can check out the Analyst Forum for discussions on various topics that others may be struggling on, and of course post questions of your own.

    Best of luck! 🙂

  2. foq, thanks for directing me to the Analyst Forum, a post on their led me to a great site for CFA canidates to begin networking: Doostang.com

    From the website:

    Doostang is an online career community that connects people through personal relationships and affiliations. Our members use Doostang to share relevant career opportunities and to interact with one another.

    They have a CFA group and many other professional social groups you will find helpful.

    If anyone wants an invite shoot me your email adress

    Lumilog, I think you will find the site usefull. Dont worry, these new forums and social networks being posted on your site do not mean we are any less eagerly awaiting the next Lumilog blog in his quest to pass the CFA exam. It was your blog that inspired me to be more gregarious in the first place (plus i learned the word gregarious). So keep em coming.

  3. On the Shweser notes: I cant say enough about how helpful they are both with exam preparation and understanding concepts. With the new CFA volumes, they may not be as necessary as they were when you were faced with 10 text books (just the travel ease was worth the purchase) but I still say they are a must.

  4. Thanks guys – I will have to check out doonstang. BTW my local CFA chapter that sometimes sends out invitation to brown bag lunch talks has now also begun sending the occasional job opening.

    Thanks for the kind words Mick. I’m having a bit of a challenge balancing work / study / family at the moment so I haven’t been as active with the comments & posts – but plan to jump back in soon. I REALLY want to finally finish Vol. 1 of the study guides – will seem like a major milestone.

    Speaking of jobs & forums, I came across a recent post re: subprime fallout in one finance forum from a supposed current investment banking employee saying “the layoffs are beginning. Those of us who haven’t finished earning our CFA designations yet are under pressure to do so quickly in order to keep our jobs…”

    One person’s perspective but motivation to stay the course. 🙂


  5. I’m currently persuading my employer to pay for the CFA and pay for training by BPP (UK training provider). They offer a 10 day course, split into learning and revision. Not sure what the outcome is yet. Only trouble – I have no degree, but I do have wealth management experience and the IMC plus advanced financial planning quals. Is this going to be enough to be accepted? Appreciate your thoughts.

  6. Hi Craig,

    According to this link it looks like work experience can count in place of a degree. Might want to just shoot the CFAI an email asking b/c all work experience is not judged equally.

    Good Luck!

  7. Hi! Shweser notes is very well written and I am amazed at how well they did in conveying concepts. Moreover, it has many problems with each concept, which serve as excellent concept checkers.

    I prefer to read textbook first in important subjects such as financial statement analysis and use Shweser as reminder. But in less significant subject such as corporate finance and derivative instruments, Shweser is enough. Economics needs some extra care: it does need someone to have a basic knowledge of economics at least at a same level of a introductory undergraduate course, so I picked up Samuelson’s economics (chinese translation actually, it seems universally popular) and skimmed through it. After that, the textbook reads like a breeze.

  8. Hi Mick (or anyone who is already on Doonstang.com),
    I would love to get an invitation to Doonstang.com. Could you please provide me your email address so I can send you mine? Thank you! Good luck to all!

  9. Thanks for this post Lumilog, and to the person that also posted the video links. I’d be also interested in knowing if anyone’s signed up for any of the online study classes. I love the ‘break up’ of materials in online classes and find it easier to study when things are taken and broken down online. I also noticed online classes from “India” (500.00$). Has anyone taken these? I would love to sign up for a cheap online CFA class just to get into it a little more!

  10. Hi Mick,

    I am in the UK now and pursuing my CFA level 1. Will be giving exams in Dec.

    Please could you invite me to the Doostang forum. My email id is r.sathish1 at gmail dot com.

    Many thanks.

  11. I found analystexams.com useful. I’m sure the polls aren’t scientific, but it does give a quick overview of how other candidates and charterholders view Stalla and Schweser.

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