Demand ‘falls off a cliff’ for CFA financial analyst qualification

A professional qualification known as the ‘toughest exam in finance’ is falling into disuse, with candidates for the Chartered Financial Analyst program falling well below pre-coronavirus pandemic levels for a third consecutive year.

The CFA qualification, which requires approximately 1,000 hours of study, has long been considered essential for many careers in finance. But Margaret Franklin, director of the CFA Institute, which issues the qualification, said the pandemic was lowering demand.

“The number of applicants is lower than it was, due to the pandemic. It has been more difficult because the students want to be sure that they will be able to pass the exams,” she said.

The institute came under heavy criticism from staff and students last year after it cut its staff by a fifth and canceled exams in response to the pandemic.

In the year to August 2019, approximately 160,900 candidates worldwide took the Level 1 exams, the first of three stages leading to a full CFA qualification. This number fell to just 73,688 the following year, when the pandemic forced the institute to scrap the written exams scheduled for June 2020. In the year to August 2021, 125,775 students took the exams after the institute moved from written tests to online tests starting in February 2021.

In the current fiscal year, just over 93,000 students took Level 1 exams, but Franklin said lockdowns in China led to high numbers of candidates canceling or postponing tests scheduled for May. .

A senior member of CFA Institute staff said the high workload, low pass rate and pandemic-related disruptions had caused more prospective students to question whether the qualification was relevant to their careers.

“Demand is falling off a cliff. Today, people are discouraged by studying for long hours for an exam with a low pass rate which is only valued by employers when applying for a job, and is no longer relevant afterwards” , the staffer said. “The CFA Institute has not followed current learning practices,” they added. “Gen Z wants. . . to acquire knowledge and skills to do their current job and take less structured courses. »

Since the introduction of online testing last year, there has been a marked drop in the pass rate to around 28% for Level 1 exams, from an average pass rate of 41% over the past decade. . Only 22% of students passed the exams set in July, the lowest since CFA testing began in 1963.

Franklin said: “The pandemic has affected many candidates’ ability to prepare. The study conditions were not optimal. Disruptions in difficult times around exams have affected pass rates. »

She added that she expected the number of applicants to be lower in the coming months due to the situation in China, where demand was high before the pandemic.

“Beijing’s zero Covid policy means we expect more disruption over the next six to nine months in China, but India is already back to pre-pandemic levels,” Franklin said.