CFA Enrollment Cratered During the Pandemic, It Hasn’t Rebounded

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It’s nicknamed the “hardest exam in finance” but a pandemic-induced drop in students has some wondering if the famous chartered financial analyst (CFA) test was ever worth the trouble to begin with.

According to new figures, the program is failing to reach pre-pandemic enrollment levels for the third year in a row. A good question might be how do you spell relevant?

Passing Grade on a Failing Test

Qualifying as a CFA has been a career-defining achievement for many financial professionals since the test was introduced in 1963. You sign up, study for an average of 1,000 hours, and then take a grueling test that only 41% of students passed in the last decade. Passing the exam — administered by the global nonprofit CFA Institute — meant winning a certificate that some, though certainly nearly all, Wall Street firms prized among job applicants.

But the CFA was never a licensure exam. Someone could still take the much easier Series 7 test — administered by FINRA — and get a job in investment banking or trading. So when the pandemic crushed the number of people signing up for the CFA course, and the numbers failed to rebound, concerns about the program’s relevancy grew louder:

  • In the year to August 2019, 161,000 candidates globally took the first of the three CFA qualification exams, before falling to 74,000 in 2020 and 126,000 in 2021. Only 93,000 students have taken the level 1 exams in the 2022 fiscal year, which ends in three months, something Margaret Franklin, head of the CFA Institute, blames on continuing lockdowns in China.
  • “Demand is falling off a cliff,” an anonymous CFA staff member told the Financial Times. “People today are turned off by studying for long hours for an exam with a low pass rate that is only valued by employers when they apply for a job, and is irrelevant thereafter.” Since the introduction of online tests last year, the pass rate on level 1 exams has fallen to an abysmal 28%.

Take It From Someone Who Knows: “I realized when I was studying for the exams that I wasn’t really learning the material; I was just learning how to pass a test,” wrote Mauldin Economics investment strategist Jared Dillian, in a Bloomberg opinion column last year. “I honestly don’t remember a single thing I learned from the CFA program.”