Required Steps Before Taking a CFA Level 2 Exam

CFA exams can be challenging. While a certified CFA Level 1 is regarded as a highly-skilled and educated individual, Level 2 is one step above. The required steps before taking a CFA Level 2 exam are time-consuming but rewarding, especially for the ones that have not enrolled for Level 1 yet. The prerequisites are not that many but all of them are mandatory.

Do you need CFA Level 1 prior to Level 2?

The simple answer is yes. You cannot take the CFA Level 2 exam without first passing Level 1. The reason being is that the study material for CFA Level 2 presents fewer theoretical concepts and relies heavily on what is being taught in the Level 1 study material. Some institutions do not state clearly this requirement but it is mandatory.

Studies and experience

The required steps before taking a CFA Level 2 exam are the same as for Level 1. You need to first attend a bachelor’s degree form of study. Before registering for the CFA exam, you need to have completed and obtained your bachelor’s degree.

If you do not have a bachelor’s degree, you can be accepted for a CFA Level 2 exam if you have 4 years of work experience. Some institutions require that 4 years of experience to be investment related while others do not.

Alternatively, you can have a combination of work experience and a form of higher education that is 4 years in total. Because of these requirements, the minimum age of a person taking a CFA exam cannot be lower than 21.

Other requirements to help you pass the exam

Individual study plays an important role. CFA exams can be challenging through the complexity of the case studies that you will encounter in the form of multiple selection questions. Without a rigorous individual study routine, you may have difficulties understanding and mastering certain terms, analysis methodologies, and financial terms.

The problem comes when you do not have a degree in economics and no work experience in the financial field or investments. Many concepts that are presented in the CFA study materials will sound unfamiliar. Some of them may not even be explained at all as the assumption would be that the student has a form of basic knowledge about investments and financial instruments. It may not be a requirement but it is important to study economics, investments, and financial analysis tools ahead of enrolling for a CFA program.

To summarize everything, here are the required steps before taking a CFA Level 2 exam:

– You need to pass the CFA Level 1 exam

– Be 21 years of age

– Have some experience in the finance field or have education in economics and finance

– Dedicate a good share of personal time to study the CFA learning materials

– Take mock exams to evaluate your readiness level

If you manage to cover the above requirements, you will obtain your CFA Level 2 certification. What is important is to not underestimate the exam. The questions are challenging and the use cases described in the questions are complex. Around 44% of all students that enroll for the Level 2 exam pass it. The percentage of students that get their certification is not that high but it should not be discouraging as it is attainable.