How ICEF can help one study for the international CFA Exam

Konstantin Fedorov enrolled in ICEF Master’s Programme to gain a deeper insight into Corporate Finance and try himself in a new realm of activity. During his studies, Konstantin passed CFA Level 1 exam as a step towards the internationally recognized CFA credential. In this interview, he gives tips on how to prepare for the CFA exam, one of the toughest financial exams designed to help professionals acquire advanced financial analysis and investment management skills, and how ICEF can be helpful.

Why ICEF Master’s Programme is a good fit?

I earned a specialist degree in Engineering Economics from Moscow Polytechnical University (formerly known as MAMI). One half of the course units on its programme deals with Economics and the other half with Engineering.

My main motive of enrolling in ICEF Master’s Programme was career change. I was a professional auditor and I always wanted to get into something more exciting to deal purely with corporate finance. Besides, I wanted to expand my knowledge of quantitate methods. Before I enrolled, I served for almost two years with Deloitte and completed a traineeship at Ernst & Young past summer.

I can say that ICEF Master’s Programme has totally lived up to my expectations. With an expertly selected array of obligatory and optional courses, ICEF offers its students freedom to focus on the domains where they see themselves growing professionally.

CFA exam: why take it and how to prepare?

One of the reasons why I decided to sit the CFA exam is that its study programme offers extra knowledge of finance-related topics and provides general knowledge of finance as an industry. Also, I see CFA credential as a great asset for my future job.

The Chartered Financial Analyst is a professional credential offered internationally by the CFA Institute to investment and financial professionals. To become a CFA charterholder, candidates are required to hold a university degree, pass three levels of CFA Program exams (held in English), have 48 months of qualified work experience, and adhere to CFA Institute Code of Ethics and Standards of Professional Conduct. ICEF students are free to take “Practical Finance: CFA Level 1”, which is an optional course to prepare for CFA Level 1.

My first glimpse of the exam came in the second semester of my first year of studies, during the optional course “Practical Finance: CFA Level 1”. At that stage I was just trying to figure out what the exam was like. One class per week was, of course, too little to provide a multifaceted preparation, but was sufficient enough to introduce candidates to the structure of the exam and the topics to focus more on.

Further, the other courses on my master’s programme had given me the knowledge that was more than sufficient to deal with the exam questions. By the time I registered for the exam, I knew which electives were best for me to choose in Semester 3 so as to be able to continue with my exam preparation and the basic learning path. I chose Fixed Income, Derivatives, and Risk Management, and I didn’t go wrong.

In the summer time after Year One, I spent an hour or two reading through the exam materials and visiting its official sources to understand the scope of the upcoming work.

I should say that I didn’t make use of literature or sources other than the exam-recommended when I was preparing for the exam. Once you register, you receive the official curriculum and access to the question bank with convenient navigation and updates on your percentile. By the way, many choose to study using Schweser’s study materials, not the official curriculum.

The most strenuous part of my preparation began 2 months before the exam. It had me reading the official literature, taking notes, and solving the exam questions after each chapter. During those 2 months, when I was studying for the exam for 4 to 8 hours daily, my preparation was probably most intense. The last 2 weeks before the exam date I was completely absorbed by solving questions.

Exam structure

Stage one of the exam consists of two 3-hour sessions, one held in the morning and the other in the afternoon with a 2-hour lunch break in-between.

Each session has 120 multiple-choice questions (a total of 240). The questions are organized as item sets, and the number of questions in each set depends on its ‘significance’. Among the most significant sets are Financial Reporting & Analysis (20%), Ethical & Professional Standards (15%), Quantitative Methods (12%).

I mostly focused on the first two sets, I think, when I was preparing – mainly because the standards they build on are what a professional simply must be aware of. I mean, there are questions that require the knowledge of the specific differences between the US GAAP and IFRS and that cannot be solved by reasoning alone. The same applies to the Ethics session of the exam: passing it requires the knowledge of the concrete standards and how they work.

Three tips for those who decided to seek CFA certificate

· The most logical tip would be start your preparation well in advance. The scope of the material you will need to scrutinize is huge, though uncomplicated. So, all you need is, in effect, a sufficient amount of study time.

· Create a study schedule and a time management strategy that you feel comfortable with. While some people tend to be more productive in the morning and other in the evening, there should be a coherent study plan, so find a balance to make your preparation easier.

· Don’t panic. Have a rest before the exam. Your whole preparation and the sense of imminence is one big stress, and feeling stressed right before the exam is what you want least. Try to relax and ease the pressure on the day before the exam. Take a walk in the park or read something. You will need a good night sleep, so go to bed earlier because getting sleep is going to be difficult. I planned to have a 9-hour sleep before my exam but managed to get only 4.

Future plans

I think CFA exam certificate is more a formal confirmation of your knowledge level. Many companies very often use CFA exam questions to test job candidates, so sitting the exam is like preparing for a job interview. At the same time, CFA is, undoubtedly, a highly reputable charter and can be essential to careers in some areas.

I don’t think I have enough qualified work experience to be eligible for CFA charter, although I am planning to obtain it one day. I see myself growing professionally in corporate finance and I want to become a full-fledged professional in this sector.

Sofya Urmancheeva, for ICEF HSE