CFA Level 3 Exam Weights, Study Plan, Tips, Pass Rates, Fees

CFA Level 3 Exam

First of all congratulations on clearing CFA level 1 exam and CFA level 2 examination. Now comes the real deal – your last step towards success – CFA Level 3 exam!

I did clear  CFA level 1 and Level 2 exams in my first attempt, however,  it took me three attempts to clear CFA Level 3 exams .

I understood the hard way that CFA Level 3 is a different ball game altogether. Competition, the required level of preparation, difficulty all are enormous. When I look at my first two failed attempts, I see that the only reason I failed was because of overconfidence and lack of preparation.

You must not fail the CFA level 3 exam! To help you pass CFA level 3 in your first attempt, I have created this comprehensive CFA Level 3 guide. We will cover the syllabus, study plan/tips, pass rates, and results to get you started.

Read slowly, understand everything as you go along, and let this article be your first step of preparation.

    About CFA Level 3 Exam

    ExamCFA Level 3 Exam
    FeesJune 2017 CFA Level 3 Exam

    Standard Registration Fees: $930

    Late Registration Fees: $1380

    Core AreasEthics, Alternative Investments, Derivatives, Equity Investments, Fixed Income, Portfolio Management & Wealth Planning
    CFA® Exam DatesCFA® Level 3 is conducted once a year (1st Week of June)
    The DealCFA Level 3 is a full-day six-hour examination. Candidates must pass CFA Level 1 and CFA Level 2 exam before advancing to CFA Level 3 level. However, students are permitted to repeat an examination if they fail to pass.
    FormatEssay Type Questions / Item Set
    Number of QuestionsMorning Session – 8 to 12 Essay type Questions for 180 points

    Afternoon Session – 10 Item Sets for 180 points

    Pass Rate54% in June 2016
    CFA Level 3 Exam ResultUsually provided within 90 days
    Recommended Study HoursA minimum of 300 hours of preparation for CFA Level 3 is recommended.
    What next?Once you clear CFA Level 3, you are entitled to the CFA Charter (provided you have the requisitie professional work experience)

    Note – 

    • It must be kept in mind that the minimum time required to complete all the 3 levels of CFA is about 2.5 years, although an average of 4 years is taken to complete all these 3 levels.
    • To qualify for the Level III exam, one must have earned a Bachelor’s Degree or equivalent and have completed the Level II exam successfully. Apart from completing all 3 levels of CFA exam, one is required to demonstrate no less than 48 months of acceptable professional work experience to be able to apply for CFA Charter Membership.

    CFA Level 1 vs CFA Level 2 vs CFA Level 3

    CFA Level 2 is centered around imparting the knowledge of basic concepts in finance which would go into building a solid foundation for the advanced levels of this program. CFA Level 2 is more or less focused on investment tools and concepts which would help with the valuation of different types of assets. Equity & Fixed income Investments and Accounting lie at the core of its curriculum. However, CFA Level 3 level is primarily focused on bringing together all the tools, techniques, and concepts studied so far to form a part of the greater whole, which can then be applied to complex areas like portfolio and wealth management.

    The underlying subject organization remains uniform throughout levels 2, 2 & 3, consisting of 10 knowledge areas divided into 4 modules. These modules consist of ethical and professional standards, investment tools, asset classes, and portfolio management and wealth planning. As can be expected logically, the level of difficulty keeps increasing with each level and the third and final level naturally being the toughest one to crack.

    Following is a tabular representation of the subject weightage for the CFA level 3 exam.

    The primary difference that you will notice in CFA Level 3 is that there is no Financial Reporting and Analysis, Corporate Finance, and Quantitative Methods.

    Also, check out CFA Level 1 Exam & CFA Level 2 Exam

    CFA Level III Subject Weightage

    Note: These weights are intended to guide the curriculum and exam development processes. Actual exam weights may vary slightly from year to year. Please note that some topics are combined for testing purposes.

    Important Things to Remember:

    1. It will be seen that Ethics and Professional Standards has received the same amount of weightage and attention at Level III as it did at Levels I & II, which emphasizes the significance of this knowledge area in the CFA certification program as a whole. Never losing sight of the key role played by ethics in finance is perhaps one of the reasons why CFA garners such a high level of credibility in the financial industry.
    2. As must be apparent by now, the greatest subject weightage is accorded to portfolio management and wealth planning at this level, which means that one needs to be much better prepared for these areas to be able to complete the Level III exam. In terms of percentage, this knowledge area has around 45-55% of the total weightage at this level, making it a key element to success at this level.
    3. The rest of the modules, including Ethics and Asset Classes, make for rest of the weightage for this level. In short, it might seem like portfolio management and asset classes are all it would take to do well at this level but one must not lose sight of the fact that rest of the topic areas are merged with these ones, so all one can do is delve deeper and enhance his or her understanding of these knowledge areas. However, ethics and professional standards must also not be ignored while preparing for the exam as we have already discussed its unique significance in the CFA program.

    Next, we would attempt to elaborate on each of the 10 knowledge areas included in the CFA certification in general as well as with respect to the Level III exam in particular.

    CFA Level 3 Exam Subjects

    It must be understood that different topic areas are brought together at this level to form advanced knowledge areas and hence differ in their form and structure from topic areas at Level I & II.

    At each level of the program, the curriculum is organized into study sessions with readings and Learning Outcome Statements (LOS) for each of them, which describe evaluation or other analytical tasks you should be able to complete. It must be kept in mind that at this level, some of the key knowledge areas are combined, depending on their level of interrelationship.

    • Study session 1-2: Ethics & Professional Standards
    • Study Session 3: Behavioural Finance
    • Study Session 4-5: Private Wealth Management
    • Study Session 6: Portfolio Management for Institutional Investors
    • Study Session 7: Application of Economic Analysis to Portfolio Management
    • Study Session 8: Asset Allocation and Related Decisions in Portfolio Management
    • Study Session 9: Asset Allocation and Related Decisions in Portfolio Management (2)
    • Study session 10: Fixed-Income Portfolio Management
    • Study Session 11: Fixed-Income Portfolio Management (2)
    • Study Session 12: Equity Portfolio Management
    • Study Session 13: Alternative Investments for Portfolio Management
    • Study Session 14: Risk Management
    • Study Session 15: Risk Management Applications of Derivatives
    • Study Session 16: Trading, Monitoring, and Rebalancing
    • Study Session 17: Performance Evaluation
    • Study Session 18: Global Investment Performance Standards

    For more details, please visit – CFA Level 3 Subjects

    Top 10 CFA Level 3 Exam Tips

    As we have already discussed, CFA Level 3  has more to do with concepts rather than techniques and tools which must be kept in mind while preparing for this exam. It goes without saying that only a select few ever reach this level after completing Levels I & II which are no less grueling. To clear this level, it is important to have gained an in-depth understanding of concepts and really know how to apply them as well. There are some important ways in which CFA Level III differs from earlier levels, including the format of the exam and the structured arrangement of subjects.

    Here are the top tips for Clearing CFA Level 3 Exam

    # 1 – Don’t’ be overconfident

    Having cleared CFA Level 1 and CFA Level 2, it is obvious that you are confident. However, don’t think that the tricks that led you to pass the first two exams will also apply here. The game and format are different. All the players in this game are very competitive.

    Make sure you start early for CFA Level 3.

    # 2 – Tackling Essay-type Questions

    It must be kept in mind that these essay-type questions are composed of multiple parts and you have to organize an answer in a template after studying them carefully. The important thing to remember is that these essay-type questions are focused on the individual and institutional wealth management and it is naturally incumbent on the student to have an intricate understanding of portfolio and wealth management concepts, which lie at the heart of CFA Level III exam, to be able to see through essay-type questions successfully.

    It has 180 points which are equal to the number of minutes for this morning session. Every question has it’s allocated marking against it which can also be taken as the number of minutes which might be spent to answer it. It must be kept in mind that about 80 marks (45%) worth of questions would be asked from the subject matter of Portfolio Management, both individual and institutional.

    # 3 – Practice Last 5 years of CFA Level 3 Exam Papers:

    To help students get an idea of what lies in store for them, CFA makes available question papers for the last 3 years for students. CFA Level 3 is the only level for which the CFA institute releases the previous year’s actual exams. Practicing these papers will help get a feel of how the questions are formulated although the actual questions keep changing every year.

    Additionally, you can also get access to earlier years question papers searching on google. It is always useful to get access to as many previous exam papers.

    #4 – Do Not Write Essays for Essay-type Questions

    OK! here essay type doesn’t mean that you have to reproduce 2000+ words answer. You should provide pinpointed responses instead of writing essays. Avoid showing off knowledge of other areas of CFA and focus on the question at hand as it won’t help you score better and only take up extra time.

    Also, note that the previous year’s CFA level 3 exam papers provided by CFA Institute contain guideline answers to the questions. Carefully note these guideline answers so that you can keep following the same principles during the morning exam. My tip is that you keep your answer to directly come to the point, keep your answers concise and make use bullet points

    # 5 – Tackling Item Set Questions.

    This afternoon session is generally simpler than the morning session, It is based on the standard format followed in Level I and II of CFA where item set questions are based on any one or a combination of the topics. There is a greater focus on Ethics and GIPS in the afternoon session and there could be 2 items set on ethics and 1 item set on GIPS. This session also has 180 points and a 180 minutes duration which can help quite a bit with time management as well. You must practice Item Set mock tests before the actual exam. 

    # 6 – Don’t’ hurry in the Afternoon Examination

    It goes without saying that calculation based questions must be understood properly before they can be attempted for even a simple mistake in calculation might affect the outcome, although there is a silver lining in that most of the questions are independent of each other so making a minor inadvertent mistake could be overlooked by the examiner if your skills and comprehension shows in the solution. Broadly speaking, if you score about 60% in the morning session then you will require nearly 75% – 80% in the afternoon session to be able to clear the exam.

    Most of you will complete the afternoon sessions well ahead of time. However, please do take the time to revise and recheck your calculations. This last-minute relook at the afternoon item sets helped me a lot. I went through the ethics section again and after re-reading the questions, I changed the answers to at least 4 of them. I scored more than 70% in Ethics!

    # 7 – Master Ethics & GIPS

    As you know already, Ethics is the core of CFA examinations and its weight remains almost the same in all three levels. Ethics always remains tricky and therefore the best way to master it is to practice using mock tests and end of chapter questions.

    Also, make sure that you have enough time left to revise ethics sessions at least twice.

    # 8 – Behavioural Finance

    Most of you will be reading behavioral finance for the first time. Go slow, concepts look easy but they are highly deceptive. When asked in the exam, they do create lots of confusion. Again, I recommend you to practice this section using the end of the chapter questions as well as mock questions.

    Also, please read this session at least thrice as questions on this section are expected.

    # 9 – Spend a minimum of 300 hours

    300 hours of preparation time is approximately 1 hour per day. Please ensure that you have enough time for preparing for the CFA Level 3 examination. 300 hours is just a guideline. You may take more or even less than this. However, my take is to evenly space out your preparation throughout the year instead of slogging at the fag end.

    # 10 – Give 4 weeks for Intense Revision and Practice

    I see that the last 4 weeks will either make or break your preparation. You can even take the last 2-3 weeks off so that you can dedicate full efforts for revision and practice. Try to give at least 4 Full mock tests for effective preparation.

    CFA Level III Results & Pass Rate

    CFA Institute announced that of 28,884 candidates who sat for the Level III CFA exam in June 2016, 54 percent passed the third and final exam. For the Level II exam, 46 percent were successful and for the Level I exam, the pass rate was 43 percent.

    source: CFA Institute

    In the past 15 years, from 2001-2016, the overall average pass rates for the CFA Level III exam is 55%

    Also, have a look at CFA Exam Dates & Schedule.


    To sum it up, CFA Level 3 might not be easy for you but in the first place, it is not supposed to be, as the final level of one of the toughest financial credentials to be earned in the financial industry, so, therein lies the challenge. As far as CFA Level 3 exam is concerned, you may need to shift their focus from tools, techniques, methodologies and topic weights to concepts and their application in a number of varying contexts to be able to see through it successfully. Those who have worked their way diligently through Level I & II may find that Level III is designed to help evolve their understanding of financial analysis and how it might find applications in the real world. It is the final obstacle to CFA Accredited Professional, overcoming which, students can look forward to earning CFA Charterholder after fulfilling work experience requirements to become a competent financial professional with globally-acknowledge credentials.

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