CFA Level III Exam Preparation

The Level III CFA exam can be the most challenging of all the CFA exams, but it doesn’t have to be. This article will reveal what to expect on the Level III CFA exam, give you the best tips on how to prepare, and answer the most common question that candidates have about how to prepare for the Level III exam.

• The 10-year average pass rates for the CFA Level III exam are around 52%, although more recent pass rates are lower due to the pandemic.
• The Level III exam format consists of a combination of constructed response (essay) and item set questions.
• The exam is divided into two sessions: a morning session and a session in the afternoon.
• Portfolio Management and Wealth Planning is the most heavily weighted topic area on the Level III exam.

One of the most asked questions we get about the Level III exam is around how to best prepare. That’s why we’ve outlined some of our best tips and tricks below to help you study and pass the CFA Level III exam the first time.

Develop a Plan

Developing a solid plan can be the difference between passing the Level III exam and having to spend twice the money and time with a re-take. Just like you’ve already done with Level I and Level II, you’ll need to figure out how many months you have to prepare and how many hours you can dedicate to study sessions.

Make sure you have at least six months set aside to prepare, with a study plan of around 340 hours. This can be broken down to about 13 hours per week dedicated to the Level III exam. The earlier you’re able to begin, the more time you’ll have. Lean on what you’ve learned by studying for the first two CFA exams and slide back into the rhythms that helped you succeed.

And if you need to travel to a test site or have funds set aside for travel, make sure all those details are part of your plan as well.

Equip Yourself With Study Materials

Top-notch study guides and reading materials are the keys to accomplishing your goals. UWorld is an industry leader with CFA Level III exam prep materials that are customizable to your needs. UWorld has helped students in over 100 countries pass the CFA Level III exam and is a resource you can trust to equip you with everything you need to pass the first time.

UWorld’s teachers make the material approachable and practical, using explanatory graphs, and addressing each and every Learning Outcome Statement in the CFA Program curriculum.

Set a Minimum Score Goal for Yourself

The minimum score you’ll need to pass the CFA Level III exam varies by exam and is not disclosed by CFA Institute. With that in mind, it’s a good idea to set a minimum score goal for yourself as you start your exam prep. For example, you might want to shoot for no less than 80% on your exam, an attainable goal that might help you go the extra mile as you prepare.

Familiarize Yourself With Your Calculator

Just like the previous two exams, your calculator is an essential tool for the Level III exam. So be sure to find out which calculators are allowed and become as familiar as possible with the one you choose. The advanced functions your calculator offers will help you save time on exam day.

Join a Study Group

If you studied with a group during your preparation for the first two exams, you know how helpful it is. If you chose not to join a study group for those tests, the Level III exam might be the perfect time to change your approach. Those that have earned their CFA designation agree that a good study group can help with memory, discipline, motivation, and can even help you absorb more material than when you study alone.

A small, like-minded group with similar goals is best, especially one that is able to meet consistently and focus on exam prep.

The format for the CFA Level III exam can change from year to year, but most recently has been made up of a combination of vignettes with multiple-choice items and constructed response (essay) questions. The format with vignettes followed by question items will be familiar from Level II but cannot be underestimated as it will factor in as around half of your exam grade. Stay sharp with practice questions during your study sessions. The essay section will demand a lot of your time as well and is likely less familiar.As you approach this format, take the time to read each question thoroughly before the case information to be sure you understand how to proceed. Then look at the case info and begin to practice writing concise, to-the-point answers so you stay within your goal time limit. UWorld’s practice questions and study materials are a valued resource for this stage of your journey to ensure you are prepared and confident on exam day.

Focus on Concepts, Not Just Memorization

While the Level III CFA exam does require that you memorize a lot of material, it’s the concepts that matter most. On exam day, you aren’t going to just pull from a memory script in order to pass. Instead, you’ll need a deep understanding of the concepts to apply them to real-life situations on the exam. Be sure to take advantage of UWorld’s trusted reading materials and understand all of them before your Level III exam.

How to Prepare for the CFA Level III Vignettes

Just like the Level II exam, the amount of time you’ll spend on each vignette is much different than how you’ve approached multiple-choice questions. One way to practice the format is to start by reading the questions. This way you’ll know exactly what you’re looking for when you go back and read the vignette. Plenty of practice questions and mock exams will help get you up to speed.

Get your CFA Level III Test Bank.

Understanding Constructed Response Format

Part of the unique challenge of the Level III exam is the constructed response format. You will need to draw on your deeper understanding of the concepts from the Level III material to answer each question as briefly as possible to get all the points. Be specific and know that time management at this stage is more important than ever. Be careful not to write too much because there are no extra points for the length of your answer. You’re even allowed to use bullet points and graders aren’t concerned with grammatical errors.

There are 7 topic areas on the CFA Level III exam with varying weights. The weights can change periodically, but typically this exam is weighted heaviest towards Portfolio Management & Wealth Planning.Fixed Income Investments is next on the scale, with Ethical and Professional Standards and Equity Investments following. Derivative Investments, Economics, and Alternative Investments round out the Level III topics. This should help give you a better idea of how to prioritize and craft your study sessions.

Learn more about CFA Level III Topic Weights.

Managing your time well during the CFA Level III exam is vital. One way to do this well is to come up with a time per question strategy. The number of questions can vary, so as you prepare using mock exams, start by figuring out how much time you have per question. It can be helpful to consider one point to be equal to one minute of time spent on each question.

Preparation includes lots of practice. And you’d be hard-pressed to find a better source of practice material for the final CFA exam than UWorld. With a wide range of practice problems, practice exam questions, and prep courses, UWorld offers the best CFA Level III exam prep you’ll find. The study materials are great for individual as well as group practice and review.Want to be prepared for all types of questions on the Level III CFA exam? Study with our popular Level III CFA Test Bank to ensure you’re ready on exam day. Shop Test Bank Now.

The final 4 weeks before the Level III exam might be the most important time in your preparation. We suggest completing at least one mock exam each week during this time, and make sure that your time per question is locked in. You’ll also want to prioritize topic areas that you’ve struggled with in the past to sharpen your skills before test day.

Considered by many to be the toughest CFA exam in the CFA curriculum, preparing for the Level III test can be overwhelming. To avoid burnout, schedule plenty of breaks to ensure you’ll have enough energy to reach your goal. Keep or develop healthy eating and sleeping habits as well and examine your study pace to assess if you’re trying to do too much. UWorld’s materials are here for you throughout, and we even offer a Facebook group that can help with solidarity and support during your journey.

Preparation is the key to passing your CFA Level III exam. It starts with a solid plan and then continues with sticking to that plan consistently. UWorld’s study guides and reading materials are here to help. After all, two out of three candidates who’ve used a competitor’s product prefer UWorld. And even if you’re unable to reach your goal of passing the Level III exam the first time, you’ll have the option of re-taking the exam to earn your CFA charter.