CFA in China

China is crazy for certifications of all kinds, and CFA (Chartered Financial Analyst) is one of the hottest ones in the fields of banking and finance.

Why? With a CFA you're seen as reliable, smart, international, having strong potential and being able to make lots of money. It's also a good mark of stability and your ability to get ahead in the system.

No surprise, then, that China ranks second (behind the US) in terms of number of CFA exam takers. There are exam sites in Beijing, Shanghai, Guangzhou and Hong Kong, and probably more to be added in the coming years. Over 10,000 people in China take the CFA exam every year.

Yet the results show that Chinese candidates need to improve their performance. While the pass rates have been steadily improving, Chinese test-takers are still below average. For example, I estimate that fewer than one-in-five (that's less than 20%) test takers in China actually pass the Level 1 exam (there are three levels which each require lots of study hours and a separate test). That compares to about 35% globally and over 50% in Western Europe (those are rough figures depending on the year).

For the most recent test (June 2009), the global pass rate was an impressive 46%.  And while I don't have country-by-country breakdowns, we can assume that Chinese candidates still faired poorer than the norm.

● In 2011 210,000 people from 162 countries have taken or are registered to take the CFA exam

● 43% percent of the 115,027 test-takers passed their exams

● Only 19% of all CFA charterholders are women

● Currently out of the 48,068 level 1 attempts only 38% percent have passed in 2011

Given that the CFA pass rates are so low in China, how can candidates expect to pass?

There are lots of ways to study for the CFA Level 1 exam, but increasingly students in China are turning to e-learning tools to help them. Why are CFA candidates learning online instead of with books or in the classroom? Here are some thoughts to consider:

1) Study on your own time. With e-learning, you aren’t bound by a class schedule and you can study on your own time at your own pace. So no weekend CFA classes if you don't want them.

2) No classmates to distract you. CFA study courses are popular all over the world, but a big downside is that there are plenty of classmates to slow you down or distract you. With e-learning, you can study on your own and focus on what you need to learn, not others.

3) Practice questions. The best way to pass the exam is to take practice tests and get your mind ready for exam day. Online courses include hundreds (sometimes thousands) of prep questions so you can take mock exams over and over again.

4) No books to lug around. With online study you won’t have tons textbooks or notes to carry around with you. Have you seen the size of some of the study note packages?

5) Interactive widgets. As you might guess, e-learning makes use of technology to help people learn better. So you can get instant feedback while you are learning and get diagnostic information about your performance on practice exams.

6) Cost. Did you know the average cost of study materials for the CFA is over US$2,000? Most online courses cost a fraction of that and will give you the same amount of information (i.e. the Candidate Body of Knowledge) as a long classroom course or series of expensive textbooks.

Some CFA candidates combine the benefits of online training with classroom courses and books. This is may be overkill. Online courses will give you access to the entire Candidate Body of Knowledge (CBOK) and can do it more efficiently than books or a classroom. So why not consider e-learning as a substitute for those books and other courses?

Good luck!

The CFA Institute has China-related information on their website, which is helpful for anyone considering taking the exam. Make sure to check it out.

There are also lots of online forums for test takers.

Vast Talent (my company) sells online CFA prep courses. Click to see our offerings.