The CFA program is known to be one of the most challenging qualifications in finance available in the world today. Clearing the CFA exam requires doing an extensive study for hundreds of hours to assimilate a wide range of topics, which are divided into 10 areas by the CFA Institute. There are 3 levels of the CFA exam and a candidate has to successfully clear all three before he can be awarded the CFA charter.
Professional ethics is one of the core areas of the CFA program and it is one of the 10 areas mentioned above. It is spread across all the levels of the exam. The weights given to the topic area “Ethical And Professional Standards” in the three levels are as follows:
|Level II||10 to 15%|
|Level III||10 to 15%|
As you can see, this is quite an important topic and one thing that I can safely tell you is that without studying ethics properly you will not be able to clear the CFA exam at all. In fact, you have to apply the concepts of ethics in every paper of the three levels of CFA exam in order to convince the examiners that you are going to be a worthy flag bearer of the CFA profession.
Tips For Studying Ethics Effectively For The CFA Exam
One thing that I want to make very clear to you at the onset is that there is no shortcut to reading ethics in the CFA course. The institute clearly wants you to have a thorough knowledge of the Code Of Ethics and the Standards Of Professional Conduct that will be applicable to you once you start working as a CFA. Hence you need to read these topics and concepts in depth and develop a clear understanding of how CFAs should behave professionally.
Develop a plan and study approach
Before attempting to study the ethics papers you need to clearly understand the curriculum well. Unless you are absolutely sure about what is expected of you, studying ethics will become very difficult. So the steps that you should take to study ethics are:
- Understand the curriculum thoroughly
- Decide on the additional study materials that you will follow apart from the materials given to you by the CFA institute
- Complete the initial reading
- Practice solving questions
- Practice answering questions under exam conditions
- Appear for the exams
Learn the standards by heart
The reason why most people find it very difficult to answer the ethics questions correctly is because they do not be adequate attention to learning the Code Of Ethics and the Standards Of Professional Conduct properly. Do not make this mistake, otherwise, it can cost you dearly. In fact, you will find that once you no these materials by heart you will find it very easy to clear the ethics papers of all levels and will have much lesser confusion than most of the other students.
Be prepared to answer every question ethically
In the CFA examinations, all questions will have to be viewed from an angle of ethics, even if the paper that you are attempting is not an ethics paper. For example, if the paper is related to investment management and advisory, you will have to answer everything keeping in mind the best ethical practices.
The CFA institute very cleverly tests the candidates on ethics at every level by blending ethics into almost every question that come in the examinations. There might be an ethical angle in the question which you might not notice and get trapped unnecessarily. So be very careful about how you answer the questions. This will help you to not get trapped unnecessarily.
Solve ample number of case studies
One important area of the ethics papers are the case studies which will require you to analyze situations and come up with your recommendations regarding what is the most ethical thing to do. This case studies are generally very in depth and require you to think very analytical to arrive at the best possible thing to do in that situation.
The case studies will require you to think from a first hand perspective and analyze the different outcomes very critically. This causes problems for a lot of people since they tend to go with their gut feeling instead of thinking from the perspective of ethics. Often the answer which seems to be correct is not the one.
Case study questions of Level I are short but generally in the Level II and Level III long case study questions will come. You need to practice solving case studies regularly in order to become adept in them.
So these were the tips for clearing the ethics papers of the CFA exams in the most comfortable way. Implement the steps and let me know whether you found these to be useful or not.