In the past few years, there has been an explosion of CFA prep providers, competing to help candidates study for the dreaded exams. Traditionally, candidates would either study on their own using the CFA curriculum or the Schweser notes, which provide a summary of the curriculum.
There are several factors which explains why there are now so many CFA exam prep providers, official and non-official. First, technology makes it easier than before to create and distribute study material. Companies no longer need to print physical textbook but can distribute it online as a PDFs. In addition, other mediums such as online classes and videos are becoming more popular. Third, the sheer amount of candidates who register for the exam every year is such that it creates a large market for resource providers to tap into.
The investment field worldwide is very competitive and having a CFA designation is now almost a prerequisite for many jobs. Couple that with passing rate often lower than 50%, and it creates huge pressure for candidates to make sure they have the best resources at their disposal to pass the exam.
The tsunami of newcomers has had two effects on the CFA prep providers market. First, it has pushed prices down since providers who are confident in their product often try to lure candidates to use their material by keeping price low. Besides, since most of the material is distributed online, the marginal costs is extremely low. Second, competition has created pressure to make sure the quality is better than existing products out there. There is a process of natural selection by which lower quality products or those that do not add any value, disappear since candidates will flock to the material that has the highest value per dollar spent.
Although there are now more high quality educational CFA material out there than at any time in history, it is not easy for CFA candidates to sort through the various options available to them. Most candidates usually revert to the Scheweser Notes since they are most familiar with them and their friends use them and were generally somewhat satisfied. In order to help candidates learn about other resources available to them, Financial Analyst Warrior decided to test out some of the most promising products for CFA candidates.
CFA Level 1 Prep Provider Review: Passed Tense Video Lessons and Adaptive Exams
Financial Analyst Warrior recently decided to try the CFA prep material provided by one of the relatively newcomers: Passed Tense.
Passed Tense offers video lectures, study notes and sample exams for level 1 (I am told by Passed Tense management that level 2 and 3 are being prepared and should be released soon). Out of all the prep providers, they seemed to have the most modern an up to date approach so we decided to give them a try and provide an honest review of their offering. We reached out to Passed Tense and the owners were kind enough to provide Financial Analyst Warrior with a free access to their study material so we could try it out.
Passed Tense Video Lectures
Passed Tense video lessons are given by Mike Carmody whom we had to pleasure to speak to and who has an actuarial background and clearly a teacher’s soul. Passed Tense provides a comparison of their video lessons with other providers which emphasize how much more entertaining their videos are. Having tried some of the other providers videos, I have to admit that Passed Tense seem to have gone to great lengths to make the videos less dry and more entertaining. For example, they have added various animation to explain the concepts and Mike Carmody provides many examples of practical applications.
The videos are surely superior than that of the competitors but where Passed Tense really stands out is with their adaptive exams which adjusts the questions’ difficulty level according to the candidate. According to Mike Carmody, the Adapt technology was used with great success in the actuarial field and allowed exam candidates to progressively improve their level through solving gradually more difficult questions. Below is a screenshot of the interface which is clean and user friendly.
This is truly innovative since there are a plethora of question banks and mock exams out there, none of which is adaptive. The way it works is simple: each question is assigned a certain degree of difficulty and when a candidate starts an exam, he has a “Earned Level” of 3 out of 10. The Earned Level indicates the level of difficulty that the candidate has achieved and Passed Tense claims that with a level of 7, a candidate is ready to pass the CFA exam.
The theory for using adaptive exam is that when a candidate takes an easy mock exam, he is not being adequately prepared for the exam and when he takes a hard one, he may lose confidence and motivation which is equally bad. Most practice exams out there are just a random mix of questions of various difficulty level so there is no progression from easy to hard. GMAT practice exams have used a similar technology to prepare candidates progress gradually.
I have tried an adaptive exam and have indeed seen the questions get harder as I was nailing the easy ones. My “Earned Level” was increasing which was actually quite gratifying and after a while, boosting the level becomes the goal just like in a video game. This is an aspect which I did not expect but could prove quite positive for candidates who have a hard time mustering the motivation to solve problems or exams. In my experience (and Mr. Carmody also mentioned it during our conversation) solving practice exams is the most essential part of the candidate’s preparation for the CFA exam. The reason is that simply studying the material does not necessarily prepare you to solve questions. In other words, the candidate must be comfortable with the type of questions, the way they are asked and how to answer them. This knowledge can only be gained through solving exams.
I would personally recommend the Passed Tense CFA Level 1 Prep Material solely on the basis of the Adapt Exams. The videos are a nice addition but the bulk of the value in my opinion is in their adaptive exam technology. They are not yet as popular as the other “traditional” CFA prep providers but I believe that once Passed Tense includes level 2 and 3 in their product line, they will become a contender. Which brings me to my final point. As a financial analyst, I understand that nothing should be judged solely by its intrinsic value; what matters is how the value compares with its price. In Passed Tense’s case, the best value would be the video + study manual + adapt exam package which is much cheaper than any competition. The best part is that they are confident enough in their product to offer it for free for 7 days!
I hope this review was useful and will guide your choice of CFA preparation provider. We will try to review other products and provide our opinion on them in the future.
If you are starting your study process for the December CFA Level 1 Exam, check out our CFA Level 1 Starter Kit which includes customizable exam schedules, exam preparation guides as well as a detailed explanation of the 100 most common pitfalls where candidates typically lose marks on the CFA level 1 exam!