CFA Level 1 Ethics November 2025 Exam: The Secret to Passing (And the Ethics Adjustment Explained)

Dimitri Dangeros, CFA, CAIA
13 hours ago
5 min read

If you’re sitting Level I in the November 2025 window, Ethics is the one topic that can both lift your overall score and—if you’re on the cusp—decide your pass/fail. Treat it like a mini-exam inside the exam: it’s heavily weighted, scenario-driven, and rewards consistent decision-making more than obscure facts. Below is a tight game plan that explains why Ethics matters, how the “ethics adjustment” works, how to approach cases efficiently, and what to know from the Standards of Professional Conduct.

Why Ethics matters so much

High impact per minute. Ethics appears throughout both sessions and converts disciplined reading into reliable points. Because the content is consistent across sittings, practice translates exceptionally well to exam day.
It’s the ultimate tiebreaker. If your total score lands near the Minimum Passing Score (MPS), strong Ethics performance can tip a borderline result to Pass—and a weak performance can tip it to Do Not Pass. This adjustment won’t save an obviously low score, but it absolutely matters in close calls.
Predictable logic beats trivia. Ethics questions reward process: spotting the relevant Standard, applying stricter rules when laws and the Code differ, and defaulting to disclosure and documentation when judgment is needed.

The ethics adjustment, demystified

Think of the ethics adjustment as a borderline review. After raw scoring, candidates who fall into a band around the MPS are evaluated on Ethics performance. A clearly strong showing in Ethics can move a candidate above the line; a clearly weak one can pull a borderline candidate below it. There’s no separate “pass score” for Ethics and no published threshold—so the smart play is to make your Ethics section unmistakably strong.

Practical implication: If you’re short on study hours in the final weeks, an extra 60–90 minutes per day on Ethics often has a higher expected payoff than a marginal topic elsewhere.

A case-study method that works under time pressure

You’ll face short vignettes with three questions each. Use this five-step routine (about 90 seconds per question):

Name the Standard first. Before peeking at answers, label the likely Standard (e.g., MNPI, Fair Dealing, Suitability, Conflicts). Anchoring early cuts through distractors.
Apply the stricter rule. If local law and the Code conflict, follow whichever is stricter. This instantly eliminates choices that lean on the looser standard.
Check for disclosure, consent, and records. Many borderline situations become compliant when the professional discloses conflicts, obtains (often written) consent, and retains appropriate records.
Hunt for what’s missing. Weak answers usually omit a safeguard: no firewall for MNPI, no supervisor escalation, no IPS update, no client notification, no gift disclosure.
Test harm and remedy. Ask: who is harmed (clients, markets, employer, program integrity)? Choose the option that fixes that specific harm with a concrete control.

The Standards you must be fluent in

Know the seven Standards—and, more importantly, what “right” looks like for each:

I: Professionalism — Knowledge of the Law; Independence & Objectivity; Misrepresentation; Misconduct.
II: Integrity of Capital Markets — Material Nonpublic Information; Market Manipulation.
III: Duties to Clients — Loyalty, Prudence, and Care; Fair Dealing; Suitability; Performance Presentation; Preservation of Confidentiality.
IV: Duties to Employers — Loyalty; Additional Compensation Arrangements; Responsibilities of Supervisors.
V: Investment Analysis, Recommendations, and Actions — Diligence & Reasonable Basis; Communications with Clients; Record Retention.
VI: Conflicts of Interest — Disclosure of Conflicts; Priority of Transactions; Referral Fees.
VII: Responsibilities as a CFA Institute Member or CFA Candidate — Conduct in the Program; Reference to the CFA Designation.

High-frequency scenarios to master

Gifts & entertainment: Acceptable only if they don’t compromise independence/objectivity and are disclosed per firm policy. Timing matters (before vs. after a recommendation) and so does magnitude.
Issuer-paid research: Permissible if you maintain independence and objectivity, disclose compensation, and ensure a reasonable basis. Watch for travel perks and over-reliance on issuer-provided data.
MNPI & mosaic theory: Never act on MNPI. Public information plus non-material nonpublic inputs used in original analysis is fine (mosaic). Without firewalls/watch lists in integrated firms, assume risk of misuse.
Fair dealing vs. priority: Allocate fairly among clients; no selective disclosure. Client trades come before employee and firm accounts unless documented exceptions apply.
Suitability & the IPS: Recommendations must match objectives, constraints, and risk tolerance. Material changes require updating the IPS first, then adjusting the portfolio.
Performance presentation: No cherry-picking, guarantees, or misleading composites. Accuracy and completeness beat marketing shine.
Supervision & record retention: Supervisors must design and enforce adequate procedures; all analyses and communications need appropriate records.
Program conduct & the marks: Use the CFA designation and program references precisely; exam conduct rules are strict and violations are costly.

A 10-day Ethics sprint for CFA Level 1 November 2025 Exam

Days 1–2: Map & memorize smartly.Create a one-page “trigger list” per Standard (e.g., for Independence & Objectivity: gifts, issuer-paid, research access, travel). Add the default remedy for each (disclose, obtain consent, refuse benefit, implement firewall, escalate, update IPS).

Days 3–6: Timed mini-sets (high volume, low friction).Do two sets of 15–20 Ethics questions daily. Log misses with a one-line cause (“ignored stricter law,” “forgot disclosure,” “skipped IPS update”). Re-work these 48 hours later to lock the fix.

Day 7: Weak-spot workshop.Deep-dive the Standards you miss most (commonly I(B) Independence & Objectivity; III(B) Fair Dealing; V(A) Diligence & Reasonable Basis; VI(A) Disclosure of Conflicts). Build micro-checklists for each.

Day 8: Mixed-topic stress test.Insert an Ethics block into a full mock. Practice doing first principles first: identify the Standard → apply stricter rule → add required controls (disclose/consent/records).

Day 9: Edge cases and wording traps. Review questions with “always/never,” employer vs. client loyalty tensions, referral fees, and personal trading vs. client priority.

Day 10: Light polish only.Skim your trigger list and redo 20 previously missed questions at exam pace. Sleep.

Exam-day tactics

Do Ethics while fresh. If your pacing approach allows, tackle an Ethics block when concentration is highest.
Write the Standard in the margin. A two-second label keeps you anchored and speeds elimination.
Prefer answers that install real controls. The best choice usually includes the exact safeguard needed: disclosure, written consent, restricted lists, enhanced supervision, IPS updates, or record retention.
Don’t chase perfection. If you’ve narrowed to two plausible answers, pick the one that best protects clients/markets and demonstrates transparency.

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