-->WASHINGTON--(Dow Jones)--Financial industry professionals who took the first section of the Chartered Financial Analyst exam this spring had the highest failure rate since the test began in 1963, and received a scolding letter last week to complete their misery.

Only 34% of the people who took the exam passed it this year, according to a letter sent out to all test-takers. Approximately 35,000 people enrolled to take the test, according to the CFA Institute, the non-profit educational organization which oversees the exam and the CFA designation.

The CFA is a multi-year exam with three levels designed to test participants' financial industry knowledge, from ethics to derivatives. From 1963 to 2003, the average pass rate for the first level has been 52%. Results from levels two and three have not yet been released, but on average have been higher than that of level one, at 55% and 69%, respectively.

The CFA is considered one of the toughest exams around, failed by finance professors and longtime Wall Street professionals regularly. It is sought as a mark of cachet and accomplishment in the financial services industry; in the U.S., the only way a Wall Street analyst can bypass taking the practical-knowledge portion of a new mandated exam by next April is if he or she has passed the first two levels of the CFA.

In addition to their rotten scores, the entire class of CFA exam test-takers received a stern letter dated July 28 from the CFA Institute's chairman, Theodore Aronson, and its president, Thomas Bowman. The letter said that said 2004's results are part of a"downward and disturbing trend" that has continued for several years. The CFA exam's grading process has not changed, they maintained; it is the exam-takers who have slacked off.

"Over the years... we have seen a steady decline in the percentage of CFA candidates who indicate that they are seriously preparing for the CFA examination," Aronson and Bowman wrote in the letter. Successful candidates generally study more than 250 hours for each level of the exam, but it appears that more people aren't actually reading the study materials and are instead relying on prep courses and study notes, they said.

Kathy Valentine, a spokeswoman for the CFA Institute, confirmed that the letter went out to all exam takers who received their scores in the mail. It was also posted online for anyone checking their scores via computer.