CFP Exam (Certified Financial Planner)

What is a Certified Financial Planner (CFP)?

If you are considering a career in CFP, first pay attention to the following facts –

  • Which globally recognized financial planning course is offered under US $700? If you answer ‘nothing,’ here’s the answer for you – it’s CFP.
  • As most people think that CFP is much easier than any other financial course, let us remind you that you need to complete three full years of professional experience related to financial services or two years of apprenticeship to be eligible for CFP certification.
  • The passing percentage in 2015, on average, is around 67%.
  • In a survey done by CFP Board, it was found that 85% of candidates considered CFP certification as the most important step for their career, 95% mentioned that CFP offers adherence to professional standards, and 97% said that as financial planners, ethical code of conduct is very important which CFP.
  • To receive CFP certification, you need to adhere to 4 E-Education, Examination, Experience, and Ethics.
  • CFP Board has been serving its students for more than 30 years. As this board is a non-profit, the chief focus of the CFP Board is to create extraordinary value for its students.

The above is just a small portion of the whole iceberg. If you want to know everything about CFP, read on. We will provide you all the details concerning exam format, eligibility criteria, pass percentage, fees, and many more.

CFP-EXAM

Let’s see first what CFP Certification is all about.

  1. About CFP Certification
  2. Why pursue CFP?
  3. What top companies have to say about CFP
  4. CFP Exam format
  5. CFP Principal topics & Weightage
  6. CFP Exam Registration Process
  7. CFP Exam Fees
  8. CFP Exam Passing Rate
  9. CFP Exam Study Material
  10. Strategies to clear CFP Certification Exam

About CFP Certification Program

If you are in your mid-career, you may have met many financial planners who promised to support you, but actually, they supported themselves in the pursuit of helping you reach your financial goals. But CFP is different. The first and foremost criterion of Certified Financial Planner certification in Ethics and thus, all of the financial planners who have CFP certification; you can trust them with your financial goals. If you want to be one yourself, you will also learn strict guidelines for maintaining ethics.

  • Roles: After getting your certification as a Certified Financial Planner, your options would be much broader. From retirement planning to tax savings, you can do almost anything within the purview of financial planning. You can work as a financial manager, risk manager, estate planner, retirement planner, and many more.
  • Exam: From November 2014, the examination format was changed. It is now 7 hours exam. Out of 7 hours, you need to take two 3 hours exam. In between, you will get a 40-minute break. Now, you need to answer 170 questions. It is significantly easier as you need only one level to clear.
  • CFP Exam Dates: To allow students to take the CFP exam multiple times in a year, the CFP board created three exam windows every year. You can sit for an exam in March, July, and November every year.
  • Nitty-Gritty: There are only five subjects you need to go through in your CFP certification. The course is designed so that students can go deep on every subject and understand its inherent essence to implement it in real life. The whole curriculum includes different aspects of financial planning at micro and macro levels.
  • Eligibility: There are mainly two educational requirements for CFP certification. First is to complete college or university-level coursework through a program registered with CFP Board, addressing the major personal financial planning areas. The second is to verify that you hold a regionally accredited college or university’s bachelor’s degree or higher certification. The coursework should be completed before you even sit for the CFP certification examination. The bachelor’s degree requirement you may complete after you pass the exam (within five years). If you want to get certified as a CFP professional, you need to have three years of full-time professional experience regarding financial services, or else you need to have two years of apprenticeship experience that meets the requirements.

Why pursue CFP will benefit you?

CFP is a certification which helps people to plan their finance well. In the USA, the average age of the population is 36.8 years, and thus, the need to reach their retirement age with good net-worth is of utter importance. Moreover, there are issues with unemployment which no-one can ignore. CFP opens doors for professionals and offers you many opportunities. Let’s see some solid reasons for which you should pursue the Certified Financial Planner exam with all your heart –

  • Whether you agree or not, cost matters. If you want to do a course and it is not under a convenient range, would you do the course all by yourself? The answers may vary. But in the case of CFP, you will get both – a world-class course along with a reasonable fee, which is easy for you to pay. You only need to pay the US $700 to do this course. If you are still worried about the curriculum, read on; you will understand why it’s one of the top-rated courses in the world.
  • If you have suffered through financial issues or seen someone close suffering from it, you would know how it feels. CFP doesn’t only offer you a lucrative career opportunity, but through this career, you can help a lot of people to adjust their sails of finance and increase their savings and net-worth over time. How would you feel if you have someone trustworthy on your side to take care of your financial aspects? You can offer the same trust and benefits to all your clients and help them succeed in their finances.
  • CFP is a very thought-out course. Nothing has been added to the curriculum just to sell the program. As we already mentioned, CFP has four E-education (approved curriculum), examination (comprehensive exam), experience (3 years practical experience or 2 years of apprenticeship experience), and ethics (strict code of conduct). What more do you need in a professional, global qualification? If you are just a graduate and thinking about doing something different, you can try CFP as it would help you strengthen your core values and would teach you practical tools to thrive in a career of financial planning.
  • CFP is not a professional that stales over time. It’s being expected that the financial planning career path would grow by 41% in 2016. Think about it. If you become a CFP and every year it grows nearly 50% in impact, growth, and as an industry, how far you would be able to contribute!
  • CFP offers great income potential, as well. No, it’s not easy to get CFP certification. But nothing comes easy. You need to work hard for anything worthy of admiration. CFP certification not only helps you help more people, but it also helps you earn a high income.

What top companies have to say about CFP?

CFP is a qualification which many people don’t pursue. Maybe because there are many requirements or maybe they are not confident that they would go through it. CFP is a certification which takes all of you if you want to clear it. If you are a Chartered Accountant (CA), Certified Public Accountant (CPA), Chartered Financial Consultants (ChFC), or you hold similar qualifications, then you can directly sit for the CFP exam; otherwise, you need to go through other requirements which we have mentioned earlier.

Irrespective of the toughness of this certification, many people from top companies or top financial institutions have pursued it. Let’s see what they have to say about the certification –

  • Financial Fountains: You may not have heard about this company, but the founder & CEO of this financial institution, Lazetta Rainey Braxton, has done CFP, and she has incredible admiration for the course. Lanzetta says that CFP is a sort of accountability partner helping their clients reach their full potential in money matters. She says that you may feel that the requirements are sort of redundant, but the truth is, without those requirements, no CFP professional would be able to reach the standard CFP Board has set to serve the clients’ needs.
  • Ameriprise Financial: Financial Adviser and Associate Vice President of Ameriprise Financial, Jeff Crompton, thought that CFP would be easier to clear. But later, as he sat for classes, he realized that CFP is a different ball game altogether. And it’s not about only financial planning; CFP rather teaches one to be eligible for comprehensive financial planning. He also mentioned that he found only 6 people in his area who can position themselves as comprehensive financial planners and hold CFP and CFA qualifications.
  • Merrill Lynch: Dwight Mathis, Head of New Advisor Development, Merrill Lynch, says that Chartered Financial Planner is a premium, professional designation. It creates extraordinary value for people who join and complete the course. Thus, he said, CFP has become part and parcel of the development programs of Merrill Lynch.

From the above inputs, few things stand out –

  • CFP is a premium, outstanding professional course which prepares its students for career excellence in financial advisory
  • CFP is for people who are clear about financial planning and want to get ahead in the same industry and earn a good salary.
  • The curriculum of CFP is comprehensive, and it is not for the faint-hearted to attempt CFP.
  • CFP helps you position yourself well as a comprehensive financial planner who the clients can trust and do business with.

CFP Exam format

As we have already mentioned that you need to have some requirements (educational and in terms of experience). If you adhere to these requirements, you would be able to take the exam. There are few things which you need to adhere to in regards to how long the CFP exam is –

  • To clear the CFP certification exam, you needed to sit for a marathon exam previously. The duration of the exam was 10 hours. Out of 10 hours, you needed to take one, four-hour session on Friday, and another two sessions for three hours each could be arranged on Saturday. And you needed to answer 285 questions. But from November 2014, the examination format was changed. It is now 7 hours exam. Out of 7 hours, you need to take two 3 hours exam. In between, you will get a 40-minute break. Now, you need to answer 170 questions. It is significantly easier as you need only one level to clear.
  • The test would be a computerized test. The normal hours for the test are between 8 am to 5 pm. Exam fees are non-refundable. If you fail in the exam, you need to wait till the next window of the exam. You can attempt a maximum of 5 times in your lifetime. Candidates who have attempted the exam four or more times before January 1, 2012, will be permitted a maximum of two additional attempts. Once you complete the exam, you will be given a notification on the screen about pass/fail, and the candidates who have not passed will receive a diagnostic report of their exam performance report comprising of their strengths and weaknesses.

CFP Principal topics & Weightage 

In the exam, you need to answer 170 questions. Each question would be linked to the following principle topics. Along with the topics, there is also a percentage of weightage is given for each topic.

CFP certification subject weightage

The examination questions integrate tasks from the CFP Board’s list of Job Task Domains. These are as follows –

  • Establishing and Defining the Client-Planner Relationship
  • Gathering Information Necessary to Fulfil the Engagement
  • Analyzing and Evaluating the Client’s Current Financial Status
  • Developing the Recommendation(s)
  • Communicating the Recommendation(s)
  • Implementing the Recommendation(s)
  • Monitoring the Recommendation(s)
  • Practicing within Professional and Regulatory Standards

CFP Exam Registration Process

There is a simple four steps process of registering yourself for the CFP exam. Here it is –

  • Create a CFP Board online account at CFP.net/account
  • Login to your CFP Board account and complete the exam registration form
  • Submit payment of the exam registration fee
  • Schedule your testing appointment with Prometric

CFP Exam Fees

The structure of fees has been updated since March 2020. Now the standard registration fee is the US $825. But if you do an early bird registration, you will be able to avail of the discount. If you do the registration 6 weeks before the registration deadline, you will have to pay the US $725. At the same time, if you get late, you need to pay more. Suppose you do the registration just before 2 weeks (or during the final 2 weeks) of the registration deadline, you need to pay the US $925.

CFP Exam Passing Rate

There is not much difficulty in passing the CFP exam. In 2015 CFP exam results, the pass percentages for CFP students are 68.8% in March 2015, 70.3% in July 2015, and 64.9% in November 2015.

Let’s look at the percentages for 2012, 2013, and 2014 as well.

CFP pass percentage

So, you can understand that passing the examination is pretty easy than other certifications. But you need to adhere to the pre-requirements—all the very best for your 2016 CFP exams.

CFP Exam Study Material

Exam reference materials comprising CFP Exam Formulas, CFP Exam Tables, and Sample Exam Questions are provided.

Strategies to clear CFP Certification Exam

Follow the below strategies to crack CFP with flying colors –

  • To start CFP, you just need a Bachelor’s degree. But guess what, if you want to be a financial planner who can stand out, you should think ahead of anyone in your industry. Remember, who start first have the advantage over those who start in the middle or later in their career.
  • You need to enroll yourself for a course in a college which is sponsored by CFP. You can use three methods to do this. First, you can go to a classroom setting and complete your course. Or else, you can do it online. Or, you can do complete the course through self-study.
  • After 11 months of completing the course, you need to take the exam. The exam is hardest by far (it is mentioned by anyone who has attempted it the first time), so you need to take those 11 months really, seriously. You need to answer multiple-choice questions, but they are not easy to answer. You need to go in-depth of everything – from retirement planning to estate planning, from insurance to tax planning to answer the questions. So, work hard.
  • After you pass the exam, you need to adhere to the experience requirements. You need to have at least 3 years (6000 hours) of full-time experience in financial services, or you need to have 2 years of apprenticeship experience.
  • As most probably, you would be working while studying CFP, plan your study well. Remember, even if the passing rates are over 60% in every exam, it’s not easy always. You need to work hard and go deep to understand the series of financial planning materials related to tax, real estate, insurance, retirement, etc. And you have only 5 chances in a lifetime.

Conclusion

The secret to CFP is to choose when you feel that you need to stand out in the financial planning industry. Again CFP certification is not for every finance enthusiast. It’s for those who are interested in a career in financial advisory and certified financial planning.

This has been a guide to CFP Exam. Here we discuss what the CFP exam is, why you should pursue it, its fees, exam structure, passing rate, exam format, etc. You may also have a look at the following articles –

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Comments

  1. Lauren Dcruz says

    I really got something new to learn from this post, thanks for sharing such valuable information. I wanted to ask you a question that is what is the difference between CFP and CFA? Which is more beneficial?

    • Dheeraj Vaidya says

      Many thanks and I am happy to know that you got to learn something new from my post. There are several benefits of earning these both designations. you can have a look at its key differences CFP vs CFA