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Beginner’s Guide to CPWA Certification Exam

Updated on April 15, 2024
Article bySayantan Mukhopadhyay
Edited byAshish Kumar Srivastav
Reviewed byDheeraj Vaidya, CFA, FRM

CPWA Certification

CPWA certification is not for everyone. Let us have a glimpse of a few facts about the CPWA examination, and then go into detail: –

  • Do you know that CPWA certification is structured to address the wealth management of enormous net-worth individuals of about $5 million or more?
  • Did you know that to achieve the final certification of CPWA or Certified Private Wealth Advisor®, you must spend a week at the University of Chicago Booth School of Business?
  • The courseware of CPWA is quite dynamic. It consists of four parts – Human Dynamics, Wealth Management Strategies, Client Specialization, and Legacy Planning.
  • Certified Private Wealth Advisor certification is not for everyone. An aspirant must have experience handling high net-worth clients (we will discuss this later).
  • CPWA is offered by Investment Management Consultants Associations (IMCA).
  • Fees for CPWA are higher than any other course in the financial domain. It is more than $7000, subject to some exceptions.
  • The volunteers of IMCA design CPWA to address the challenges faced by professionals in managing the wealth of high net-worth individuals. This article will cover everything that you need to know about CPWA. If you have a few minutes to spend, consider reading this article completely, so you do not need to go anywhere to learn about CPWA.
CPWA Certification Exam

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Let’s get started.

About CPWA

Few courses in the financial domain deal with the life goals of high-net-worth individuals. The ultimate motto of all economic systems is teaching students to learn the subjects. Nevertheless, while designing CPWA, volunteers understand that only topics and concepts are not needed for makeable wealth managers. Thus, Certified Private Wealth Advisor® is unique. CFA and CFP are reputable financial certifications that deal with wealth management. But, CPWA is the best in creating wealth managers of high net-worth individuals.

  • Roles: CPWA is designed for people who are advanced professionals. It will enable the skills and expertise to help them deal with their challenges while handling high net-worth individuals. Thus, it is not for every finance professional.
  • Exam: To become a CPWA, you need to do the following: –
  • Meet all the eligibility criteria to be accepted for the program.
  • Complete six months of online pre-study.
  • Complete an education program.
  • Pass a certification examination.
  • Sign a license agreement.
  • Satisfy ongoing renewal requirements.

The candidates may appear for an exam at the end of each class by pencil and paper or delivered by computer at more than 190 AMP assessment centers established throughout the US and Canada. There are no deadlines, but the candidates should meet the prerequisites. For international locations, exams are scheduled for candidates on a first-come-first-served basis.

CPWA certification examination includes a four-hour exam. In addition, you need to answer 125 multiple-choice questions and ten non-scored pre-test questions.

  • CPWA Exam Dates: The exam dates for Certified Private Wealth Advisor® are scheduled by the candidates. Once IMCA confirms the eligibility of the candidates, AMP sends a postcard and a detailed email about the website and a contact number to schedule for the examination. Candidates may go to goAMP.com and click “Schedule/Apply for an Exam.” Alternatively, candidates may also call AMP at 888-519-9901 to schedule an examination appointment.
  • The nitty-gritty: You must study hard to clear the CPWA exam. The aspirant candidates need to cover a lot – specifically four core papers and 11 subjects (details are given in the following section).
  • Eligibility: All candidates are required to follow the below-given pointers to be eligible under CPWA certification –
  • Fill up and submit an application that includes contact information, work experience (including five years of financial services experience), and disclosure of complaints and regulatory actions. Once you apply, a background check will be conducted by IMCA’s legal staff.
  • The candidates need to pay the appropriate fee with the application valid for two years. Then, the application is reviewed to verify the prerequisites and the program requirements. Later, candidates are notified stating if the application is accepted or denied. If the application is rejected, applicants can appeal within 60 days of non-acceptance of the application (it is called a notice of appeal). Within 30 days after notice of appeal, the applicants need to explain why their applications should be accepted.
  • After the application acceptance, the applicants must complete a classroom education program.
  • There would then be a second background check. Hereafter, candidates have to sign and submit a license agreement agreeing to adhere to IMCA’s Code of professional responsibility and rules and guidelines for using the marks.

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Why Pursue CPWA Certification?

There are specific reasons that decide to pursue CPWA. However, as mentioned before, not every finance professional should follow CPWA. It is for a selected few, and candidates must understand this while submitting their application and the rigorous pre-requirements need to adhere to. Moreover, you need to have at least five years of experience in financial services to apply for Certified Private Wealth Advisor®.

Below are the reasons for pursuing CPWA. If the reasons mentioned below do not match, reconsider the decision.

If the aspirants have experience handling high net-worth individuals over $5 million, they need specific strategies to manage and increase their wealth. CPWA is customized to become a master strategist in managing the money of high net-worth individuals.

  • On completion, CPWA can help clients deal with minimizing costs, monetizing and protecting assets, maximizing growth, transferring wealth, developing and protecting human capital, legacy planning, and understanding family dynamics, including conflict and entitlement issues.
  • The candidates gain specialized knowledge on analyzing the courseware of CPWA certification. Many candidates observed that their ability to handle clients had improved immensely after pursuing a course under CPWA. The wealth management market is very dynamic and constantly changing. CPWA will prepare to deal with this vibrant, complex, & challenging environment.
  • As mentioned, CPWA is not a cup of tea for everyone. One requires credibility to be accepted for this certification and completion. Moreover, this is the best course for wealth management in the world. Candidates who pass are among the top difference makers in the financial market.
  • To complete the CPWA certification, one must spend at least a week at the University of Chicago Booth School of Business. According to candidates, it is one of the best parts of CPWA certification.
  • The candidates will be an authority in maintaining ethics. They also understand the value of professional ethics; to get CPWA certification must adhere to IMCA’s code of professional responsibility.

What top companies have to say about CPWA Certification?

  • Mike Johnson, the Plante Moran Financial Advisors Partner, advises financial professionals to get certified under Certified Private Wealth Advisor®. According to him, candidates with high net-worth clients who need a holistic approach to their wealth can help them with CPWA certification. He observed that CPWA certification helps financial advisors absorb the CFO’s mentality to solve various issues of high net-worth clients. Now, the question arises- why should one listen to Mike? Here’s why. Mike is of Plante Moran Financial Advisors, managing a firm that handles a gamut of $9 billion of assets. Plante Moran Financial Advisors has 16 partners, seven relationship managers, and a total of 112 staff that provide financial services to high net-worth clients.
  • Kevin M. Sanchez, a Senior Institutional Consultant of UBS Institutional Consulting, mentions that CPWA certification facilitates in-depth education on the issues that high net-worth individuals face and manage their investment portfolio. In addition, certified Private Wealth Advisor® helps solve family dynamics, transitioning a business, unique tax situations, and complex estate planning. He added that CPWA certification escalates any financial advisor’s knowledge to do a great job consulting their clients.
  • Helen Moody, the Executive Vice President of Focus Wealth Management, Ltd. Virginia says that CPWA certification has taught her very much since she decided to enroll. She cleared CPWA in 2011. As per her observation, CPWA certification has led her to “deal with a lot of very big moving pieces for high net-worth clients with complicated situations.” Her firm Focus Wealth Management, Ltd., serves over 115 families. The average net worth of those families is $5 million to $10 million, and their investments range from $1 million to $3 million. So, one can understand why it is important to follow up with her regarding CPWA certification.

CPWA Exam Format and Exam Weights/Breakdown

CPWA exam format is unique. The candidate must attempt the exam for four hours and answer 125 multiple-choice questions and ten non-scored pre-test questions. Each question will be related to an area of work performed by a private wealth advisor. To prepare questions, volunteers conduct a job analysis of the tasks of private wealth advisors. Every question will provide four options to choose from; candidates need to find the correct one from the four. There are many types of questions that may come in the examination: –

  • One best response
  • Direct question
  • Incomplete statement
  • Complex multiple-choice
  • Situational Set

The purpose behind asking these questions is to ensure that candidates have all the skills, knowledge, ability to calculate complex problems, and the capacity to recall. The candidates who successfully answer these questions are those whose judgment in dealing with complex, dynamic issues should be trusted.

Now, let us look at the core papers and their corresponding subjects. These papers and subjects are the results of a job analysis of the tasks of private wealth advisors. Therefore, online pre-study education programs and readings should cover these subjects and topics.

We have also mentioned the percentage of subject coverage in each paper and related subjects.

Let us get started.

Exam Weights

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Human Dynamics (15%)

Ethics (5%)

In Ethics, a candidate may learn –

  • Knowledge to act and develop recommendations, knowledge to disclose all the information, learning to provide clients with the necessary material information, knowledge of the actions essential in protecting confidentiality, knowledge of full compliance, ability to maintain a high level of professional, ethical conduct, knowledge of the rules in case of violation of a code of professional responsibility and skill to apply a code of professional responsibility to specific client situations.

Applied Behavioural Finance (5%)

In this, a candidate may learn –

  • Knowledge of the history and evolution of behavioral finance and neurological research and the relevance to financial decision-making.
  • Knowledge of behavioral biases and how they may impact client decision-making.
  • Knowledge of investor personality types and how they may impact client decision-making.

Family Dynamics (5%)

In this, a candidate may learn –

  • Knowledge of resources and skills required to identify issues and opportunities relative to family dynamics, skills to identify and assess collective and individual values, goals, and objectives of family members; knowledge of key family roles and positions, skills to identify issues or unique situations, skills to identify family conflicts and dynamics, skills to develop a family education plan, knowledge of elements necessary to conduct a successful family meeting, skills to help clients develop a family mission statement and understanding of when and how to incorporate the appropriate family office infrastructure.

Wealth Management Strategies (33%)

Tax Strategies and Planning (14%)

In this, a candidate may learn –

  • Knowledge of tax rate structures, income tax calculations for individuals, estimated tax requirements, tax implications, tax issues, alternative minimum tax (AMT), planning implications, income tax deductions and limitations specific to charitable giving, etc.
  • Skills to review and interpret tax forms, calculate charitable deductions in light of limitations, identify planning opportunities associated with maximizing interest deductions, skills to calculate the tax liability of an option exercise, etc.

Portfolio Management (12%)

In this, a candidate may learn –

  • Knowledge of tax-aware investment strategies, understanding of the impact of investment taxation on long-term wealth accumulation, knowledge of techniques for harvesting tax losses or gains, knowledge of the process of calculating after-tax return assumptions for portfolio modeling purposes, etc.
  • Skills to calculate tax efficiency measures and after-tax returns, skills to implement tax-loss harvesting strategies, skills to figure expected after-tax returns for various asset classes or categories, skills to evaluate equity’s after-tax performance, and fixed-income managers, etc.

Risk Management and Asset Protection

In this, a candidate may learn –

  • Knowledge of insurance coverage types for the unique activities and assets of high net-worth clients, self-insurance as a strategy, knowledge of creditor protection strategies, etc.
  • Skills to identify common gaps in coverage for high net-worth clients, compare insurance policy pricing and structures, skills to explain and compare various entities for asset protection purposes, etc.

Client Specialization (30%)

Client Focus: Executives (10%)

In this, a candidate may learn –

  • Knowledge of the planning implications of stock option award programs, understanding the tax planning implications of exercises of both incentive and non-qualified stock options including basis, holding periods, and AMT, knowledge of how to calculate and execute cashless activities.
  • Skills to develop an option exercise strategy for incentive and non-qualified option awards appropriate to client objectives, skills to create the right plan incorporating risk and reward analysis, etc.

Client Focus: Closely Held Business Owners (10%)

In this, a candidate may learn –

  • Knowledge of the financing issues associated with closely held businesses at various stages of a business lifecycle, knowledge of closely held business succession and exit strategies, knowledge of different valuation methodologies for the sale of the company, etc.
  • Skills to initiate conversations on family dynamics relative to closely-held business succession planning, determine which buy-sell agreements and determine which buy-sell deals are appropriate based on entity structure and intended exit strategy.

Client Focus: Retirement (10%)

In this, a candidate may learn –

  • Knowledge of asset accumulation planning strategies, tax treatments of distributions from various retirement plans, understanding net unrealized appreciation (NUA) rules and applications, etc.
  • Skills to conduct a capital needs analysis for retirement, calculate the required minimum distribution (RMD), skills to determine asset placement among various tax-deferred and after-tax accounts, etc.

Legacy Planning (22%)

Charitable Giving and Endowments (7%)

In this, a candidate may learn –

  • Knowledge of rules for and taxation of donor-advised funds, regulations, and taxation of contributions to and distributions from charitable lead trusts, and knowledge of unrelated business taxable income (UBTI) about the operation’s taxation or investments of a private foundation, etc.
  • Skills to identify whether a given charity is public versus private, skills to determine the tax character of the property being donated, skills to plan charitable contributions to maximize deductions based on client goals, etc.

Estate Planning and Wealth Transfer (15%)

In this, a candidate may learn –

  • Knowledge of incapacity planning strategies, the concept of powers of appointment, the various aspects of post-mortem planning, etc.
  • Skills to evaluate a client’s current estate plan, assess the best course of action for lifetime gifts vs. transfers at death, understand and interpret estate planning documents, etc.

CPWA Exam Fees

Concerning fees, a candidate needs to pay the following for the registration for the CPWA program –

  •  Application.
  • Tuition for a six-month pre-study, including textbooks and all online materials in the e-campus.
  •  Five-day tuition and in-class program at The University of Chicago Booth School of Business.
  • If in-class programs, board, and room fees.
  • The exam fee on the first attempt.
  •  The certification fee (the certification fee is valid for two years). For recertification, a candidate must repay the exam fees.

If you are an Investments & Wealth Institute® member: $6,995, new members: $7,390, certification program: $6,995, annual membership: $395, and for non-members: $7,995.

CPWA Pass Rate

As the passing score changes every year, there is no information about how much percentage passed or failed. The passing score is decided by using the Modified Angoff Method. It is applied during the performance of a passing point study by a panel of experts. Experts evaluate each question to determine how many correct answers are necessary to demonstrate the knowledge and skills required to pass that examination section.

CPWA Study Material

The institute provides all textbooks and online materials for six months of pre-study.

Strategies to Pass the CPWA Exam

As it is not like any other financial course, you need to be an expert in the field. The job of CPWA is to clear the rust and dust from an aspirant’s already established skill-sets and experience. So, we can imagine why CPWA certification requires five years of work experience in financial services. All need to possess a reliable method of pursuing CPWA and prepare well to clear the exam in one attempt.

This article has been a guide to CPWA certification. Here, we have discussed the CPWA exam, why you should pursue it, its fees, passing rates, exam format, etc. You may also have a look at the following articles: –

Reader Interactions

Comments

  1. Tabish Silvia says

    Very informative piece of work. Great work sir. Sir will you please explain me the differences between CPWA and CIMA. I am really very tired of searching these certifications. Please guide me with some study material. Thanks in advance

  2. Bruno Cole says

    Thanks for providing this useful information. I was searching for this since long time but finally found it in your website thanks for sharing this article.

    • Dheeraj Vaidya says

      Many thanks Bruno! And I am glad you found this useful.