As financial planning continues its march towards becoming a globally recognized profession,
Accordingly, CFP certification has become a substitute for the Series 65 in many states, as attaining the CFP mark demonstrates not just core financial planning competency but also carries the responsibility of fiduciary advice. Further, it elevates a professional’s standing with the American public and within the profession.
It’s important to note, though, that CFP certification isn’t legally required for financial planners to ‘hang a shingle’ and practice financial planning – it is a completely voluntary certification. Requirements to practice financial planning are
Notably, though, sitting for the CFP exam requires only the completion of the CFP education coursework as a prerequisite, and in practice is often done before CFP candidates complete their Experience requirement. But because the CFP exam is a substantial (six-hour) exam, and only offered three times per year in specified one-week exam windows, it is important to have sufficiently studied for and be prepared to pass the exam when the time comes.
The CFP exam: What to expect
The first CFP exam was offered in 1991 and initially consisted of
Since then, it has evolved with the financial planning profession and was adjusted over the years (most recently in 2014) to what is now administered as a
The content spans the full range of
The exam is designed to confirm technical competency and to test one’s ability to apply that knowledge in practical scenarios. Exam questions are written by volunteer subject-matter experts in the field of financial planning.
CFP principal topics and their appropriate CFP exam weightings
The overall
How to prepare for the CFP exam
Like most things in life, creating a plan and sticking to it is vital, and the same is definitely true when it comes to preparing for the CFP exam.
Knowing your learning style will help
Everyone learns differently, and each person must determine what type of learner they are. There are
Determining your learning style will be especially important when preparing for an exam as rigorous and study-intensive as the CFP exam. Doing so will help you determine which materials will be most helpful in facilitating retention of both the material and helpful test-taking tips.
Many planners see this exam as a must-have credential. Want to ace it? Have a plan.
For instance, a kinesthetic learner may find it most helpful to spend large quantities of time practicing problems and working through relevant casework. They will likely find
Visual learners may find that attending a live review is imperative to their preparation. The review course offered by
Auditory learners will benefit from the ability to listen to, and re-listen to, the study material provided by the review course.
We often encourage candidates to
How CFP exam review courses can help students prepare for their test
A review course can be one of the most important ingredients of your study plan. We’re asked daily whether a review course is worth the investment and our answer is almost always, “Yes.” Review courses can be as simple as
Remember, technical expertise in financial planning and the mastery of a test-taking approach needed to pass the CFP exam are not necessarily the same thing. The purpose of a review course isn’t to teach you the material, but to provide you with the tools, structure, and perhaps some forced discipline to pass the exam. In other words, the true value of the review course isn’t necessarily in gaining the financial planning expertise (which ideally comes from completing the education component required for CFP certification), but in helping you focus on which topics are most likely to be tested and in preparing you for how those topics will be presented on the exam.
Further, considering that test takers are encouraged to spend between 150-250 hours studying for the exam, finding the right review course can help you properly allocate and focus your time on the most important material. Attaining the
The CFP Board provides a list of
Most review courses offer some combination of review material, practice questions, and feedback specific to your strengths and weaknesses. Some offer asynchronous review sessions or lectures, others offer periodic live review sessions, and others a condensed “live review.”
The table above details the offerings of some of the most widely recognized providers. For test takers who are looking for the most immersive preparation,
To decide which program will work best for you, spend some time researching each program and ask successful test takers in your network about their experience with the review course of their choosing. It may also be helpful to join the
Almost all of the review courses we’ve encountered offer some sort of “guarantee”, free retake feature, or additional coaching should your first attempt prove unsuccessful. Regardless of which review course you choose, it’s important to exhaust the provided materials and trust the study plan.
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Here are prep techniques and resources for candidates taking a test that can seem daunting.
October 28 -
The systems are expected to be updated by the end of April, following calls from financial advisors on social media to make a change.
January 29 -
Even as the numbers improve, Black and Hispanic advisors are still vastly underrepresented within the industry.
January 14
Getting started: Creating a study plan of action
Once a test date and review course have been chosen, it’s time to get started. You must now determine how much time you’ll need to allocate to preparing for the exam. After speaking with successful test takers across the nation, we encourage at least three to five months of focused study.
This will likely include studying at least 10 hours per week and should total between 150-250 hours. The CFP Board recommends studying for 250 hours,
The CFP Board offers a
It’s also important to be mindful of how much each topic is tested on the exam. This is vital to assign the appropriate amount of time to each core area of the exam, as illustrated in the graphic above.
For instance, candidates might consider allotting more time to study topics under General Principles of Financial Planning, Investment Planning, and Retirement Savings and Income Planning, since these areas are weighted the highest on the exam, with an approximate allocation of 17% each. On the other hand, Education Planning and Professional Conduct and Regulation, while both critically important areas, are weighted 6% and 7%, respectively, so the time spent studying for questions on these topics should be adjusted accordingly.
Many candidates overlook the general principles and professional conduct sections of the material. These sections cover the basic regulatory framework, the financial planning process, and the maintenance of the CFP mark. It is imperative that you get these questions right.
Further, don’t skim over the areas where you feel most comfortable. Nothing invokes panic during an exam as much as floundering on a question you ‘should’ know the answer to.
As you work through the study material, make sure you focus on learning – not just memorizing – the material. The exam tests your ability to apply knowledge more so than just having the knowledge itself. Make sure you understand the why in the correct answer. Further, work through as many practice questions as you can.
If your exam review course offers a test bank; exhaust it. If, after exhausting the review materials, you are still struggling to attain adequate scores on the practice exams, consider
Remember,
Final stage of preparation
As you get closer to exam time, you should have a solid grasp on the material, have taken multiple practice exams, and should be refining your knowledge in those remaining trouble areas. During the final two weeks, the heavy studying you did early on should be paying off, and developing confidence should be your focus.
At this juncture, it’s too late to cram. Take time to review the basics one last time and spend one final day on each topic area. Get plenty of sleep and don’t make the mistake of taking a practice exam the day before the real thing. Not only will you be mentally exhausted, but you also don’t want your confidence rattled this close to exam time.
If you have the option to take the day before the exam off, it may be a good idea to do so. Spend a couple of hours that morning reviewing concepts and do something relaxing that afternoon. Eating a healthy meal for dinner, going to bed early, and turning off screens will ensure you’re mentally prepared for the big day.
On the morning of the exam, be sure to allow plenty of time to get to the testing center. Eat a healthy breakfast and remember to pack a lunch. You will not be able to bring food or beverages into the exam so pack items you can leave in a vehicle or locker. Most Prometric sites offer locker storage for valuables that aren’t allowed in the test center. It would be wise to call ahead and ensure your center will have a locker for you. Remember, you’re entitled to a 40-minute break between the three-hour exam sessions. If you have a favorite candy bar or treat, put one in your lunch as a reward for completing the first half of the exam.
Once you sit down to begin the exam, take a deep breath, and relax. At this point, it’s all about focus and execution.
Indicators that can predict success or failure
We speak with hundreds of candidates every year who are successful in passing the CFP exam and many others who are not. We have found that candidates who are successful in passing the exam share the following characteristics:
- They commit to a structured study routine and maintain consistent discipline throughout the process;
- They prioritize their exam for at least three months and have ‘buy-in’ from their personal and professional support systems (e.g., their friends and family allow for and support their CFP Exam study time); and
- They focus on what they don’t know, rather than on what they do. It’s tempting to over-study for the topics you enjoy or are most comfortable with. We all love financial planning and never miss an opportunity to ‘nerd out’ on our favorite topic, but students must remember that the ultimate goal is to pass the exam. It’s important to go into the exam with a balanced understanding of the material. You will have the rest of your career to develop more nuanced expertise.
On the other hand, students who do not pass the exam typically demonstrate the following characteristics:
- They underestimate the difficulty and rigor of the exam;
- They do not take it seriously or feel forced to take it;
- They rely too much on professional experience and not enough on the review material;
- They spend too much time studying material they already understand; and
- They have too many personal and professional distractions to spend an adequate amount of time preparing for the exam.
It’s important to note that there is no single approach that guarantees you’ll pass the exam on your first try, but the aforementioned items are good indicators. There are certainly underprepared individuals who pass and well-prepared individuals who do not. Many intelligent, diligent, test takers fail the exam each testing cycle. Passage or failure of the CFP exam is not a permanent indication of your ability to thrive in the profession.
When to take the CFP exam
Deciding when to take the CFP exam is among the most important considerations of the process. It’s a question we get often: “Should I take the exam as soon as I complete the CFP exam coursework, or gain experience first?”
Like most answers to questions of this magnitude, it depends on the individual. Countless candidates have successfully completed the exam with both approaches. In general, for strong students graduating from a top-tier financial planning program such as the
On the other hand, for recent graduates who struggled with the coursework, those overwhelmed by responsibilities inside or outside of the office, or professionals who are still identifying the “why” in financial planning concepts, waiting to sit for the exam may be their best option.
It’s important, however, that the exam isn’t delayed for too long. Setting a goal to take the exam by a certain time (18-24 months out, perhaps) and then identifying tangible, short-term goals for the attainment of financial planning competency will be necessary.
For example, spending time in a financial planning firm (whether that’s a job, internship, or externship), developing a better grasp of the language of planning,
Once the aforementioned goals have been accomplished, it will be time to schedule an exam, complete a review course, and pass the exam. All of this, of course, is dependent on the individual and is a decision that should be made with the help of sincere counsel.
Speaking of counsel, surrounding oneself with a support system of friends, family, mentors, and colleagues can be an important ingredient for success. Programs like the
Another question that candidates often ask is “Should I take the CFP exam just to see what’s on it?”. Generally speaking, this probably isn’t the best approach. Not only does the CFP exam cost $925 (
One thing was made clear at the annual event: There’s more work to be done.
Furthermore, while the core of the CFP exam is consistent, each testing cycle is unique, and the questions can and do vary from one test to the next (e.g., there are 170 questions on the CFP exam, but the CFP Board has more than 170 questions to choose from and rotates the questions in any particular exam that’s offered). There is no guarantee that taking the exam in March will sufficiently prepare you for the exam in July. If you want a proxy on your “readiness,” consider taking the
Passing the CFP exam requires a great deal of commitment and requires the requisite work needed to build up the confidence and actually decide, with conviction, topass the exam. It is also better if you can tell potential employers that you passed the exam on the first attempt.
What to expect after the CFP exam
After completing your exam, you’ll receive an email from Prometric providing one of two results: a preliminary pass, or a diagnostic report of your performance.
Regardless of the outcome, plan something to help you decompress after the exam. This could be any activity of your choosing, dinner with friends and family, reading a book, or binge-watching your favorite show to give your mind some much-needed rest. Or perhaps consider taking the exam on a Friday so that you can plan a weekend getaway as a reward for the sacrifices you made while preparing for the exam.
Preliminary pass on the CFP exam
Congratulations! After months of study and sacrifice, you’ve taken a major step in your career. It’s time to share this moment with family, friends, mentors, and colleagues, as this is a huge milestone in your career.
Passing results are “preliminary” as they have to be reviewed and certified by the CFP Board before they become official. Sometimes a question may, after review, be removed and ultimately alter a person’s final score. According to the CFP Board, however, no one has received a “preliminary pass” only to receive an official result of “fail”; in other words, a preliminary pass won’t become a “fail,” but a “fail” could become a “pass” if a question you answered incorrectly is removed from the scoring.
You will receive official results approximately four weeks from your test date. Those who pass the exam do not receive a diagnostic report, only confirmation of passage. You do not immediately become a CFP certificant upon passage of the exam. You must still meet the experience requirement, pay the applicable fee, and meet the ethics requirement to use the marks.
Diagnostic performance report – minimum score not met
If you did not meet the minimum score to receive a preliminary pass, you will receive an official notification from the CFP Board and a Prometric diagnostic report of your performance in each topic area. This does not mean you don’t have what it takes to be a great planner, so don’t give up.
Set aside the diagnostic report and take a couple of days to process the results before charting a path forward. Many review material providers offer one-on-one counseling to help you tackle your next attempt at the exam and may allow you to take the review course again at a reduced rate or no charge.
Once you receive the official results, which will also take approximately four weeks from the test date, you can decide whether the time is right to take the exam again. The CFP Board’s
Successfully attaining the CFP mark is no small task. The coursework entails quantitative challenges and emotional nuance. Passing the exam requires shrewd discipline in both scheduling and focus.
The payoff, however, is well worth the sacrifice. Not only will you set yourself apart in the job market, but you’ll also find yourself one step closer to fulfilling the ultimate aspiration: using your financial planning knowledge to impact clients and help them achieve their goals.
