CFP Exam (Certified Financial Planner)

If considering a career in CFP, think about the following facts: -

• Which globally recognized financial planning course is offered under $700? If the answer is ‘nothing,’ here is the right answer – CFP.
• As most people think CFP is easier than any other financial course, remember that candidates 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 was around 67%.
• A survey by CFP Board found that 85% of candidates consider CFP certification the critical step for their career, 95% mention that CFP offers adherence to professional standards, and 97% say that as financial planners, ethical code of conduct is essential, which is CFP.
• To gain CFP certification, candidates must adhere to 4 E-Education, Examination, Experience, and Ethics.
• CFP Board has been serving students for more than 30 years. As this board is a non-profit, the prime focus of the CFP Board is to generate extraordinary value for its students.

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

Let us see first what CFP certification is all about: -

If a candidate is in mid-career, they may have met many financial planners who promised to support them. In reality, they back themselves in the pursuit of helping you candidates reach financial goals. But, CFP is different. The foremost criterion of Certified Financial Planner certification is ethics. Thus, all financial planners with CFP certification can trust them with financial goals. If anyone wants to be one yourself, they will also learn strict guidelines for maintaining ethics.

• Roles: After getting certification as a Certified Financial Planner, options would be much broader. From retirement planning to tax savings, one can accomplish almost anything within the preview of financial planning and work as a financial manager, risk manager, estate planner, retirement planner, etc.
• Exam: Since November 2014, has changed the examination format. Now, the exam duration is 7 hours, including the 40-minutes mid-break. Out of 7 hours, candidates need to perform 2 hours- 3 hours exams. The candidates are required to answer 170 questions. Significantly, it is easier as only one level is required to pass.
• CFP Exam Dates: To allow students to opt for the CFP exam innumerable times within a year, the CFP board designs three exam windows each year. Therefore, candidates can appear for an exam in March, July, and November.
• Nitty-Gritty: In CFP certification, candidates need to study only five subjects to go deep on every topic and understand the 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: -
  1. Completing college or university-level coursework through a program registered with CFP Board, addressing the major personal financial planning areas.
  2. Verifying that candidate holds a regionally accredited college or university’s bachelor’s degree or higher certification. One must complete the coursework before appearing for the CFP certification examination. However, candidates may meet the bachelor’s degree requirement after passing the exam (within five years). For example, suppose candidates want to get certified as CFP professionals. In that case, they need to have three years of full-time professional experience regarding financial services, or else need to have two years of apprenticeship experience that meets the requirements.

CFP is a certification that helps people to plan their finances well. In the USA, the average age of the population is 36.8 years. Thus, the need to reach their retirement age with a good net worth is a priority. Moreover, there are issues with unemployment that none can ignore. CFP opens doors for professionals and offers many opportunities. Let us see some substantial reasons for which aspirant candidates should pursue the Certified Financial Planner exam with all hearts: -

• Whether it is agreeable or not, cost matters. If candidates want to follow the course and are not in a convenient range, do they do it all themselves? The answers may vary. But in CFP, candidates will receive – a world-class course along with a reasonable fee and easy to pay. They need to pay $700 for this course. Still worried about the curriculum? Read on and understand why it is one of the top-rated courses in the world.
• If candidates have suffered through financial issues or seen someone suffering from it, they know how it feels. CFP does not only offer a lucrative career opportunity, but through this career, one can help many people adjust their sails of finance and increase their savings and net worth over time. How will it feel to have someone trustworthy to manage financial aspects? The candidate can offer the same trust and benefits to all their clients and help them succeed in their finances.
• CFP is a very thought-out course. Nothing has been added to the curriculum to sell the program. As it is already mentioned, CFP has four E-Education (approved curriculum), Examination (comprehensive exam), Experience (3 years practical experience or two years of apprenticeship experience), and Ethics (strict code of conduct). What is more needed in a professional, global qualification? If a candidate is a graduate and thinking of pursuing a different career, they can try CFP as it would help to strengthen core values and teach practical tools to thrive in a career of financial planning.
• CFP is not so professional that it stalls over time. For example, it is expected that the financial planning career path will grow by 41% in 2016. Think about it. If a candidate becomes a CFP and every year it grows nearly 50% in impact, growth, and as an industry, how far they would be able to contribute!
• CFP has great income potential. But it is not easy to get CFP certification as nothing comes without effort. It needs to work hard for anything worthy of admiration. CFP certification helps candidates help more people, and it also helps you earn a high income.

CFP is a qualification that many people do not pursue. Maybe because there are many requirements, or perhaps they are not confident going through it. CFP is a certification that takes all of the strength if any candidate wants to pass. A candidate, if they are a Chartered Accountant (CA), Certified Public Accountant (CPA), Chartered Financial Consultants (ChFC), or hold similar qualifications, can directly appear for the CFP exam. Otherwise, they need to meet other requirements mentioned earlier.

Irrespective of the toughness of this certification, many people from top companies or top financial institutions have pursued it. Let us see what they have to say about the certificate: -

• Financial Fountains: Candidates may not have heard about this company, but the founder and CEO of this financial institution, Lazetta Rainey Braxton, has pursued CFP. She has incredible admiration for the course. According to Lazetta, CFP is an accountability partner helping their clients reach their full potential in money matters. She adds that a candidate may feel that the requirements are redundant, but in reality, without those requirements, no CFP professional can reach the standard CFP Board has set to serve the clients’ needs.
• Ameriprise Financial: Financial Advisor and Associate Vice President of Ameriprise Financial, Jeff Crompton, thought the CFP exam was easier to clear. But later, as he appeared for classes, he realized that CFP is a different ball game altogether. And it is not only about financial planning; CFP teaches one to be eligible for comprehensive financial planning. He also mentioned that only six people in his area could position themselves as comprehensive financial planners and hold CFP and CFA qualifications.
• Merrill Lynch: Dwight Mathis, Head of New Advisor Development in Merrill Lynch, believes 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, a few things stand out: –

• CFP is a premium, outstanding professional course which prepares its students for career excellence in financial advisory.
• CFP is for candidates determined about financial planning and wants to establish 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 candidates position themselves as a comprehensive financial planner they can trust and do business with.

As mentioned earlier, you need to have some requirements (educational and in terms of experience). If candidates adhere to these requirements, they will take the exam. There are a few things that candidates need to adhere to considering the duration of the CFP exam: -

• To clear the CFP certification exam, candidates previously needed to appear for a marathon exam. The time of the exam was 10 hours. Out of 10 hours, they needed to take one four-hour session on Friday, and another two sessions for three hours each arranged on Saturday. And it was required to answer 285 questions. Since November 2014, they have changed the exam format. Now, it is a 7 hours exam. Out of 7 hours, candidates need to take two 3 hours of exams. In between, they will get a 40-minute break. And they need to answer 170 questions. Significantly, it is easier as it requires only one level to clear.
• The test is a computerized test. The normal hours for the examination are between 8 a.m. to 5 p.m. Exam fees are non-refundable. If candidates fail the exam, they need to queue till the next window of the exam. They can attempt a maximum of 5 times in your lifetime. Candidates who have tried the exam four or more times before January 1, 2012, will be permitted two additional attempts. On completing the exam, they notify pass/fail on the screen. The candidates who have not passed will receive a diagnostic report of their exam performance report comprising their strengths and weaknesses.

In the exam, candidates need to answer 170 questions. Each question is linked to the following principal topics. A percentage of weightage is given for each subject and the main concepts.

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 fulfill 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.

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.

The structure of fees has been updated since March 2020. Now the standard registration fee is $825. But if a candidate registers early, they can avail of the discount. For example, if a candidate completes the registration six weeks before the registration deadline, they will pay $725. At the same time, they are required to pay more if they are late. Suppose the candidate does the registration just before two weeks (or during the final two weeks) of the registration deadline. They need to pay $925.

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

Let us look at the percentages for 2012, 2013, and 2014.

So, candidates should understand that passing the examination is easier than other certifications. But they need to adhere to the pre-requirements—All the very best for your 2022 CFP exams!

Exam reference materials comprising CFP exam formulas, CFP exam tables, and sample exam questions are provided.

Follow the below strategies to crack CFP with flying colors: –

• To start CFP, candidates need a bachelor’s degree. But, if they want to be a financial planner who can stand out, they should think ahead of anyone in their industry. Remember, those who start first have the advantage over those who start in the middle or later in their career.
• Candidates must enroll themselves in a course in a college that CFP sponsors. To do this, they can use three methods. First, they can go to a classroom setting and complete their course. Second, do it online. Otherwise, they can complete the course through self-study.
• After 11 months of completing the course, candidates need to take the exam. The exam is the hardest by far (it is mentioned by one who has attempted it the first time), so they need to take those 11 months seriously. The candidates need to answer multiple-choice questions, but they will not be easy to answer. They need to go in-depth about everything – from retirement planning to estate planning, from insurance to tax planning to answer the questions. So, all candidates are required to work hard.
• After passing the exam, the candidate must adhere to the experience requirements. They need to have at least three years (6000 hours) of full-time experience in financial services, or they need to have two years of apprenticeship experience.
• Most candidates work while studying for the CFP exam; they need to plan well. Remember, even if the passing rates are over 60% in each exam, it is not always easy. They need to work hard and understand the financial planning materials related to tax, real estate, insurance, retirement, etc. It offers five chances in a lifetime.

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

This article has been a guide to the CFP Exam. Here, we have discussed the CFP exam, why you should pursue it, fees, exam structure, passing rate, exam format, etc. You may also have a look at the following articles: -

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