If you are considering a career in financial planning, a special designation can help you set yourself apart from the competition and boost your career. But, which career path makes more sense for you: CFP® certification or an MS in Personal Financial Planning? Both lead to unique professional opportunities for those with a bachelor’s degree who want a career in personal finance and planning. But how they cover the topics of personal financial planning, their requirements, and their benefits are slightly different. To make a decision, you need to think about what you want to do long-term. In this article, we break both options down for you.
The CERTIFIED FINANCIAL PLANNER™ (CFP®) mark enables finance professionals to help individual clients create comprehensive plans for meeting their long-term financial goals, such as retirement, college tuition, business start-up, a home, and so on. Its governing body, CFP Board, administers the credential. In 2017, CNN Money reported that CERTIFIED FINANCIAL PLANNER™ jobs are expected to grow 30 percent over the next 10 years, making it an excellent career option for young financial professionals. To earn the designation, you need to complete certification coursework, pass an exam, and meet other specific requirements.
Offered three times a year in March, July, and November, the CFP® exam is:
The other requirements for earning CFP® certification are:
CFP® Certification Benefits
The benefits of earning the CFP® mark include a rewarding career that involves a relatively low investment (anywhere from $900 to $7,000 plus exam fees) compared to the tuition for a master’s degree program. The most common careers include financial planner, wealth advisor, estate planning specialist, trading and research associate, financial consultant, financial representative, or financial analyst. If you want to become a branch manager at a financial firm, CFP® certification can help you achieve that level in your organization as well.
Offered by colleges and universities (such as the College for Financial Planning), master’s degree programs go deeper into personal financial planning subject matter. These programs cater to those interested in expanding their knowledge beyond typical financial licensing and credentials. Also, for those interested in becoming financial planning educators, the MS is the next step on that career path.
Compared to CFP® certificants, master’s degree students are exposed to the greater impact that finance has on an organization. Participants often gain a deeper grasp of the processes used by firms to maximize shareholder wealth, analyze financial statements, and hold management or C-level positions in financial institutions.
For an MS in Personal Financial Planning, the college or university is the governing board, although many are registered with CFP Board. Like any degree program, and unlike CFP® certification, it does not all hinge on one exam. You will take individual classes and be expected to pass the exams for each. The common curriculum will include some required and some elective courses in international finance, corporate finance, financial institutions, money and markets, risk management, and investment theory. You can also earn the CRPC®, APMA®, and AWMA® professional designations, among others.
You will also be expected to meet all the degree requirements of the college or university. Generally, this includes:
Some colleges and universities also require that you complete the GRE or GMAT with a satisfactory score.
Although a graduate program is more expensive than CFP® certification, it still costs less than many other graduate programs (as low as $15,000). Other benefits of earning the MS can include:
Which is Right for You?
Choosing between CFP® certification or a master’s degree program isn’t always easy, especially for financial planning. The roles you are eligible for are similar, as are the types of companies that are likely to hire you: financial services firms, mutual fund companies, brokerage firms, insurance companies, banks, and so on. There are some differences, however.
The CFP® mark is definitely respected as an achievement milestone. If you aspire to a financial planning career right after you earn your degree (or even before), you can use your CFP® certification to gain experience at a large financial firm or insurance company. These firms know that CFP® professionals are preferred by clients. In fact, a recent CFP Board study revealed that 69% of surveyed consumers said they would insist that their financial planner have the CFP® certification. This is a main reason why many companies will offer financial assistance to anyone interested in earning the CFP® mark. In addition, CFP® certification often tips the scales in your favor if you are up against an equally qualified candidate who is not credentialed.
An MS in Personal Financial Planning tends to take you farther in your career. Graduate degrees impress—they demonstrate a desire to specialize in a topic and become an expert in a field. Therefore, companies perceive those with an MS in Personal Financial Planning as having deeper knowledge of financial analysis and theory. They are likely to climb the ladder in a company faster or even start out with a better position because they have completed an in-depth curriculum and, in many cases, may have held a financial planning role as an intern while earning their MS. There are a few companies that forego offering tuition assistance for CFP® certification in favor of an MS because they perceive that it’s a better long-term investment.
As you ponder the benefits of each, ask yourself what your long-term goals are. If you’re anxious to start your financial planning career, or you don’t have the time or resources for graduate school, earning CFP® certification is a good option. If you are seeking a position where you can apply investment theory and analytics to planning, or you would like to educate others in the field, the MS might be right for you.
There is a third option: earning both the CFP® mark and an MS in Personal Financial Planning. A CFP® professional with an MS in Personal Financial Planning will have the competitive edge in any career opportunity. Customers will trust someone with CFP® certification, and financial firms will be more likely to view them as management or executive material. Therefore, colleges and universities who offer an MS in Personal Financial Planning often offer CFP® certification education as part of the degree. In addition, if you are already a CFP® certificant, there are a few select colleges and universities, such as the College for Financial Planning and Kansas State, that will credit that education toward your MS degree.
Are you considering CFP® certification, but are unsure if you can handle it? Get a sneak peak at the beginning of the Kaplan education program to get a feel for whether CFP® certification is the right fit for you. This free eBook will provide you with information about the financial planning process learned in Course 101: General Financial Planning Principles, Professional Conduct, and Regulation. It also includes several analytical problems that will allow you to apply the knowledge you learn in real-life scenarios.