CFP® Certification vs. MS in Personal Financial Planning: Everything You Need to Decide

By: Kaplan Financial Education
March 31, 2021
Two professionals trying to determine whether to earch a CFP certificate or an MS in Personal Finance

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.

CFP® Certification Overview

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 CFP® certification, you need to complete a CFP® certification program to be eligible to sit for the exam.

Get a sneak peak at the beginning of the Kaplan education program to get a feel for whether CFP® certification is right for you by downloading our free eBook. 

CFP® Exam

Offered three times a year in March, July, and November, the CFP® exam is:

  • A computer-based examination that takes six hours to complete and consists of 170 multiple-choice questions. The six hours are divided into two 3-hour sessions. Each session has two distinct subsections. There is a 40-minute scheduled break in between the sessions and you can take an optional break between the subsections.
  • Focused on testing your financial planning knowledge in client situations. The topics covered include professional conduct and regulation, general financial planning principles, education planning, risk management and insurance planning, investment planning, tax planning, retirement savings and income planning, and estate planning.
  • A significant time commitment. CFP Board recommends you spend at least 250 hours studying for the exam. You’ll need to pace yourself and avoid cramming because the exam asks you to apply knowledge to case studies. So make sure you have the space in your life to dedicate the necessary hours to study. Then, create a strategic study plan that includes a review program.

Requirements for Earning CFP® Certification

The other requirements for earning CFP® certification are:

  • A CFP Board-registered education program: CFP Board must be notified when you’ve completed it. You can’t take the exam without it.
  • A bachelor’s degree from an accredited university or college: You can hold the degree before you complete the education program and pass the exam or earn it afterwards. (You have up to five years after passing to get your degree.)
  • Financial planning experience: This can be professional experience (6,000 hours) in relevant personal financial planning activities, or apprenticeship experience (4,000 hours) that meets additional requirements.
  • Candidate fitness: CFP Board requires you to pass its Candidate Fitness Standards. To do this, you must agree to adhere to their ethical standards, disclose any criminal or employment termination history, and pass a background check.

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.

MS in Personal Financial Planning Overview

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.

MS in Personal Financial Planning Requirements

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:

  • Having a bachelor’s degree.
  • Having professional work experience (varies by school).
  • Completing additional program prerequisites (varies by school).

Some colleges and universities also require that you complete the GRE or GMAT with a satisfactory score.

Benefits of an MS in Personal Financial Planning

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:

  • An increase in earnings after completing the program.
  • More exposure to real-world scenarios and case studies.
  • Real-world critical thinking skills that you can immediately apply in your day-to-day occupation.
  • Depending on the institution, the choice of taking your classes online or in a classroom, as well as the option to attend full time or part time. 

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.

Who Says You Have to Choose?

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.

Ready to Get Started?

Get your financial planning career on the right track. Learn more about our CFP® certification offerings, or visit the College for Financial Planning website to explore MS degree opportunities.

Free eBook: Is CFP® Certification Right for You?

Are you considering CFP® certification, but are unsure if you can handle it? Get a sneak peak at the beginning of the College for Financial Planning®a Kaplan Company 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 FP 511: General Financial Planning Principles, Professional Conduct, and Regulation. It also includes several analytical problems that will allow you to apply your knowledge to real-life scenarios.