The questions most frequently asked about the CFP® exam and certification are answered in this article, equipping you with the information you need to plan for this next step in your career.
CFP® certification is a professional designation for financial planners. Also known as the CERTIFIED FINANCIAL PLANNER™ or CFP® mark, its governing body, CFP Board, administers the credential. With financial advising and planning estimated to be one of the top 10 fastest growing occupations, getting your CFP® mark can help set you apart in the industry.
The CFP® mark and CFA® charter are both the most prestigious designations in their respective fields, and each is administered by a governing body. To earn CFP® certification, you must sit for and pass one exam; the CFA Program exam has three levels. CFA charterholders commonly help individuals and institutions invest and allocate assets. A CFP® professional is likely to be a financial planner, wealth manager, or financial advisor. Our article about the CFP® mark vs the CFA charter has more details.
Both the CFP® certification and a master’s degree in personal financial planning lead to unique professional opportunities for those with a bachelor’s degree who want a career in personal finance and planning. But their requirements, topics of study, and their benefits are slightly different. To make a decision, you need to think about what you want to do long-term. This article compares the two options in greater detail.
CFP® professionals usually become financial planners or advisers, helping clients with investment decisions, taxes, and selecting insurance policies and retirement plans. While no two days will ever be the same, much of the work involves meeting with clients, analyzing financial information, and researching new opportunities.
Earning the CFP® certification involves the following steps:
The CFP® exam is a multiple-choice, computer-based exam. It consists of two 3-hour sessions separated by a 30-minute scheduled break. It is offered three times a year in March, July, and November at almost 50 locations nationwide.
Recruiters and prospective employers recognize CFP® certification as the most desired designation in the growing financial planning and advisor field. If your objective is a career as a financial planner or financial adviser, you should consider earning the CFP® mark, which means taking and passing the exam.
To sit for the CFP® exam, you will need to complete a CFP Board-registered education program first. After you complete it, CFP Board must be notified. Usually, your coursework provider will do that for you. There are no degree requirements to sit for the CFP® exam, but you will have to earn a bachelor’s degree within five years of passing the exam. You don’t need a sponsor to take the exam. Also, candidates often use a CFP® exam study package before they take the exam, but it’s not required.
It depends. If you have a securities or insurance license, the CFP® certification can be helpful if you would like to add planning to your repertoire. On the other hand, if you are a CFA charterholder, a CFP® mark might not be necessary. Interestingly, however, CFP Board allows CFA charterholders to sit for the exam without having to complete the education requirements. So, if you hold other financial designations, your best option is to consult with your firm about whether you should take the CFP® exam or not.
The CFP® exam is computer-based and administered at a Prometric testing center.
The topics covered on the CFP® exam include general financial planning principles, investment planning, retirement savings and income planning, risk management and insurance planning, tax planning, estate planning, professional conduct and regulation, and education planning.
The CFP® exam consists of 170 multiple-choice questions that test your ability to apply your financial planning knowledge to client situations. The topic weights break down as follows:
|Topics||% of Exam||# of Exam Questions|
|General financial planning principles||17%||29|
|Retirement savings and income planning||17%||29|
|Risk management and insurance planning||12%||20|
|Professional conduct and regulation||7%||12|
Most candidates spend between 250 and 300 hours studying for the CFP® exam, although there are reports that it took some candidates much more than that. The entire CFP® certification program, including CFP Board-required education, takes about a year.
The CFP® exam is not easy, which is one reason the mark is among the most respected certifications in the financial services industry. It includes two case studies, multiple mini-case problem sets, and standalone questions designed to assess your knowledge of financial planning concepts and how to apply them to specific situations. It requires a significant investment of time to be successful. But most of the time, failing the exam is the result of not preparing properly. If you put together a stellar study plan and are willing to invest in your exam preparation, you can increase your odds of passing.
There are three levels of pricing for the CFP® exam:
The most CFP Board says on the passing score for the exam is that it is based on a minimal competency level required to pass the exam, which is determined by CFP® professionals. In 2018, the overall pass rate was 60 percent, and the pass rate for first-time exam takers was approximately 64 percent.
Candidates who do not pass the exam on their first try can take it two more times in a 24-month period. You then have to wait a year before retaking it. If you don’t pass the exam after five attempts, you cannot take it again.
We hope this article answers your pressing questions about the CFP® exam and certification. If you’re interested in taking the exam, we have CFP® exam study packages. Or if you’re just starting out and need to complete the required education, explore our CFP Board-registered education program.
Preparing for the CFP® exam can be a daunting task. Making a CFP® exam study plan is the best way to ensure you use your study time efficiently and are ready to pass on test day. Download this free eBook to learn how to create a CFP® exam study plan that works for you.