How to Pass the CFP® Exam
How to pass the CFP® exam is a big concern for candidates who are planning to earn the CFP® mark. The exam is definitely a challenge and is different from many other financial exams. In July 2021, the overall pass rate was 62 percent, and the pass rate for first-timers was 65 percent. In this article, you’ll learn about the exam and the steps you can take to pass. At the end, you’ll find additional tips you can apply throughout your preparation and on exam day.
About the CFP® Exam
The CFP® exam is a multiple-choice, computer-based exam. It is offered three times a year in March, July, and November at almost 50 locations nationwide, and it costs between $825–$1,025 USD (depending on when you register). The exam is given in a computer-based format and consists of 170 multiple-choice questions that test your financial planning knowledge in client situations. Each session is divided into two subsections. There is a 40-minute scheduled break between each session, and you may take an optional break between each subsection.
Follow these 5 steps to pass the CFP® exam.
1. Start studying early.
Getting CFP® exam-ready requires a major time commitment. CFP Board recommends you spend at least 250 hours studying for the exam. While that sounds overwhelming, the time goes pretty quickly between pre-study, the Candidate Handbook, required education courses, question bank time, review, practice exams, and your own preparations.
It’s important to think of preparing for the CFP® exam like training for a marathon. It’s not a situation where you can sprint (or cram). There’s just too much to learn, and you’ll need to be able to apply it to case studies. To be properly prepared for the exam, you need to have the space in your life to dedicate the necessary hours to study.
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2. Create a strategic and efficient study plan.
Given the hours and the amount of material to master, you should create a strategic study plan. Spending too much or too little time on any one activity can be detrimental to your preparation. Therefore, devising a study plan based on how CFP Board weights the exam topics is a good plan of action. The topics and their weights are:
- Professional conduct and regulation—8%
- General principles of financial planning—15%
- Risk management and insurance planning—11%
- Investment planning—17%
- Tax planning—14%
- Retirement savings and income planning—18%
- Estate planning—10%
- Psychology of Financial Planning—7%
You should learn the basics of each category first and then work deeper into the categories based on weight and your familiarity. This will enable you to absorb more detail and application.
3. Focus on learning how to apply what you know.
The CFP® exam is all about applying knowledge to real situations you could encounter on the job. There are two important case studies worth 20 percent of the exam. You must analyze a hypothetical client situation and determine the best next steps. Memorization alone won’t cut it in this section. Mastery of the material is important. But to do well, you must apply your knowledge to the given client information.
4. Practice, practice, practice.
Because the CFP® exam tests how you apply what you’ve learned in readings and classes, it is vital that you practice what you learn. You should answer the questions at the end of the chapters you read and take question bank quizzes and practice exams. The more you practice, the more familiar you will become with how to apply your knowledge. Exam prep providers and CFP Board offer practice exams you can take before your exam day.
5. Stay calm as exam day approaches.
Try to be at your mental peak for the exam. Use the day before the exam to reread some of the more wordy areas of the curriculum, like Ethics. Studying too hard or taking full practice exams the day before can mentally drain you. Few people sleep well the night before the exam, so make sure you get into a good sleep pattern leading up to it. A week of 7–8 hours of sleep each night, along with some exercise and relaxation, will help you get through exam day in good form.
Additional Tips on How to Pass the CFP® Exam
Here are a few tips and tricks that can also help you pass the exam:
- Focus on learning, not memorizing. The CFP® exam is all about how you handle real situations you could encounter on the job.
- Work with practice questions that have the same difficulty level as the actual exam. This can help you determine if you have truly mastered a particular domain and where you might be making mistakes.
- Don’t feverishly go over lists or answer tons of practice questions on the day before the exam. Instead, think about answering financial planning questions clients might ask. Then, stop about dinner time, just as if you were already in the office, relax, and have a good meal.
- Picture yourself doing well on the exam. Before a big exam like this, it’s natural to panic and worry about failing. Instead, visualize yourself answering questions competently and getting a great score. Positive affirmation can calm your nerves and put you in the right mindset.
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