Become a Certified Financial Planner

Becoming a Certified Choose a Financial Planner™ (CFP® ) requires education, work experience, and passing a certification exam. CFP®s may then give clients sound financial advice based on the CFP® Board's outlined code of ethics. Keep in mind that the CFP® designation is a registered trademark owned by Certified Financial Planner Board of Standards, Inc. CFP®s are not regulated by the SEC or other government entities, but trademark is restricted in use. If you are interested in financial planning, take the first step toward a rewarding and lucrative career.

Steps

Getting an Education in Financial Planning

1. Earn a bachelor's degree. Virtually every single financial planner certification program will require you to earn a bachelor's degree in any discipline before you can become certified in a financial planning program. Though there are no restrictions on what students should major in, a field of study related to business or finance might be a good subject to major in if you plan on pursuing a career as a CFP®. More and more undergraduate programs offer a major in financial planning, others offer a masters or PhD.
2. Research the requirements of the job you want to pursue. Before you decide which college to attend to earn your degree or certification, it may be worthwhile to look into the education and experience requirements of several jobs in which you are interested. This may help steer you toward an education program that can best help you achieve your professional goals. Some employers will even pay for your education.
3. Research CFP® programs. It's important to do some research before applying to a program in financial planning. While every program will cover the same basic material, each program differs in terms of teaching methods and duration of the course. Programs can range from simple certification and online courses to college or graduate degrees, and the specifics of each program are prescribed by that program's local accreditation guidelines. Distance learning programs and certificate programs typically cost less than college and graduate programs that require university enrollment. You can search for programs by location and by education level on the CFP® Board website. When determining which program is right for you, it may be worthwhile to consider:
   • Your current level of education and what your educational goals are.
   • Cost of attendance and certification in each program.
   • The levels of experience and education of faculty members at each program you're interested in.
   • Whether a program offers internships or job placement assistance after graduation.
4. Meet the education requirements. Whether you are pursuing a degree in financial planning or earning a certification, you will need to meet your program's specific requirements regarding education and experience. This may vary from program to program, but will generally require you to earn a bachelor's degree, take at least some coursework in accounting or finance, and take a college-level capstone course that addresses insurance, investment, income tax, retirement planning, and estate planning.
   • Regardless of what subject you major in, you will be expected to complete at least 18 semester credit hours of relevant course work. The exact courses may vary, with course titles like Financial Analysis or Estate Planning, but they should be courses approved by the CFP® Board for all students working toward a degree or certification in financial planning.
   • The advantage of earning a degree in financial planning through a Board-certified college is that your education will cover every applicable aspect of financial planning, and will give you a broad base of knowledge and expertise in the field upon graduation.
   • For more information on education requirements, please see the CFP® Board's website.
5. Consider meeting the requirements through advanced education and training. There are several ways to get around the educational requirements of attending a CFP® program, but all of them require extensive education and training. Please note that each of these alternate paths still require candidates to complete a capstone course, pass the CFP® Board exam, conduct a background check, and pay certification fees.
   • Earning a doctorate in either business, economics, or business management would satisfy the educational requirements of the CFP® Board.
   • Becoming a licensed attorney would also satisfy the educational requirements of the CFP® Board.
   • Completing the educational requirements and credentials of a certified public accountant (CPA), a chartered financial analyst, a chartered financial consultant, or a chartered life underwriter would also satisfy the educational requirements of the CFP® Board.
6. Earn working experience. In order to become Board certified in financial planning, graduates must complete two years of hands-on working experience with financial planning duties. This work must be at full-time employment status and must involve either working directly as a financial planner, as an assistant to a financial planner, attorney or CPA, or as an educator who teaches financial planning in an academic position. Candidates can find a comprehensive listing of open positions at the CFP® Board's website.
   • Three years, or 6,000 hours, of full-time qualifying work are required to meet the Board's experience requirement.
   • Work experience must fall under at least one of the six experience categories outlined by the board: establishing relationships with clients, compiling client data, reviewing and evaluating client financial information, developing and presenting financial planning recommendations for clients, implementing financial planning recommendations for clients, or monitoring the success of clients' financial actions.
   • Work experience must also meet at least one of the five types of experience: personal delivery to clients, supervision of personal delivery to clients, direct or indirect support of personal delivery to clients, teaching CFP® Board courses or finance-related university courses, or internships/residency programs.
   • The experience requirements may be met by an alternate course of action in which the candidate completes two years or 4,000 hours of full-time apprentice work. The apprenticeship must be under the direct supervision of a CFP® professional and must include experience in all six experience categories outlined by the board.

Passing the CFP® Board Exam

1. Understand the information required. After completing the educational requirements of your CFP® schooling or certification program, you should have a basic understanding of the course material. Though passing the exam requires much more than this, it's important that you review and understand the material you've been taught during the course of your studies. The main areas of study that may be covered include, but are not limited to:
   • General principles and theory of financial planning
   • Insurance planning
   • Investment planning
   • Income tax planning
   • Retirement planning
   • Estate planning
   • Interpersonal financial communication
   • Professional conduct and fiduciary responsibility of financial planning
2. Read and understand case studies. Case studies are an important part of the CFP® Board's certification exam, and can also be complex, as they typically are accompanied by at least eight to ten pages of background information. This group of questions will force the student to consider a case with limited information and draw conclusions based on broad financial concepts. Case study questions may require the student to interpret whether a hypothetical client's portfolio was sound or risky, for example, which would require a working knowledge of each type of investment in that portfolio and being able to evaluate the risks versus rewards of each investment type given the overall characteristics of the portfolio.
   • Remember that the case study questions posed on the certification exam are not necessarily real-life scenarios. Many of these questions will require students to contemplate and respond to the academic considerations of the case, which may differ from real-world advice that the student would give to an investor.
3. Sign up for review sessions. A review course can help make sense of some of the more theoretical concepts that will be covered in the examination, and should offer guidance in how a student can work through the more complex case study questions on the exam. Your college may offer these courses, or you may need to seek them out by searching for available review courses online. Check the CFP® Board's website for more information.
4. Commit to the time requirements. The CFP® exam takes 10 hours to complete and is broken into three sessions. The first test session is four hours long and the following two sessions are each three hours long. There are 285 multiple-choice questions total, and each testing session will include one case study with between 55 to 60 questions based on that case.
   • Be sure to schedule your exam well in advance. The exam is only given three times each year: in March, in July, and in November.
   • There are 50 test centers with locations across the United States.
   • For international students, the Board exam is overseen by the Financial Planning Standards Board (FPSB), a nonprofit, independent organization that develops standards and practices for certification on an international level. The FPSB operates in over 20 countries and territories around the world. For information on testing and standards outside the United States, please visit the FPSB website at www.fpsb.org.
5. Be prepared. The test is exceedingly difficult, with a typical passing rate among CFP® students of 50 – 60%. By some estimates, students who plan on taking the exam should spend at least 1,000 hours of study time in preparation for the test. It's important to budget your time during the exam and follow some basic test-taking strategies.
   • Don't spent too much time memorizing concepts. The exam is thorough and comprehensive, and it requires students to be able to analyze a set of data and draw informed conclusions from the information provided. It is not merely a test of one's ability to memorize material, as many academic and licensing exams require.
   • Answer every question on the exam. Even if you don't have a clear answer to a given question, you can narrow down your choices by eliminating improbable answers and improve your chances of answering the question correctly.
   • Don't second guess yourself. In many studies, the first choice a student makes in answering a question is most often the correct answer. Once you've chosen an answer, stick with it and move on to the next question.
   • Prepare for the tax section. Many students find that the tax section can be the most difficult part of the exam, with the exception of students who have a formal education in tax law. Because of the difficulty of this section, lawyers and certified public accountants who take the exam have the highest rate of passing among CFP® students, so don't underestimate how difficult this important test section will be.
6. Retake the exam if necessary. If you fail the test, you may retake it during the next testing window. You may take the exam up to three times within a 24-month period, after which it is mandatory to sit out a year before trying again. There is a lifetime maximum of five attempts to pass the test. The fee is the same each time you take the exam.
7. Complete a background check. After completing the educational requirements, accruing the necessary experience, and passing the Board exam, CFP® candidates must pass the Board's Fitness Standards for Candidates and Professionals Eligible for Reinstatement. This involves a thorough understanding of the ethics of financial planning and requires candidates to complete a background check. Passing the background check is a required part of certification, and failure to pass this character review could result in a candidate being permanently denied CFP® certification.
   • Candidates who have any criminal history or civil court violations will need to disclose these incidents on the CFP® Certification Application. The CFP® Board will then review the matters disclosed on the application and determine how to proceed with the candidate. Candidates who are granted certification in spite of criminal activity may need to repeat this process each time the CFP® certification is renewed.
8. Pay your certification fees. Once you've met all of the other requirements, you will be required to pay a certification application fee of $125, and every year following your certification you must pay an annual fee of $325 to maintain certification..

Taking Alternative Career Paths

1. Take the CFP® Board exam with a "challenge status" provision. Applying for a challenge status provision allows you to take the CFP® Board's certification exam without necessarily having completed the prescribed educational requirements. If you've completed one of the alternate education and career paths that satisfies the Board's educational requirements, you may be able to take the exam on the grounds that your previous coursework could be considered equivalent or compatible with the board's requirements.
2. Take a college-level training course. Once you've completed the education and examination requirements, you can take a CFP® capstone training course at a local college. This is an important step because it makes certain that you have the required knowledge and skills that would have been learned in a CFP® educational program. Just be sure that the capstone training course you enroll in has been approved by the CFP® Board.

Finding Work as a CFP®

1. Determine your areas of expertise. There are many options available once the certification process is completed. The first thing to consider for recently-certified graduates is what specific areas of financial planning you want to work in. Whether your areas of interest lie in retirement planning, investment strategies, or any of the other aspects of financial planning covered in your education and work experience, it's important to narrow down what your specialty will be in order to best market yourself to firms and clients alike.
2. Consider working with specific clientele. Some CFP®s market themselves to a specific niche clientele that they want to serve. For example, some CFP®s prefer working with doctors, recently-divorced investors, or the LGBT community. Though it's not a required step, working with a niche group of clientele can be helpful when it comes to branding yourself and your services.
3. Decide what kind of CFP® job you want. Once you've been certified by the Board, you have a lot of options in terms of where you want to work. Do you prefer working for a firm, or would you be more comfortable working with a large corporation? What about one-on-one work? CFP®s can work for any number of employers, and even have the option of starting their own business. Recently, Certified Financial Planners™ may want to begin the job hunt by browsing the CFP® Board's Online Career Center.

Tips

• Enroll in a test prep course to increase your chances of passing the CFP® exam.
• Before getting started, do informational interviews by contacting CFP®s in your area. This is a good way to learn about what the day-to-day is really like.
• Join a trade organization, such as the Financial Planning Association (FPA) and attend local chapter meetings. You can meet and talk to CFP®s as well as join a committee; some chapters have committees dedicated to those new to the profession and/or students.

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