How to Become a CFP

Prepare for the demanding CFP® Certification exam

The best way to serve your clients as a financial planner is to offer sound advice based on current financial fundamentals. A CERTIFIED FINANCIAL PLANNER™ designation signifies your dedication to the profession and your commitment to providing clients sound guidance.

The Executive Education Program for CFP® Certification is a registered program of the CERTIFIED FINANCIAL PLANNER™ Board of Standards, Inc. Upon successful completion of this certificate program. Students are eligible to apply for the CFP® Certification Examination.

 

CFP Board owns the marks CFP®, CERTIFIED FINANCIAL PLANNERTM, and CFPR

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Choose Your Path to Certification

Here are some of the most common paths to CFP® certification. Typically, it takes 18-24 months to become a CFP® professional, but the certification process offers flexibility so you can make it work for you.

Step 2. Meet the Minimum Education Requirements: Bachelor’s Degree or Higher

The CFP requires that all certified planners possess at least a bachelor’s degree from an accredited institution. Unusually, you do not have to earn the degree before registering for or taking the CFP Examination. Instead, you have five years from the date of passing the exam to satisfy the bachelor’s degree requirement.

The board doesn’t require that you hold a degree in a specific field, either, but it does have strict requirements for certain course elements that align with the CFB Board’s nine major personal financial planning areas. These can be satisfied outside of your bachelor’s program, although they do include bachelor-level courses:

  • Professional Conduct and Regulation
  • General Principles of Financial Planning
  • Education Planning
  • Risk Management and Insurance Planning
  • Investment Planning
  • Tax Planning
  • Retirement Savings and Income Planning
  • Estate Planning
  • Financial plan development (capstone)

Selecting the Right Bachelor’s Program

If you haven’t earned your bachelor’s yet, it’s wise to choose one that is CFP Board registered since that will eliminate any guesswork and give you the assurance that all the required curriculum components are there.

Already Hold a Bachelor’s?

If you already hold a non-registered bachelor’s degree, you can satisfy these requirements as part of a separate post-bachelor’s certificate program specifically designed for CFP candidates and offered through many colleges and universities.

You’ll need to have a total of at least 18 semester hour credits in qualifying topics from a U.S. regionally-accredited four-year institution to meet the requirements. If your bachelor’s is in or related to business or finance and you believe it likely covered some or all of the necessary curriculum, it’s also possible to ask the Board for a transcript review to obtain full or partial credit toward the coursework requirement. The classes must be upper-division and will typically cover topics like retirement planning, personal financial planning, and investments.

Alternatively, for the most ambitious future planners, master’s degrees are also available that satisfy these requirements.

Fulfilling CFP Coursework Requirements with Other Credentials

The CFP Board also accepts certain existing credentials as fulfilling part of the course requirements. Although these do not generally fulfill the entire obligation, they may be accepted in lieu of certain required courses:

  • Associate of the Society of Actuaries
  • Certified Employee Benefits Specialist
  • Enrolled Agent
  • Fellow of the Society of Actuaries

Required Financial Planner Education

Becoming a financial advisor requires at least a bachelor’s degree. Some employers seek a bachelor’s in accounting, business, law, or economics. Financial planner education includes coursework in taxes, investments, and risk management.

To pursue the certified financial planner credential, each candidate needs a bachelor’s degree. Formal finance and accounting coursework prepares students for the optional CFP exam. Although not required, a master’s degree in finance, accounting, or business administration can help financial planners qualify for advanced job opportunities and higher salaries.

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What Is a Chartered Financial Analyst (CFA)?

Financial professionals holding this charter designation have tested skills and expertise in portfolio management, investment analysis, financial reporting and specific business concentrations. With more than 175,000 active charter holders in 2022, this designation is globally recognized as a “gold standard” for financial analysis.

This designation is given by the CFA Institute, an international organization that specializes in certification programs for investment professionals. Candidates must pass three exams that cover a range of finance topics, including accounting, money management, security analysis, and others.

The institute says that candidates invest more than 300 hours of study to pass each of the three exams. Only 38% of those who take the first exam pass in May 2022, while 44% and 49% pass the second and third exams respectively. Candidates pay a $450 one-time enrollment fee.

CFAs specialize in relationship and wealth management, credit analysis, trading, accounting, auditing and financial planning. They typically help clients make data- or research-based decisions on investments, estate planning and insurance product, among other short-term and long-term financial planning goals.

What work experience does a CFP need?

Along with the education requirements, a CFP needs 6,000 hours of relevant experience in the financial planning field or 4,000 hours of apprenticeship experience under the supervision of a licensed CFP professional. The CFP Board requires you to have experience that shows you can provide financial planning independently, and you can get this experience in a variety of ways. For example, you could get an internship, participate in the Financial Planning Association Residency Program, support or supervise the financial planning process, teach classes related to financial planning or work with clients directly.

The CFP Board may want to know that you can successfully:

  • Build a professional relationship with the client

  • Collect information about the client and their financial goals

  • Evaluate the client's financial status

  • Make recommendations for financial planning

  • Enforce the recommendations

  • Monitor the recommendations

Which Financial Certifications Boost Income?

The certified investment analyst designation seems to. According to an Investments & Wealth Institute-commissioned survey, the financial advisors who are members of CIMA practices (defined as having at least one practice member with a CIMA certification) report earning a higher annual income compared to financial advisors who are members of practices with no CIMA certification. Some 12% of advisors at CIMA practices earn more than US$380,000, compared to 3% of advisors at practices with no CIMA designation.A CPA also seems to offer a good return on investment. While the median salary of an accountant is $73,560 per year, according to the Bureau of Labor Statistics, senior CPAs with over 20 years of experience could command an average of $150,000 annual salary, according to Accounting Today magazine and the American Institute of CPAs.

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Step 5. Accept the Board Ethics Requirements

Because working as a financial planner involves a high degree of fiduciary responsibility to clients, to standards established by FINRA’s Series 65 or 66 licenses, CFPs are obligated to adhere to high ethical standards as outlined in the CFP Board’s Code of Ethics and Standards of Conduct.

In addition to agreeing to adhere to that code, you’ll have to make an ethics declaration to disclose your involvement in certain types of regulatory, financial, or commercial matters that may impact your fitness and objectivity. The CFP Board will also conduct a detailed background review of candidates for the CFP. You’ll be asked to provide or give your permission for the Board to obtain certain documents in order to expedite this review.

Meeting Conduct and Fitness Standards for the CFP Credential

The ethics requirements are just lip-service if not backed up by action. Your conduct has to match your commitment, and this pertains to certain conduct that may have occurred even prior to your application for the CFP. You will either be barred from certification or de-certified with any of the following on your record:

  • Felony convictions for:
    • Theft, embezzlement, or other financial crimes
    • Tax fraud or other tax-related crimes
    • Murder or rape
    • Any violent crime within the past five years
  • Revocation of a financial professional license (unless revocation is administrative in nature)

Additionally, you may be barred for any of the following events:

  • Two or more personal or business bankruptcies
  • Revocation or suspension of a non-financial professional license
  • Suspicion of a financial professional license
  • Felony conviction for non-violent crimes occurring within the past five years
  • Felony conviction for violent crimes occurring more than five years ago

2. The CFP Exam

How hard is it to become a CFP® professional?

How hard is it to become a CFP® professional? First, you need to have specific coursework under your belt to qualify for the CFP® exam. Some degree programs will include this, but you typically need to take additional courses if you have a degree in a related field.

Craig Allen, CFP® professional and finance adjunct faculty at SNHU, recommends looking for a program that offers a financial planning concentration that qualifies you to sit for the exam as you obtain your bachelor’s degree.

Obtaining this defining industry credential can set you apart and accelerate your career, even when you have just a few years of experience. “(The CFP® mark) gives you a leg up, and shows you did the work and have the knowledge,” said Jennifer Facini, a CFP® professional and adjunct instructor at SNHU. “It builds trust.”

Facini also recommended getting a mentor, not only to help prepare for the exam but for career development. She suggested exploring the mentor program offered on the Certified Financial Planner Board of Standards, Inc. website, which can include test prep, free resources and networking opportunities.

How to Prepare for the CFP® Exam

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. You are given the exam in two 3-hour sessions with a 40-minute scheduled break between the two sessions. Each session includes two subsections and you may take an optional, unscheduled break between the exam subsections. Preparing for the CFP® exam requires a significant 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, a review class, practice exams, and your own review preparations.A great way to approach preparing for the CFP® exam is to think of it 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. So, you make sure you have the space in your life to dedicate the necessary hours to study. Then, create a strategic study plan. A great way to structure your plan is to mirror the exam weighting, which the CFP Board updates based on regular job task analysis. At the same time, you shouldn’t start off by studying the most heavily weighted topics in depth. Instead, learn the basics of each category first. Then, work deeper into the categories based on weight and your familiarity with them, so you can absorb more detail.

Experience Requirement

To qualify for CFP® certification, you must also complete either 6,000 hours of professional experience as a financial advisor or related to the financial planning process, or 4,000 hours of apprenticeship experience. You can fulfill the experience requirements either before or after you take the exam.

Bottom Line

CFA and CFP certifications are both common for financial advisors. For prospective clients, working with an advisor who has one or the other may not make a huge difference. Both certification programs teach applicants how to handle someone’s financial future.

If you are considering a career in finance and want to add a certification to your resume, then it’s worth figuring out exactly what you want to do. CFAs typically work more in the field of financial analytics and investing, while CFPs usually focus on financial planning with individual clients. Keep in mind that getting a CFA is also a longer process with more exams.

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.

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The Steps You Need to Take To Become a CFP

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Before you can even apply to the CFP® program, you have to satisfy the preliminary education requirements. At the point in my career, I decided to pursue the CFP® certification, I was more than five years removed from college, with my Bachelor’s in finance, so I easily satisfied the education requirement. Currently, the CFP Board allows three different paths to achieve these requirements. Taken directly from the website:

Complete a CFP Board-Registered Education Program

  • There are more than 300 academic programs at colleges and universities across the country from which to choose.
  • These programs include credit and non-credit certificate programs, undergraduate and graduate degree programs.
  • They use various delivery formats and schedules, including classroom instruction, self-study, and online delivery.
  • Many of CFP Board’s Registered Programs also offer in-house educational programs for individual companies.

Academic degrees and credentials which fulfill the educational requirements include:

  • Certified Public Accountant (CPA) – inactive license acceptable
  • Licensed attorney – inactive license acceptable
  • Chartered Financial Analyst® (CFA®)
  • Doctor of Business Administration
  • Chartered Financial Consultant (ChFC)
  • Ph.D. in business or economics
  • Chartered Life Underwriter (CLU)

Request a Transcript Review

Certain industry credentials recognized by CFP Board, or the successful completion of upper-division level college courses, may satisfy some or all of the education requirements set by CFP Board.

Bachelor’s Degree Requirement

A bachelor’s degree (or higher), or its equivalent,1 in any discipline, from an accredited college or university2 is required to attain CFP® certification. The bachelor’s degree requirement is a condition of initial certification; it is not a requirement to be eligible to take the CFP® Certification Examination. After you pass the CFP® Certification Examination, you will be required to provide evidence (official transcript from the degree-granting institution) you hold a qualified bachelor’s degree or higher degree. Jim Blakenship, CFP® and author of Getting Your Financial Ducks in a Row, shares his experience on achieving the CFP® designation:

I took the American College Chartered Financial Consultant (ChFC) course which fulfilled the education prereq. The ChFC course was provided by my employer at the time (an insurance company). I followed this up with a CFP self-study course from Dalton.

Then I went to a two-weekend live review from Dalton. The Dalton courses were much more useful than the American College course, in my experience.

The CFP® Certification Examination was by far the most challenging exam I’ve ever taken (and hopefully ever will) take

The two day, 10-hour exam applied all the key areas of comprehensive financial planning. Although all questions are multiple choice, they are arranged in a way where every question “almost” sounds right. That’s what makes the test so challenging.

The exam is administered three times a year – generally on the third Friday and Saturday of March, July, and November, at about 50 domestic locations.

I took mine at the University of Missouri-St.Louis in November of 2007. The application deadline is approximately seven weeks prior to each exam date (e.g., February 1, June 1, and October 1).

To apply to take the exam, complete the online application, download an application, or call 800-487-1497 to have one mailed to you. Completed applications, including payment of the $595 fee, must be received by the deadlines printed on the applications – there are no exceptions.

How I Prepared For the Exam

My previous firm had an arrangement with Kaplan University which offered a “boot camp” style class. Once a month, for nine months, I traveled to St. Louis to sit in on a four-day (8 a.m. – 6 p.m.) lecture. I’ve never drank more Diet Coke and coffee in my life!

Our instructor was insanely smart and helped us trudge our way through all the concepts. Imagine learning about estate planning for 9+ hours a day. Are you jealous, yet? After all the sessions, we then had a final recap with a different instructor a month before the actual exam. If you can’t do this, there are other options for CFP prep courses to get your through.

Reflecting back, I really don’t know another way I could have absorbed so much information in such a small amount of time. If I had to do the CFP program by self study, I would probably still be without the designation (no joke). Richard T. Freight, CFP® who also authors the blog Think Beyond the Numbers, confirms my suspicions by sharing his experience with the CFP self-study program:

“After failing to discipline myself with self-study, over the course of 3 years I took the individual courses (5 in 1998) at 3 different community college and universities, often traveling an hour each way, twice a week, to pass the exams. Then I took Ken Zahn’s “blitz” 3-day course to pass the overall exam.

I know it sounds like the old walking uphill both ways to school in the snow, but it wasn’t a cakewalk by any means. My overall exam had a pass rate of 49% across the U.S. that year.”

Test Results

I sat for the exam in November of 2007 and didn’t receive my test results until early January. Talk about suspense. I just happened to be home the day when the mail came.

I remember seeing the thin, little white envelope from the CFP Board and my heart sank. Why was the envelope so thin? Was it a bad sign? I nervously paced inside and finally just ripped the envelope open….Congratulations you passed.

I screamed with excitement and then called my wife to share the good news. Typically, each testing period has about a 50% pass rate and this was about the same with my group. This is why I was so thankful I passed. When you receive notice you passed, you then have to satisfy the remaining requirements.

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In March of 2007, I began the Kaplan University CFP® course. At that time, I had been a financial advisor for already five years, which satisfied the experience requirement. The CFP Board requires you have at least three years of qualifying full-time work experience. According to the website, the experience can be gained in a number of ways including:

  • the delivery of all, or of any portion, of the personal financial planning process to a client.
  • the direct support or supervision of individuals who deliver all, or any portion, of the personal financial planning process to a client.
  • teaching all, or any portion, of the personal financial planning process.

Joe Pitzl, CFP® shares how he got a head start in completing his experience requirement:

“To get a head start on fulfilling my experience requirement, I held three financial planning internships and filed tax returns in a tax firm for two years while in school (it counted for about a year collectively). I then worked for a year as a full-time financial planner before taking and passing the exam. Six months later, I had officially fulfilled the 3-year requirement and became a CFP®.”

4

Applicants for CFP® certification must pass CFP Board’s Candidate Fitness Standards, which describe conduct which may bar an individual from being certified. This is one of the aspects which makes being a CFP® professional so much more prominent; we are held to a higher standard than your typical financial advisors.

The board will conduct a background check as you make your commitment to adhere to the CFP Board’s Code of Ethics and Professional Responsibility and Financial Planning Practice Standards. Brian Plain, CFP® shares a similar accelerated approach to achieving his designation:

“Apparently I’m a glutton for punishment as I fulfilled my education requirement through the accelerated 9-month program at Northwestern and then did a 4-day live review course prior to taking my exam…for the first time.

Getting the “fail” letter in the mail was deflating, but it was also made me appreciate the experience so much more when I received my “pass” letter the next time I sat for the exam. Needless to say, I still have the letter!”

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After you verify those three steps, it’s time to pay up (yeah, the $595 fee from before was just to apply). You’ll have to pay a one-time, non-refundable initial certification application fee of $100 for the background check. In addition, you will be responsible for a biennial certification fee of $360.

To me, this cost is minimal, compared to the amount of knowledge I have gained through the whole process. Jason McGarraugh, CFP® gives a detailed account of his path to becoming licensed:

“I went the Degree Plan rout. After spending 4 years getting a BBA in Corporate Finance at Texas Tech I graduated without any of the Financial Planning knowledge that I wanted. Circa 2000 I discovered that Texas Tech actually had a Masters program in Financial Planning.

I spent 2 1/2 years working on my Master of Science in Personal Financial Planning which included the necessary CFP® courses with additional classes to round out the degree plan. After graduating I spent a semester working for a private school in Singapore that taught the CFP® courses there.

I moved back to Lubbock in May of 2003 and began the two month live review with the professors at Tech to prepare for the July exam. I made enough money In Singapore to pay for the review and a few months of rent with some friends that were also taking the review. I studied 6 days a week for two months and passed the exam on the first go round.

I probably put in about 250 hours of study and class time. I made it a point to take one random day off a week to relax. It took about a month to get the results back and during this time I was interviewing for jobs.

By early October 2003 I was fully licensed for insurance and securities and working with Waddell & Reed in Fort Worth, TX (plan B). I reached my 3 years in October of 2005 thanks to 12 months of experience as a Peer Financial Counselor with Tech’s Red to Black program.”

6

Once everything is complete, you will get a notice you are officially a CFP® and you can refer to yourself as one. After making it this far, you deserve it.

Now it’s time to order new business cards and make the appropriate updates to your website. I never thought I would be so excited over “three little letters” but all the time invested to achieve those letters makes them extra special.

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Once you pass the exam, you’re not done, however. Every two years you’ll have to satisfy continuing education requirements to keep your CFP® credentials. The CE requirements consist of:

  • 2 hours from a CFP Board-approved program on CFP Board’s Standards of Professional Conduct.
  • 28 hours from one or more of the accepted subject topics.

It’s up to you where and how you complete the CE requirements, you just have to make sure it’s a pre-approved program by the CFP board. There are plenty of resources nowadays to do this. One of my favorites is mini quizzes found in trade journals such as Financial Advisor Magazine and the Journal of Financial Planning. It’s always nice to learn something new and get credit for it, too!

Are you still considering becoming a financial planner? Think you’re ready? Keep reading.

What are some tips for becoming a CFP?

Consider following these tips to pursue a career in financial planning:

  • Connect with other aspiring financial planners. By building a network of professionals, you can share tips for pursuing the CFP certification and learn about employment opportunities in the field. Consider joining the Financial Planning Association (FPA) or the National Association of Personal Financial Advisors (NAPFA).

  • Find a mentor. A mentor who has undergone the CFP certification process can offer guidance on studying for the CFP exam and completing the board-registered program. You can also learn how to search for a CFP position after you become certified.

  • Attend conferences. Attending a national or regional conference can help you expand your network and build your financial planning skills.

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