The Certified Financial Planner designation has come to be widely considered as the definitive mark of competence by investors and financial professionals. Many educational pieces available to the public encourage novice investors and clients to seek professionals who have earned this credential. Not only will the material learned from the CFP course curriculum increase a student's professional competence, but the prestige of holding the designation will likely increase his or her business as well. (This may be particularly true for those wishing to charge an hourly rate for giving financial advice.)

One of the main advantages that the CFP designation offers is the ability for a financial professional in any given field to better understand how what he or she does fits into a client's overall financial situation. Whether you are, or plan to be, a stock broker, insurance agent, tax professional, mortgage loan officer, banker or trust officer, you will benefit enormously from attaining the CFP designation. Read on to learn how to study for and attain your CFP.

What to Expect
Those who intend to enroll in one of the many accredited CFP programs available should have a good idea of what they're getting themselves into. It will take the average student at least 1,000 hours of study time to get through both the coursework and the exam, assuming that he or she passes the test the first time.

The exam covers five main components:

1. Insurance, including modules on education planning, ethics and the financial planning process
2. Investment
3. Tax
4. Retirement
5. Estate Planning

The test itself is 10 hours long and is broken up into one four-hour session on Friday and two three-hour Saturday sessions. During this time, the student must answer 285 multiple-choice questions, which include two comprehensive case studies. The case studies are designed to force the student to proactively apply the course material to a "real life" client or family.

The exam is given three times per year, in March, July and November, and the passing rate for each exam is typically 50 to 60%. Statistically speaking, the odds of a given student passing the test are highest for the first exam, and then diminish for each subsequent exam. It must be noted, however, that those numbers are somewhat skewed by a segment of students who continually retake the exam to try and pass it "cold" without adequate preparation. Therefore, students who do not pass the test the first time should not become discouraged.

Tips for Preparing for the Exam
Students who have passed other insurance or FINRA-administered securities exams may feel that those will serve as material preparation for the CFP exam; unfortunately, nothing could be farther from the truth. While some of the same material is covered on both types of tests, the knowledge required is applied quite differently for the CFP exam. Here are a few tips that will help you as you study:

1. Do not focus on memorizing concepts. Licensing exam tests simply quiz the test taker on his or her retention of the material. The CFP board exam demands much more of the student, requiring not only knowledge of the material, but also the ability to correctly synthesize and apply it to actual financial planning situations.

In fact, the methods of study used by many for licensing exams may be counterproductive when preparing for the CFP board exam. While there is a great deal of memorization required for both the former and latter tests, students who do no more than this to prepare for the CFP exam will be quite unprepared.

2. Learn the CFP board's reasoning. Many students will have difficulty understanding how the CFP board arrives at an answer that it considers to be "correct," as the student would never view the answer to a particular question that way in an actual planning scenario. The CFP board has a specific rationale that it uses to reason out the answers to its test questions, and this rationale must be understood and applied correctly by the student in order to pass the exam.

3. Aim to achieve the best grade possible. The exam itself also differs from licensing tests in that there is no specific percentage "grade," such as 70%, that must be achieved in order to pass. The student simply receives a "pass" or "fail" response in the mail a few weeks after the test is taken.

Strategies for Success
There are many different strategies that students may employ to increase their chances of passing the test. These include:

1. Answer every question. Ensure that you answer every question, even if it means guessing. You have a 25% chance of guessing correctly and a 0% chance getting the right answer if the question is simply skipped. Second, if you can safely eliminate one or two of the possible answers, your chances of selecting a correct answer increase significantly.

2. Keep your first answer your final answer. The student's first choice has proved to be the most accurate answer.

3. Know your taxes! In terms of overall coursework, most students without a background in taxation will agree that the tax section is the most difficult to learn and apply. A corollary of this is that lawyers and CPAs have the highest pass rate of any segment of students who take the exam. Therefore, it may be beneficial to learn the tax portion of the material before even beginning the CFP curriculum.

A good way to do this is to sit for the IRS Enrolled Agent exam, as the vast majority of the material from this test is also present in one form or another on the CFP exam. Students who employ this strategy will discover that doing so will help them when they reach the tax section of the coursework. It will also effectively "grease" the entire course for them in a sense, as each of the other sections covers the tax rules relevant to that section as well (i.e., the insurance section covers the taxation of insurance, etc.).

4. Enroll in a review course. Another key to passing the test for many students is taking one of the many review courses offered by coursework providers. These courses can be valuable to students who are struggling with assimilating the ocean of material that is covered in the coursework.

Instructors for these courses will often provide "inside" tips on how to reason through the case studies, as well as indicate how much attention will be given to certain test topics. For many students, knowing what information they can probably risk ignoring can be as helpful as knowing what they have to know.

There are many possible topics in the CFP board test bank that will not be tested or will be assigned very few questions. If students know which topics will fall into this category, they can use their time and energy to focus on more important topics.

To Cram or Not to Cram
Many students take up to five years to complete the entire curriculum of coursework that is required in order to sit for the CFP® board exam. While some will get through the material in a fraction of that time, all of them will face the same scenario when test day comes. Some exam prep manuals will instruct students not to cram or review for the test, but many students have benefited from doing so. Students should consider their respective levels of preparedness and short-term recall ability if they are contemplating this strategy.

Last Bits of Advice
As with any test, the student should get a good night's sleep beforehand, eat breakfast, wear comfortable clothes and be prepared for intensely bright lights and uncomfortable chairs.

While the amount of material that is presented within the course curriculum is intimidating, virtually any student who is able to assimilate that information can pass the exam. Very few people who pass the CFP exam ever regret the time they spent preparing for it, and many will say that doing so aided not only in passing the test, but also in developing a level of discipline that could be applied to other areas of their lives.

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