How can potential financial advisors prepare best for their CFP certification exams?

By embracing the best training and study programs that can hike their chances of passing the exam.

The CFP exam is the gateway to becoming a Certified Financial Planner, and is one of four criteria CFP candidates must pass earn their designation (along with ethics, education and experience).

"In my experience the exam presents the one 'unknown' element of the certification process," says professor Craig Lemoine, CFP, at The American College in Bryn Mawr, PA (the school has been training financial services professionals for more than eight decades).

Lemoine says that in 2012, the CFP exam changed from a topic-based format to a domain-based on, meaning that the exam is based on eight key wealth management domains, such as obtaining clients and collecting investment research data.

"Domains are similar to steps in the financial planning process, like establishing a client relationship or gathering data," he adds. "Candidates should know that domain-based questions can be more difficult to study for than an exam comprised of prescribed financial planning topics. Students looking for their best chance of passing the exam should study from programs which have embraced domain models in their textbooks and curriculum."

Here are some other tips on studying for the CFP exam:

Build a Study Program around Test Dates
The CFP exam, which costs US$595 to take, is administered by the Certified Financial Planner Board of Standards, Inc., and is given every third Friday and Saturday in March, July and November.

The exam covers a variety of topics, the most common of which are investment planning and retirement planning, including estate planning, general principles of financial planning, insurance planning and risk management, and employee benefits planning.

The only academic requirement to take the test is that the applicant holds a Bachelor's degree. Additionally, the CFP applicant must declare he or she will complete five-year qualifying work related to the investment management field. An applicant must also possess three-year’s worth of investment industry experience to take the exam.

Ask the Right Questions First
Since only 50-60% of applicants pass the CFP exams, choosing and following the best study guides and courses isn't a luxury, it's a necessity.

According to the Certified Financial Planner Board, CFP exam takers can choose from a variety of study sources (although it does not endorse any study guide or service), including certificate programs, brick-and-mortar training courses or interactive study courses.
Choosing a Program
When choosing the program that best fits your needs, the CFP Board advises asking – and getting answers to – the following questions before signing on the bottom line:

• What educational level is your curriculum (junior/senior baccalaureate, master's or doctorate level)?

• How long does it take to complete your curriculum?

• How much does your program cost? Does that amount include books, tests and other fees?

• Are you anticipating making changes to your program?

• How do you schedule your courses? How often are courses offered?

• Is your distance education program offered online or is it paper-based?

• What are the credentials of your faculty?

• Does your program have internships or job placement services?

• Overall, how will your program prepare someone to be a financial planner?

Focus on "Questions-Based Training"
Lemoine advises CFP candidates study and complete discrete, set and case style practice questions. "The questions and specific financial planning topics on the actual exam change with each administration and are not known to academic programs or review providers prior to taking the test," he says. "However, students can learn the style of the exam by solving practice questions."

Consider Online Courses
Lemoine's favorite CFP preparation study strategy is interactive online learning, such as in-person web courses, which he things are a great fit for professional students. "These programs allow students to interact directly with an instructor and can be archived in case the student misses a session," he explains. "Brick and mortar may be too rigid for some working professionals. I personally want a program to be rigorous while maintaining relevancy."

Go Price Shopping – but Shop for Value
Most CFP study guides and programs aren't cheap, but in some cases you may have to pay more or risk getting what you pay for. For example, Dalton Education, one of the leading providers of educational study services, charges over US$7,600 for a basic, nine-month CFP study course – and that doesn't cover the costs of textbooks. Online course may be a better bet for the wallet.

For a thorough list of CFP training programs, visit the CFP Board website. There you'll gain access to CFP Board-registered study programs in three categories:

• By state

• By type

• By distance learning options

Book It
Get your CFP overview campaign started with guides and workbooks that cost under US$50, but will get you up to speed on what you’ll need to know to master the CFP exams. has a good list here, including "Your Guide To the CFP Certification Exam" (for US$17) and the "CFP Certification Exam Practice Question Workbook" (for US$36).

The Bottom Line
The competition to become a financial planner is hot, and growing hotter. The CFP Board reports the industry will grow by 41% by 2016. That means the sooner you pass the CFP exam, the better off you'll be in gaining a solid foothold in one of Wall Street's fastest-growing sectors.

Related Articles
  1. Professionals

    The Basics Of CFP Designation Maintenance

    The workload doesn't end with your exam. Find out how to keep up your CFP credential.
  2. Professionals

    The Key To CFP Exam Success

    Up to 60 of the questions on this test are case studies. Are you up for the challenge?
  3. Professionals

    Studying For The CFP Exam

    Learn the tips and tricks of the trade before heading into this test.
  4. Professionals

    CFP, CLU Or ChFC - Which Is Best?

    The designation you choose will depend on which areas of financial planning you want as your focus.
  5. Professionals

    Financial Career Options For Professionals

    Find out if spreading your wings to try a new career will make you soar or fall flat.
  6. Options & Futures

    The Alphabet Soup Of Financial Certifications

    We decode the meaning of the many letters that can follow the names of financial professionals.
  7. Professionals


    CFP Exam Guide
  8. Investing

    Top Investment Banks In The Energy Industry

    Many global Investment banks are highly involved in the energy industry, but there are also some smaller banks and boutiques that are strong players.
  9. Professionals

    Career Advice: Financial Planner Vs. Wealth Manager

    Understand the differences between a career in financial planning and wealth management, and identify which is better for you based on your goals and talents.
  10. Professionals

    Career Advice: Accountant Vs. Financial Planner

    Identify the key differences between a career in accounting and financial planning, and learn how your personality dictates which is the better choice for you.
  1. What do hedge fund analysts do?

    A hedge fund analyst primarily provides support to a portfolio manager on how to best structure the hedge fund's investment ... Read Full Answer >>
  2. Do financial advisors have to find their own clients?

    Nearly all financial advisors, particularly when new to the field, have to find their own clients. An employer may provide ... Read Full Answer >>
  3. Do financial advisors get drug tested?

    Financial advisors are not drug tested by any federal or state regulatory body. This means you may receive your Series 6, ... Read Full Answer >>
  4. Is a financial advisor required to have a degree?

    Financial advisors are not required to have university degrees. However, they are required to pass certain exams administered ... Read Full Answer >>
  5. Do financial advisors have to be licensed?

    Financial advisors must possess various securities licenses in order to sell investment products. The specific products an ... Read Full Answer >>
  6. Do financial advisors need to meet quotas?

    Most financial advisors are required to meet quotas, particularly if they work for firms that pay base salaries or draws ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Real Estate Investment Trust - REIT

    A REIT is a type of security that invests in real estate through property or mortgages and often trades on major exchanges ...
  2. Section 1231 Property

    A tax term relating to depreciable business property that has been held for over a year. Section 1231 property includes buildings, ...
  3. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
  4. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  5. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  6. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!