What is a Certified Financial Planner - CFP

A certified financial planner refers to the certification owned and awarded by the Certified Financial Planner Board of Standards, Inc. The CFP designation is awarded to individuals who successfully complete the CFP Board's initial and ongoing certification requirements. Individuals desiring to become a CFP professional must take extensive exams in the areas of financial planning, taxes, insurance, estate planning and retirement. Attaining the CFP designation takes experience and a substantial amount of work. CFP professionals must also complete continuing education programs each year to maintain their certification status.

How to Obtain the Certified Financial Planner Designation

A candidate aiming to earn the CFP designation must meet requirements in four categories: education, CFP exam, work experience and ethics. The education requirements contain two major components. First, the candidate must verify that he or she holds a bachelor's degree or higher from an accredited university or college recognized by the U.S. Department of Education. Second, the CFP Board requires the candidate to complete a list of specific coursework in financial planning. Most of this second requirement, besides the capstone course, may be bypassed if the candidate holds one of many accepted financial designations, such as CFA, CPA or a higher degree in business.

All candidates must pass the computer-based CFP exam, which the candidate takes over a three-day period. The exam is 170 multiple choice questions, which include stand-alone and item-set-style questions. The exam topic weights change regularly but include areas such as professional conduct and regulations, financial planning principles, education planning, risk management, insurance, investments, tax planning, retirement planning, and estate planning. The candidate is tested in these areas as well as his or her ability to establish client-planner relationships, gathering information, analysis, and developing, communicating, implementing and monitoring recommendations.

As for professional experience, candidates must prove they have at least three years of full-time professional experience in the industry, or two years of apprenticeship in the industry, which is subject to further individualized requirements.

Lastly, the ethics requirements. Candidates and CFP holders must adhere to the CFP Board's standards of professional conduct and regularly disclose information about their involvement in a variety of areas, such as criminal activity, government agency inquiries, bankruptcies, customer complaints or terminations by employers. Also, the CFP Board conducts extensive background checks on all candidates. Earning the CFP designation depends on all the above requirements; however, the CFP Board has final discretion on whether to award the designation to an individual or not.

The CFP Exam

A certification exam administered by the Certified Financial Planner Board of Standards Inc. that focuses on over 100 topics of concern to the financial planning field, such as retirement, estate, and investment planning. Upon successfully completing the education requirements, passing the exam, and have indicated that you will adhere to the CFP Board's Code of Ethics and Professional Responsibility and Financial Planning Standards, you are eligible to use the CFP mark. The CFP certification mark represents your proven expertise within the financial planning profession.

CFP Study Guide

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Exam Details
Time Limit:   10 hours total. 4 hours on the first day, and two 3-hour sessions on the second day.
Cost:   $595 US. In the event that a special International test site is arranged, the CFP applicant must pay an additional site fee of $1475 for international test sites
Number of Questions:   285
Passing Score:   Criterion-referenced, in that performance is measured according to a set level of required competency, rather than against the scores of other individuals who have written the same exam. This prevents any advantages or disadvantages that can occur when past exams were of lower or higher difficulty.
Passing Rates:   As of 2017, 64%
Format:   Stand-alone multiple choice and scenario-based questions
Prerequisites:   Must fulfill education requirements successfully in order to apply to write the exam. Bachelor’s degree required for certification (but not to take the exam). As of 2012 the education requirements include completion of a financial plan development course (capstone course) registered with the CFP board.

Corequisites:  3 years full time work experience (6000 hours) or 2 year apprenticeship experience (4000 hours). More information on the experience requirements can be found here
Exam Date(s):   The third Friday and Saturday of March, July and November.
Exam Results:   5 weeks
Exam Topic Weights:   http://www.cfp.net/become/