Becoming a Certified Financial Planner

A survey by the Certified Financial Planners Board among upper-income households threw up the following observations:

  • 85% considered successful completion of a certification examination "very important" or "extremely important."
  • 95% felt financial planners should adhere to professional practice standards.
  • 97% said the most important standard for financial planners was adherence to a professional code of ethics.

This clearly underlines the fact that consumers would like planners to put their interest first and not push or peddle products based on commissions or other vested interests. After all financial planner are advising clients on how and where to invest their hard earned money. It would not be entirely wrong to say Personal Financial Planners are both professionals and advisors who are trusted deeply by the members of their financial flock. This responsibility must not be worn lightly by the planner. You are probably interested in becoming a financial planner, and a good point to start is to get the Certified Financial Planner (CFP) certification.

Education Requirement: You need a bachelor’s degree for your CFP certification. You do not need it to take the exam, but must be attained within five years of obtaining the certification. Proof of degree will be required once you pass the certification exam.

Certification Exam: The CFP® Certification Examination tests current tax law, and the tax tables and other indexed numbers. Based on a job analysis study in 2009, the following areas will be covered in the March 2012 exam and afterwards. Also given are percentages of topics in the exam.

  1. Establishing and Defining the Client-Planner Relationship (8%)
  2. Gathering Information Necessary to Fulfill the Engagement (9%)
  3. Analyzing and Evaluating the Client’s Current Financial Status (25%)
  4. Developing the Recommendation(s) (25%)
  5. Communicating the Recommendation(s) (9%)
  6. Implementing the Recommendation(s) (9%)
  7. Monitoring the Recommendation(s) (5%)
  8. Practicing within Professional and Regulatory Standards (10%)

The CFP® Certification Examination is pencil-and-paper format, multiple-choice exam. There are two primary types of questions, including standalone multiple-choice and scenario-based questions.

Scenarios can be brief, with a few accompanying questions, or more extensive, with 10-20 associated questions. The CFP® Certification Examination tests your ability to integrate knowledge from all of CFP Board's specified content areas. Questions may focus on discrete content areas or may require application, integration, synthesis, or evaluation across several content areas.

The cognitive levels that are tested on the CFP® Certification Examination are:

  • Knowledge
  • Comprehension/Application
  • Analysis/Synthesis
  • Evaluation

The CFP® Certification Examination gives higher priority to critical thinking and problem-solving ability, with less emphasis on factual recall or recognition.

The CFP® Certification Examination is scheduled to last 10 hours over a day and a half. It is held three times a year, generally on the third Friday and Saturday of March, July and November. The exam consists of one four-hour session on Friday afternoon, and two three-hour sessions on Saturday. Exam locations are available in more than 50 locations around the U.S. The fee for the CFP® Certification Examination is $595 and must be paid in full by the Application deadline. An international test site will cost you $1475 +$595= $2070. The pass rate has generally been about 50%.

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