How to Become a Certified Financial Planner (CFP)

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So you are interested in becoming a Certified Financial Planner™ or CFP®? Good because that is exactly what I am going to talk to you about. In this post, I’ll share the education process and requirements, how to plan your study time and other helpful tips I learned while prepping for the CFP exam plus useful insights I gained later on as a preparation course instructor. So, let’s get started.

First, I am excited to be teaching with Brett Danko . We offer a fast track program through Stockton University’s Continuing Studies Program. Passing it, along with holding a bachelor’s degree, allows you to meet the education requirement to sit for the CFP® exam.

Teaching these certified financial planner courses reminds me of my experience going through the CFP certification process. While it was a ton of work, it was absolutely a worthwhile experience. It made me a better financial advisor and it has paid for itself many times over.

So how do you become a certified financial planner?

The Education Requirement for CFPs

As I mentioned above, a bachelor’s degree is required before sitting for the Certified Financial Planner exam, however, that is not the only education requirement.

Beyond your degree, the CFP® Board of Standards also requires that you have completed coursework that specifically addresses all major personal financial planning areas. There is a little wiggle room here in that you can challenge this requirement if you already hold certain academic degrees or professional credentials, and you can also request a transcript review to see if certain completed courses would count towards this requirement.

When I became a CFP® I took two board-registered courses through The American College (they were free as part of a Merrill Lynch training program). I was able to have two courses waived through a transcript review because I graduated from law school and I took two courses through a different board-registered program taught by, you guessed it, Brett Danko.

I would not necessarily recommend the transcript review route to everybody. Although it seemed great at the time to have courses waived, I definitely had to work harder when it came time to study for the exam.

There are more and more undergraduate, board-registered programs being established every year. In fact in 2010 I led an effort to put together Stockton University’s program, where I still serve as a part-time assistant professor.

It is great to see a program available where undergrads that know they want to work in the financial services field can graduate and immediately sit for the certified financial planner exam because they’ve met all the necessary education prerequisites.

Beginning the Preparation Process

So once you get through the education requirement, what else do you need to do to become a CFP®? First and foremost, you have to pass THE exam, which is 170 multiple-choice questions and can last as long as six hours. It takes a whole lot of studying time to pass the exam, so it will be necessary to totally commit to the preparation process.

If you are a Philadelphia 76ers fan you know all about committing to and Trusting the Process. Same deal here.

If you don’t go all in, you will find a million excuses not to study, including work, family and everything else. I would recommend Brett’s Live Review course. I rarely teach these courses so it isn’t a total shameless plug, plus when I was going through the CFP® process I took the course and I don’t think I would have passed without it.

It is intense. It lasts four days with each day going for at least 10 hours. And it is intense. Yeah, I know I already mentioned that.

Having had some of my educational courses waived and others self-studied, I really felt like I was behind going into studying for the exam and therefore knew I had to really had to work hard. The great thing about the live review is it adds structure to studying for the exam.

Getting Ready for a Live Review

I would suggest you register for the live review about six weeks prior to it beginning. This will give you some leeway if there is any delay receiving the materials in the mail.

Your study materials will include a couple of pre-study books as well as a book of exams. It’s important to set up a study schedule. Your goal is to spend roughly 20 hours per week studying prior to the live review beginning and this means getting through all of the materials you received in the mail.

Spend about two hours in the morning or night studying these materials, and spend another hour in the day or night reviewing notes and flashcards. If you are a day person, then spend the two hours in the morning and vice versa.

CFP Exam Test Taking Strategy

During this study time, you should begin pacing yourself for taking exams. Shoot for about 2 minutes per question. On game day you will be given 170 questions to answer over 360 minutes, so practice at an even faster pace to guarantee that time won’t be an issue.

Also, make sure you aren’t spending unnecessary time on questions you will never get correct. Wasting 10-15 minutes on one exam question will guarantee you don’t finish the test and that means you likely missed a couple easy questions you would have gotten correct. You don’t need a perfect score to become a CFP®.

Finally, make sure to visit and review what the exam will actually look like on the computer at the testing center and important details about the exam day experience. We want zero surprises the day of the exam.

At the live review you will receive a more condensed version of the study materials, and towards the end of class you will be given a personal study plan for the weeks leading up to the exam. You are now in the homestretch, don’t slack off; keep putting in the 20 hours minimum, passing will be worth the time.

The Study Plan that Worked for Me

I printed out a blank Outlook calendar and I figured out exactly what I needed to complete each day to make sure I finished the pre-study materials prior to the live review. I wanted to keep one day free for things non-financial planning related so my goal was to study Monday – Saturday, but still get in my 20 hours.

I studied Monday – Friday, two hours in the morning and an hour at another time of the day. Sometimes this meant flipping through flashcards while I worked out; other times it meant reading while I was driving back and forth from a meeting, I kid….

Point is you have to find the time. On Saturdays, I would study in the morning, take a couple hour break and study in the afternoon into the evening. Sundays I took off. I don’t necessarily recommend a day off but it worked for me.

I did this up until the live review and I was able to not only get through the material but also spend extra time on the subjects I was struggling with. I felt like this was really beneficial; it allowed me in the Live Review to feel like I was just actually reviewing key topics as opposed to learning them for the first time.

After the live review, I followed the study plan given in the course, which included more practice cases and questions. I continued to dedicate myself to studying and putting in the time. At this point you are max studying, as much time as possible without losing your job, getting divorced or developing additional substance abuse issues (already hooked on coffee).

Honestly, I did not feel like I could pass until about a week before the exam; this comforts some to hear but was comforting to me then! There is a ton of material you need to learn and if you study enough at some point before the exam, hopefully sooner than I did, you will feel like it is clicking and you may just have a chance at passing.

Taking the CFP Exam

My exam was the old version, which was three parts over a day and half. I finished every session with anywhere from 45-60 minutes left. I literally spent zero seconds on questions I didn’t know; I simply marked an answer and marked them review knowing I would have time to review later if I had time and if I didn’t, who cares, I didn’t know the answer anyway.

This extra time allowed me to review the exam, catch some questions I misread and mis-answered and most importantly relax a bit before the next session. I walked out of the exam feeling okay, slightly confident I had passed, but not really sure. Back then I had to wait six weeks for an answer, lucky (or unlucky) for you, you get to find out immediately if you passed or failed.

The Last 2 and Hopefully Easiest Requirements…

Congrats on passing! The last two requirements are hopefully the easiest, or at least they will seem to be after studying and passing the exam.

  • CFP Experience Requirement – You will need to work in the financial services industry for three years or serve as an apprentice for two years. You can meet this requirement before or after passing the exam.
  • Fitness Standards – Certain conduct always bars or is presumed to bar candidates from becoming a CFP®. It would be a good idea to review these Standards of Professional Conduct from the CFP board prior to beginning the process.

Becoming a Certified Financial Planner is very challenging, but becoming a CFP os well worth it. The benefits far outweigh the hard work and sacrifices that go into achieving the designation.

If you are thinking about beginning the process feel free to contact BRETT or ME.

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