How To Become a Certified Financial Planner

Commonly I get asked what are the requirements to become a Certified Financial Planner™ professional and what I went through to achieve the designation.  Knowing that there are over 800,000 people that can be considered “financial advisors”, I knew that I had to differentiate myself.  But it wasn’t about being different, it was also about having a deeper understanding and appreciation of the financial planning process.  I knew that becoming a CFP® was the answer to enhance my career.  I found it fitting to not only share my experience, but to have a few other CFP® professionals chime in with their experience’s, too.

1 | Complete the Education Requirement

Before you can even apply to the CFP® program, you have to satisfy the preliminary education requirements.  At the point in my career that I decided to pursue the CFP® certification, I was more than  five years removed from college with my Bachelor’s in finance, so I easily satisfied the education requirement.  Currently, the CFP Board allows three different paths to achieve these requirements. Taken directly from the CFP.net website:

Complete a CFP Board-Registered Education Program

• There are more than 300 academic programs at colleges and universities across the country from which to choose.
• These programs include credit and non-credit certificate programs, undergraduate and graduate degree programs.
• They use various delivery formats and schedules, including classroom instruction, self-study and online delivery.
• Many of CFP Board’s Registered Programs also offer in-house educational programs for individual companies.

Academic degrees and credentials that fulfill the educational requirements include:

• Certified Public Accountant (CPA) – inactive license acceptable
• Licensed attorney – inactive license acceptable
• Chartered Financial Analyst® (CFA®)
• Doctor of Business Administration
• Chartered Financial Consultant (ChFC)
• Ph.D. in business or economics
• Chartered Life Underwriter (CLU)

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Certain industry credentials recognized by CFP Board, or the successful completion of upper-division level college courses, may satisfy some or all of the education requirements set by CFP Board.

Bachelor’s Degree Requirement
A bachelor’s degree (or higher), or its equivalent,1 in any discipline, from an accredited college or university2 is required to attain CFP® certification. The bachelor’s degree requirement is a condition of initial certification; it is not a requirement to be eligible to take the CFP® Certification Examination. After you pass the CFP® Certification Examination, you will be required to provide evidence (official transcript from the degree-granting institution) that you hold a qualified bachelor’s degree or higher degree.

Jim Blakenship, CFP® and author of Getting Your Financial Ducks in a Row, shares his experience on achieving the CFP® designation:

I took the American College Chartered Financial Consultant (ChFC) course which fulfilled the education prereq.  The ChFC course was provided by my employer at the time (an insurance company).  I followed that up with a CFP self-study course from Dalton.  Then I went to a two-weekend live review from Dalton.  The Dalton courses were much more useful than the American College course, in my experience.

2 | Pass the CFP® Certification Examination

Wholey moley what an exam! The CFP® Certification Examination was by far the most challenging exam I’ve ever taken and hopefully ever will take.  The two day, 10-hour exam applied all the key areas of comprehensive financial planning.  Although all questions are multiple choice, they are arranged in a way that every question “almost” sounds right.  That’s what makes the test so challenging.

The exam is administered three times a year – generally on the third Friday and Saturday of March, July and November at about 50 domestic locations.  I took mine  at the University of Missouri-St.Louis in November 2007.  The application deadline is approximately seven weeks prior to each exam date (e.g., February 1, June 1 and October 1). To apply to take the exam, complete the online application, download an application or call 800-487-1497 to have one mailed to you. Completed applications, including payment of the $595 fee, must be received by the deadlines printed on the applications – there are no exceptions.

How I Prepared For the Exam

My previous firm had an arrangement with Kaplan University that offered a “boot camp” style class.   Once a month for nine months, I traveled to St. Louis to sit in on a four day (8 a.m.-6 p.m.) lecture.  I’ve never drank more Diet Coke and coffee in my life!  Our instructor was insanely smart and help us trudge our way through all the concepts.  Imagine learning about estate planning for 9+ hours a day.  Are you jealous?  After all the sessions, we then had a final recap with a different instructor a month before the actual exam.

Reflecting back, I really don’t know another way that I could have absorbed that much information in that short of time.  If I were to do it by self study, I would probably still be without the designation.

Richard T. Freight, CFP® who also authors the blog Think Beyond the Numbers, confirms my suspicions by sharing his experience with the self-study program:

After failing to discipline myself with self study, over the course of 3 years I took the individual courses (5 in 1998) at 3 different community college and universities, often traveling an hour each way twice a week to pass the exams. Then I took Ken Zahn’s “blitz” 3 day course to pass the overall exam. I know it sounds like the old walking uphill both ways to school in the snow, but it wasn’t a cake walk by any means. My overall exam had a pass rate of 49% across the U.S.

Test Results

I sat for the exam in November 2007 and didn’t receive my test results until early January.  Talk about suspense.  I just happened to be home that day when the mail came.  I remember seeing the thin, little white envelope from the CFP Board and my heart sank.  Why was the envelope so thin?  Was that a bad sign?  I nervously paced inside and finally just ripped the envelope open….Congratulations you passed.  I screamed with excitement and then called my wife to share the good news.

Typically, each testing period has about a 50% pass rate and that was about the same with my group.  That is why I was so thankful that I passed.  When you receive notice that you passed, you then have to satisfy the remaining requirements.

3 | Meet the Experience Requirement

In March of 2007, I began the Kaplan University CFP® course.  At that time, I had been a financial advisor for already five years, which satisfies the experience requirement.    The CFP Board requires that you have at least three years of qualifying full-time work experience.

According to the CFP.net website, experience can be gained in a number of ways including:

• the delivery of all, or of any portion, of the personal financial planning process to a client.
• the direct support or supervision of individuals who deliver all, or any portion, of the personal financial planning process to a client.
• teaching all, or any portion, of the personal financial planning process.

Joe Pitzl, CFP® shares how he got a head start in completing his experience requirement:

To get a head start on fulfilling my experience requirement, I held three financial planning internships and filed tax returns in a tax firm for two years while in school (it counted for about a year collectively). I then worked for a year as a full-time financial planner before taking and passing the exam. Six months later, I had officially fulfilled the 3-year requirement and became a CFP®.

4 |  Background Check…Do You Pass?

Applicants for CFP® certification must pass CFP Board’s Candidate Fitness Standards, which describe conduct that will or may bar an individual from being certified.  That’s one of the aspects that makes being a CFP® professional that much more prominent; we are held to a higher standard that your typcial financial advisors. The board will conduct a background check as you make your commitment to adhere to the CFP Board’s Code of Ethics and Professional Responsibility and Financial Planning Practice Standards.

Brian Plain, CFP® shares a similar accelerated approach to achieving his designation:

“Apparently I’m a glutton for punishment as I fulfilled my education requirement through the accelerated 9-month program at Northwestern and then did a 4-day live review course prior to taking my exam…for the first time. Getting that “fail” letter in the mail was deflating, but it was also made me appreciate the experience that much more when I received my “pass” letter the next time I sat for the exam. Needless to say, I still have that letter!”

5 | Time to Pay Your Dues

After you verify those three steps, it’s time to pay up.   You’ll have to pay a one-time, non-refundable initial certification application fee of $100 for the background check.  In addition, you will be responsible for a biennial certification fee of $360.  To me, that cost is minimal, compared to the amount of knowledge I have gained through the whole process.

Jason McGarraugh, CFP® gives a detailed account on his path to becoming licensed:

I went the Degree Plan rout.  After spending 4 years getting a BBA in Corporate Finance at Texas Tech I graduated without any of the Financial Planning knowledge that I wanted.  Circa 2000 I discovered that Texas Tech actually had a Masters program in Financial Planning.  I spent 2 1/2 years working on my Master of Science in Personal Financial Planning which included the necessary CFP® courses with additional classes to round out the degree plan.  After graduating I spent a semester working for a private school in Singapore that taught the CFP® courses there.

I moved back to Lubbock in May of 2003 and began the two month live review with the professors at Tech to prepare for the July exam.  I made enough money In Singapore to pay for the review and a few months of rent with some friends that were also taking the review.  I studied 6 days a week for two months and passed the exam on the first go round.  I probably put in about 250 hours of study and class time.  I made it a point to take one random day off a week to relax.

It took about a month to get the results back and during this time I was interviewing for jobs.  By early October 2003 I was fully licensed for insurance and securities and working with Waddell & Reed in Fort Worth, TX (plan B).  I reached my 3 years in October of 2005 thanks to 12 months of experience as a Peer Financial Counselor with Tech’s Red to Black program.

6 | Congratulations ! You Are Officially a CERTIFIED FINANCIAL PLANNER™ Professional

Once everything is complete, you will get notice that you are officially a CFP® and you can refer to youself as one.  After making it this far, you deserve it.  Now it’s time to order new business cards and make the appropriate updates to your website.   I never thought I would be so excited over “three little letters”, but all the time invested to achieve those letters makes them extra special.

Securities offered through LPL Financial, Member FINRA/SIPC

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