If you’ve ever considered becoming a Certified Financial Planner™ or just wanted more information, you’ve come to the right place. With all the information out there it can get overwhelming in identifying and choosing the right program and course of action for you. One thing is for sure when you earn your CFP® you become among an elite few. Those three letters add an immense amount of credibility to your name and it will build additional confidence with your current clients and future prospects.
Why Should I Get The CFP® Designation?
As a Financial Advisor, your success will be largely dependent on your ability to build and maintain trust.
There are several ways to accomplish this over time, but in the beginning, I can’t think of any other way to prove to your clients and prospects that you’ve committed your time and effort to study and gain the deepest level of commitment and understanding to personal financial planning.
Although there are several other respectable designations, the CFP® designation is recognized in the industry as the highest standard and earning one enables you to differentiate yourself and have a competitive advantage over your competition.
CFP® By The Numbers
How Many CFP® Are There?
Currently, it is estimated there are around 70,000 Certified Financial Planners™ in the world. However, according to CFP Board, less than 20% of practicing advisors can claim they’re Certified Financial Planners™
How Many People Pass The CFP® Exam The First Time?
The CFP exam is a pass or fail. The CFP board has the official numbers on their website but for first-time test takers, the average pass rate is around 69%. That pass rate drops 15% for retakers. So, if you’re going to do it, do it right the first time because the odds turn against you the second time around.
How Long Will It Take To Complete Start To Finish?
Assuming you already have your bachelor degree and have satisfied the 3-year relevant experience requirement the CFP® designation will take approximately 1-2 years to complete from start to finish. However, some students have reported taking up to 5 years to complete all the work.
The bottom line is, you need at least 1,000 hours to get through the coursework and be ready to sit for the exam.
Again, everybody is different, and it is nearly impossible to tell how long it will take you. However, assuming there are 261 work days in the year, you could study an average of 3.83 hours a day, Monday-Friday to be ready in 1 year.
How Much Does CFP® Cost?
The cost of the CFP® certification heavily depends on the CFP® program you choose. Prices vary based on whether or not the package includes books, instructor-led or self-paced and the University tuition. However, to get a ballpark of what the CFP® exam will cost here are some estimates based on the most popular programs.
|CFP® Program Cost- $3,995-7,500|
|CFP® Capstone Project-$525-895|
|CFP® Review Course-$495-1,000|
|CFP® Exam Cost-$695 (Standard Registration)|
|Total Cost- $5,710-10,000|
Will My Salary Increase With A CFP®?
The short answer is it should. However, the truth remains on your ability to market your CFP® certification. Simply putting the three letters after your name on your business card is not going to increase your revenue.
You have to actively market your CFP® to allow yourself to be discoverable. For example, you could register your name with the CFP® Board, create or update your LinkedIn account and become actively involved in your programs alumni network to start. It will be up to you to showcase your new credentials, and your ability to do it effectively will directly influence your business growth.
Always check with your compliance department and the CFP® Board guidelines to make sure your marketing efforts are not in violation of their standards. The bottom line remains even if you do nothing your value as a Financial Planner increases.
How To Become A Certified Financial Planner™(CFP®)
Step 1 - Complete CFP® Education Requirements
The first step into to earning your CFP® certification is to complete the educational requirements set by the CFP® Board. This includes:
1) Earning a bachelor's degree or higher at an accredited university.
Step 2 - Take the CFP® Exam
After completing your education requirements you must pass the CFP® Exam.
The CFP® Exam is offered three times a year, March, July, and November. It is a computer-based test comprised of 170-questions offered through Prometric testing sites.
The questions include case analysis, stand-alone questions, and short scenario. There are two 3-hour sessions and a mandatory 40-minute break in the middle.
Step 3 - Satisfy Experience Requirments
The CFP® Board requires three years or six thousand hours of full-time relevant personal financial planning experience or two years apprenticeship.
Step 4 - Pass Background Check and Ethics
This requires candidates to file a CFP® certification application disclosing any criminal, civil, self-regulatory or governmental proceedings along with any customer complaints, terminations, and other relevant background information. You will then be asked to adhere to the CFP® Boards Standards of Professional Conduct.
Once you’ve cleared the background check and agreed to adhere to the ethical standards, you have earned your rights to be called a CFP®.
Continuing Education to Maintain CFP® Certification
Once you are CFP® certified you must complete three renewal requirements every three years.
- Submit $100 for background check
- Submit $325 Certification Fee
- Complete 30 hours continuing education
Earning your CFP® may be one of the hardest things you do. However, the skills you learn along the way along with the credentials and ability to call yourself a Certified Financial Planner™ may be the best investment you ever make for yourself.