Requirements to Become a CFP

Certified financial planners advise clients on managing their finances. They help clients reach savings and retirement goals, provide counsel on estate planning and can help parents devise a strategy to pay for their children's college education. The job outlook for CFPs is rosy, with growth expected to be faster than the average for all occupations through 2018, according to the U.S. Department of Labor. Becoming a CFP requires a rigorous program of financial education and passing a certification exam administered by the Certified Financial Planner Board of Standards.

College Education

All CFPs must have at least a bachelor's degree from an accredited college or university. While you can take the CFP certification test before finishing or acquiring your undergraduate degree, you must graduate within five years of passing the exam. The CFP board may terminate your certification if you fail to earn a degree within the required time frame.

CFP Education

To prepare for the CFP certification exam, you must study approximately 100 financial planning topics including insurance, risk management, employee benefits, investments, income taxes, retirement and estates. Colleges and universities across the nation offer financial planning certificate programs that give aspiring CFPs a comprehensive education in the field and prepare them for the exam. Some schools also offer web-based CFP training. Programs with a curriculum approved by the CFP board are listed online. The standard time to complete a program is 18 to 24 months. You can bypass the CFP certification coursework if you are certified as a chartered financial consultant (ChFC), chartered life underwriter (CLU), chartered financial analyst (CFA) or licensed as a certified public accountant (CPA). If you are a licensed attorney or have a Ph.D. in business, economics or business administration you are also exempt from the CFP training requirement.

Experience

Another major part of the CFP certification process is gaining work experience. The CFP board outlines specific criteria as to what counts as work experience. You must have a total of three years full-time experience in the financial planning process. This may include time spent as an intern or in residency programs. You can sit for the CFP exam without having completed the requirement. However, you must fulfill the experience obligation within five years of passing the exam. You must also provide the board with verification of your work experience.

CFP Exam

The CFP certification exam evaluates your knowledge of financial planning knowledge and whether you are competent enough to practice in the field. Exam questions are multiple choice. After you have completed the required CFP coursework, you can apply to take the exam and pay the registration fee. Experts grade the exam, which is pass-fail. The CFP board provides sample questions on its website. The exam is offered three times a year and lasts 10 hours spread over a day and a half. Exam sites are located around the country.

Continuing Education

After you complete your CFP requirements you must continue to upgrade your knowledge by taking continuing education classes each year to keep your certification valid. CE classes must be approved by the CFP board.

References

• Certified Financial Planner Board of Standards: The Education Requirement
• Certified Financial Planner Board of Standards: List of CFP Board-Registered Programs
• Certified Financial Planner Board of Standards: Topic List for CFP Certification Examination
• Certified Financial Planner Board of Standards: Become a Certified Financial Planner Professional
• Certified Financial Planner Board of Standards: A Career in Financial Planning
• "Occupational Outlook Handbook, 2010-11 Edition"; Personal Financial Advisors; Bureau of Labor Statistics, U.S. Department of Labor; December 2009