Four Steps: How to Become a Certified Financial Planner™

    How does one become a certified financial planner™? Well, the CFP Board has a path to that designation and it's called the “Four E’s”. Each E stands for a step that must be taken before the candidate can become a CFP® professional.

    The four steps on how to become a certified financial planner™ are as follows:

    1. Education:
    This step is very important and can be called the heart of the process. Essentially, everyone who wants to become a CFP™ certificant must complete a registered program at an accredited institution of higher learning. For example, Dalton Education has set up accredited Certified Financial Planner programs at multiple prestigious universities, including NYU, Northwestern University, Pepperdine, and many others. The board also registers programs at other Universities all over the nation, offering either a degree program or a certificate program, whereby the candidate does the course work, and the board is then notified by the institution that the candidate has completed the required coursework to fulfill the education requirement. One other item, the candidate must have a bachelor’s degree (any area of study) from an accredited college or university to carry the designation. If you do not have a college degree, but have finished the required education, you may take the exam, but you must obtain a degree within five years after passing the exam in order to be certified.

    The body of study is usually six (sometimes more) courses which are seen to be upper level (300 level) college courses and cover the 8 learning domains which the CFP Board’s job survey has shown to be essential to the practice of Financial Planning. A broad overview of the coursework would include the following subjects:

    • The Financial Planning Process and Insurance

    • Investments

    • Tax Planning

    • Retirement Planning and Employee Benefits

    • Estate Planning

    • Financial Plan Presentation

    There are candidates who may take the exam without completing the work at a registered program. People who carry the designation of CFA, CPA, ChFC, CLU or the degree of PhD (business or economics), DBA, or JD are deemed to have already fulfilled the education requirement and are referred to as “challenge candidates”. You can also be given challenge status based upon a transcript review by the CFP Board. (See

    Challenge candidates are exempt from all coursework, except for the Financial Plan Presentation course, which is a requirement to have completed before registering for the CFP® Exam.

    Once a candidate has satisfactorily completed the course work in a registered program, the Board is notified and the Candidate is eligible to go to the next step: The CFP® Exam.
    2. Examination:
    The CFP® Exam is a rigorous, professional exam administered by the CFP Board and is given in approximately 50 sites 3 times annually (March, July, and November). It is a paper exam, usually proctored by local University personnel. The exam is given over a Friday afternoon and most of the day on Saturday, which is divided into 2 sections before and after lunch. Total time of the exam is 10 hours, over the two days.

    It is a comprehensive National Examination, meaning that all topics may be tested and that the entire exam is passed or not. Questions may focus on discrete topics, but many will draw upon knowledge from several topic areas.

    The emphasis of the exam is to determine whether the test-taker is able to competently apply their knowledge of Financial Planning. Note that the Board is asking for the application of knowledge, not knowing facts about Financial Planning. Also note, there is no presentation on the exam as there is in the Financial Plan Presentation course.

    Here is our 1 self-serving recommendation taking the exam to become a CFP® Exam: Take the Dalton Review®; it will help you greatly (plug plug) to pass on the first attempt.

    3. Experience:
    The experience requirement is a little difficult for some people to understand, but essentially is this: You have to have 3 years of full-time experience working with the public in some area which involves financial planning. That could be handling investments, counseling people about their retirement, selling insurance, doing financial planning, preparing plans, presenting plans or teaching of same. Now, you can go to the Board’s website to find out exactly what they say about work experience.

    You have to submit your experience to the board on a form provided to you. So, if you have been in the business of succession planning for small businesses for 5 years, you should be in good shape. My personal take on the Board’s view (and this is definitely an opinion) is that they would want to have as many qualified CFP® certificants out there as possible, and may well be willing to see your experience as relevant if you can demonstrate “how” to them. Experience can be gained 10 years before or 5 years after passing the exam, with 6 months of that experience being required within 12 months of submitting the Resume` form.

    There is also a continuing education requirement of 30 hours every 2 years, which must be fulfilled once the Board licenses you to carry the Designation, and every two years thereafter.

    4. Ethics:
    Lastly, but very importantly, each CFP® certificant agrees to abide by the Board’s Code of Ethics, and further, agrees to the CFP Board’s right to enforce the code.

    This lets the public know that the Advisor who carries the designation adheres to the highest ethical standards. Any advisor who is found by the board to be involved in serious misconduct can be stripped of the designation.

    You can read the ethics code on the Board’s website, but essentially it says you will put your clients’ interests ahead of your own, and always act in a professional manner.

    So, that’s the path, ready to get started? I will say that I have never met anyone who was sorry they had gone through the process and I have talked with many, many who were very happy that they had.

    Talk to an advisor today.

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