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:
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
- 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 http://www.cfp.net)
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.
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.
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.
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.
What Professionals Say About Dalton
"I recommend Dalton's CFP study program to anyone who is planning to sit for the test. It is thorough, well guided, and offers many resources for individual support. I can honestly say that I went into the exam KNOWING that I was going to pass."
"It came down to the enrollment advisor's responsiveness in addressing my questions/concerns as primary and then the ability to be flexible with online courses and working through the coursework. Absolutely would recommend Dalton! After having taken the exam (and passed!) last week, I appreciate Dalton's questions even more as they were more realistic to what I saw on the exam. Thank you! Keep up the good work!"
"Combined with hard work and dedication, Dalton Education made sure I had what was needed in order to succeed. Without their experience, diligence, and structure, I would have spent more time worrying about what to study and when rather than putting in the hours needed to pass. Dalton knows how to get it done the first time around!"
"I have thoroughly enjoyed the Dalton Education CFP study program. I completed the 10 week review for the exam, including a 4 day live review. I successfully passed the CFP exam and I owe my success to Dalton and their incredible team of instructors. The Dalton materials, coursework, virtual classroom and schedule are not only intuitive and user friendly for a working mother, but they are top notch. I felt prepared for the exam, and after passing the exam I realized how Dalton had not only prepared me for everything but they over prepared me. I have a deep understanding for financial planning, and I look forward to taking my career to the next level. Thank you Dalton! A huge shout out to a team of highly intelligent and helpful instructors!"
"Dalton provided me the materials, resources, and structure that I needed to complete my certification. From the beginning, I greatly appreciated a detailed schedule for staying on track with the material while allowing you the flexibility between deadlines to manage your work and personal life alongside my certification work. It helped me plan study time accordingly and gave me a practical benchmark for preparation time. That said, each professor teaching the material stood out to me whether it was because of their experience with the CFP exam, pedigree, and/or knowledge and presentation of the material."
"What I love about the CFP course through Dalton is the flexibility. I have co-workers who are taking the program through other providers and they are stuck all day on a Saturday reviewing and taking tests – not for me. Also, the exam prep materials are amazing! I love the flash cards and the Quick Sheets. The instructors are amazing and I have felt very supported along the way. I would definitely recommend Dalton to others."
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