How to Become a Certified Financial Planner (CFP)

Last updated on July 22nd, 2017

I recently wrote an article on how to become a financial advisor. After writing that, I realized that another article would be necessary to explain how to become a certified financial planner (CFP®).

The Certified Financial Planner (CFP®) designation is becoming the standard in the financial planning industry. More and more studies are being conducted that ask potential clients their preferences in choosing a financial planner, and most of them indicate strong support for the CFP® designation.

There are many reasons for this. With a million or more so called “financial advisors” lurking in the shadows, it’s very important to carry a distinguishing designation. In addition, the CFP® designation mandates a solid knowledge base and provides an excellent regulatory standard in the financial planning world.

Without further ado, here is how to become a certified financial planner (CFP®):

Required Education:

A bachelors degree is required, although it can be in any field. Those with degrees outside of financial planning must take the required classes that are approved by the CFP® board. Those classes currently include:

  1. General principles of financial planning
  2. Insurance planning
  3. Investment planning
  4. Income tax planning
  5. Retirement planning
  6. Estate planning
  7. Interpersonal communication
  8. Professional conduct and fiduciary responsibility
  9. Financial plan development (capstone) course

There are many ways to fulfill the educational requirements of the CFP® board. In fact, there are over 300 colleges and universities across the country which provide the necessary classes. There are online self study programs, bachelors degrees, masters degrees, and even PhD programs like the one I’m currently enrolled in. Let me break them down for you.

Online Self Study Programs 

I almost enrolled in one of these programs before I decided to pursue my PhD. They can be completed at your own pace, on your own schedule. They do not typically count for any actual college credit, but they satisfy the CFP® requirement.

I’ve done a lot of research on the available programs and here is what I’ve found.

  • Dalton controls a big chunk of the online programs. The Dalton courses are expensive and because of that, I wouldn’t enroll. The basic online course is now $3,195 plus textbooks. Dalton offers the program through official schools, but all the web pages look alike and all of them cost the same amount. Click Here for an example at the University of Miami.
  • Florida State offers a unique program that is actually professor led. The cost is $3,600 plus textbooks. It seems to be a little more involved and the courses are only offered at certain times so you can’t complete the whole thing quite as quick as the other self study options.

Advanced degrees

Financial planning is a rapidly growing profession with an expanding research base. More and more business schools are developing full blown financial planning programs with a ton of support from the CFP board. For this reason and many others, I’m extremely bullish on the future of the profession. For those looking to earn a graduate degree in financial planning, you have more and more options opening up.

  • An online masters degree in financial planning can be obtained from several schools now. Kansas State and the University of Missouri have well known programs, but they are actually part of the Great Plains Interactive Distance Education Alliance program. The program is 42 hours at all of the schools, which teach the same curriculum.
  • Online PhD – I think Kansas State is the only one offering an almost completely online based PhD program. It requires a masters degree for admittance and will take 4ish years to complete.
  • Graduate Degrees on Campus – Many other programs offer graduate programs on campus. Texas Tech has a huge Personal Financial Planning Department.

Exemptions

Holding any of the following degrees or designations will fulfill the educational requirements of the CFP®

  • 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)

The Exam

The CFP® Certification Examination is a one day, 6-hour exam that is offered three-times each year. It consists of 170 multiple choice questions.

The cost for the exam is $595. You can register for the exam when you have successfully fulfilled the education coursework requirements.

The exam typically has a pass rate that hovers around 64%, so it’s not an easy test.

The exam covers all of the material that is taught in the educational requirements. There are many reviews courses available or plenty of books available for self study.

The Experience

Even if you pass the exam, you can’t use the CFP® designation without work experience. This makes a tough situation for the college graduate who is trying to figure out how to become a certified financial planner.

If you are in college and want to be a certified financial planner, try to get an internship that will count towards the experience requirements.

If you do pass the exam, you can often find a good entry level planning job at a good firm that will satisfy the experience requirements. Although after looking at job offers on the National Association of Personal Financial Advisors (NAPFA), I realized that a good entry level job at an established firm might require relocation, so be prepared.

If you don’t pass the exam, and don’t have any experience, it’s tough to find a job outside of huge brokerage firms that will require thousands of cold calls to hit their commission based sales quotas. I’d avoid the financial salesman route at all cost, but that’s just my opinion.

What are the actual experience requirements you ask? Here are the words straight from the CFP® board:

3 Year Option

A total of three years full time qualifying Experience, or the equivalent 6,000 hours, is required to satisfy the 3 year Experience Requirement.

Qualifying experience for CFP® Certification must satisfy a two-part requirement.

PART 1: Experience must fall within one or more of the six primary elements of the personal financial planning process:

  1. Establishing and defining the relationship with the client
  2. Gathering client data
  3. Analyzing and evaluating the client’s financial status
  4. Developing and presenting the financial planning recommendations
  5. Implementing the financial planning recommendations
  6. Monitoring the financial planning recommendations

PART 2: Experience can be satisfied through one or more of the following five ways:

  1. Personal Delivery to individual client
  2. Supervision of personal delivery to individual client
  3. Direct Support of personal delivery to individual client
  4. Teaching
    Courses at a CFP Board-Registered Program or
    Finance-related courses at a university, offered for
    college credit (a maximum of two years of
    Experience credit may be credited for this teaching
    option)
  5. Internships and/or Residency Programs

The Experience requirement must be fulfilled within five years of passing the CFP®exam. If the requirement is not completed within this time frame, your candidacy for CFP® Certification may be terminated. A one-time, three-year extension may be granted on a case-by-case basis.

2 Year Apprenticeship Option

CFP Board’s Experience requirement may be satisfied by completing two years full-time, or the equivalent 4,000 hours, of “Apprenticeship Experience” focused exclusively on personal delivery of all the personal financial planning process to a client, with direct supervision by a CFP® professional, and documented qualifying experience in all six primary elements of the personal financial planning process. Apprenticeship experience cannot be combined with non-Apprenticeship experience hours.

Qualifying experience under the Apprenticeship Experience option for initial CFP®Certification must satisfy a three-part requirement.

PART 1: Apprenticeship activities must include experience in all six primary elements of the personal financial planning process:

  1. Establishing and defining the relationship with the client
  2. Gathering client data
  3. Analyzing and evaluating the client’s financial status
  4. Developing and presenting the financial planning recommendations
  5. Implementing the financial planning recommendations
  6. Monitoring the financial planning recommendations

PART 2: Apprenticeship Experience can only be satisfied through personal delivery to individual clients.

PART 3: All Apprenticeship Experience must be completed under the direct supervision of a CFP® professional and documented, with verification and attestation from the supervising CFP® professional conducted by CFP Board.”

Background and Renewal

After completing the educational, testing, and experience requirement, you must complete a background check and pay the annual dues to receive your CFP® certification.

Once you have been authorized to use the CFP® marks, you must meet the Board’s renewal standards to continue to use them.

The renewal requirements include the following:

  • Pay the annual $325 certification fee (non-refundable),
  • Submit a properly completed certification application (every two years), and
  • Complete 30 hours of continuing education (CE) every two years.

That’s How to Become a Certified Financial Planner. Did I miss anything?

Comments
  1. Reply

    I stumble upon your website and found some great advice. I was hoping you could give me your input. I’m a current Peace Corps Volunteer in Costa Rica in the Community Economic Sector. My work experience involves providing very simple financial advising, micro-businesses creation, business consulting, assistance to a community owned financial institution that offers low interest loans to the community members to create or develop small and micro-businesses, among many other things. Would that count as work experience when I apply for the CFP certification?

    I’m thinking of doing the educational requirements online. I’m trying to find the least expensive (I’m a volunteer after all he he) and the best education option that will prepare me and for the exam. Can you offer any options and does having a certificate from the school help in anyway or not really?

      • Jacob
      • August 4, 2014
      Reply

      Hi Fernando. I’m not sure about your work experience, but you can shoot an email to the CFP board to find out. There aren’t many options available outside of what I’ve listed for education providers. It won’t matter if you go to a school for the education, unless it’s for networking. Everyone I know that has graduated from Texas Tech has found a job in the planning industry, and many alumni hire the students. In other words, there are two separate pieces to the puzzle:
      1) Passing the CFP (doesn’t matter where you did the basic educational requirements)
      2) Networking to find a desirable job (much easier in a well established CFP program)
      Hope this helps!

  2. Ouch, 50% pass rate. I’ve definitely contemplated this, but I think it would mean a full departure from theatre, which I’m not ready to do at the moment.

      • Jacob
      • May 7, 2014
      Reply

      Pretty low pass rate, but it’s doable! The industry lacks a well defined career path for younger adults, although there are lot of firms looking to hire women right now. It’s a profession dominated by 50+ males…

  3. Reply

    I have a b.s. in finance, management and an M.B.A and I do no believe this covers the education requirements. Looks as if I may need to spend another 5k on education.

      • Jacob
      • February 12, 2014
      Reply

      No, it won’t cover education requirements. They require CFP specific coursework.

  4. Reply

    Great post. I love money but don’t know if I could handle the stress of dealing with other peoples money! My board exam was also 10hrs and about $600…thankfully only once in a lifetime!

  5. Reply

    Hello Jacob,

    I have some basic questions about the CFP. I have been a licensed rep for 12 years and have been a financial advisor the entire time. I took the CFP classes and passed them in 2003 but never took the test. I also have a MBA with an emphasis in corporate finance, and not financial planning. Would I have to take the CFP classes again. Thanks,
    Frank

      • Jacob
      • October 14, 2013
      Reply

      Hi Frank, I can’t find that information on the CFP board site, so I don’t know. Sorry. You can probably email them directly though. Best of luck and thanks for reading!

    • Justin
    • September 14, 2013
    Reply

    I am starting the CFP program through Dalton (NYU) in about a week. Right out of college I was fortunate enough to get hired at MSSB, and now work for an independent firm and an insurance company. I’m also studying for the LSATs… ideally I’d like to go to Yale and do a joint JD/PhD in Finance program. This article helped me make some final decisions. Thank you!

      • Jacob
      • September 14, 2013
      Reply

      You are certainly welcome. I wasn’t aware of the Yale program but Texas Tech has a JD/M.S in financial planning that is supposed to be one of the best in the country. And people finish it in just over 3 years. Email me if you ever have any questions. Best of luck!

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  8. Reply

    Good summary. Just for reference, I took Boston University’s online course and Dalton’s exam prep course and would highly recommend both. I am not a CFP because I have not yet met the experience requirements, but I’m working on it.

    • Me. Bonner
    • May 16, 2013
    Reply

    I’m in the same boat as many others. I’m very interested, but the experience requirements kill it for me. A hobby is where this must stay. Thanks for the great post.

      • Jacob
      • May 16, 2013
      Reply

      You’re welcome Mr. Bonner. Thanks for reading.

  9. Reply

    Wow, this is great write up Jacob. I didn’t know that there is such brand as CFP, I thought is all done by a CFA. It is also quite expensive!! 5 grand for a course? wow!

      • Jacob
      • May 16, 2013
      Reply

      Thanks Martin! CFA is more of an analytical position for most. CFP is more of an actual client oriented financial planner. Not cheap, huh!

  10. Great write-up, Jacob. Frankly, I think if you want to be taken seriously as a financial advisor these days, a CFP designation is a must. It is hard work! 🙂 But it’s worth it it. I love what I do and it makes me proud to help my clients become financially literate and take control of their money. So happy that you’re working towards your CFP, Jacob!!

      • Jacob
      • May 15, 2013
      Reply

      I agree with you, and I’m certainly hoping that no credential financial advisors become a thing of the past! Thanks again Shannon!

    • Jake Erickson
    • May 15, 2013
    Reply

    This is an awesome overview. It sounds like getting the CFP designation can be tough, but it is probably worth it in the end. I think the entire process sounds exciting and I may end up doing it, but probably not until I can quit my current career in order to fulfill the experience requirements. It doesn’t look like you could really do it on the side.

      • Jacob
      • May 15, 2013
      Reply

      Thanks Jake! You could definitely study and take the exam on the side, but experience would be tough unless you just started your own RIA on the side…

        • Laurence
        • August 5, 2013
        Reply

        Jacob, would becoming an RIA fulfill the experience requirements of getting that CFP designation?

          • Jacob
          • August 5, 2013
          Reply

          Yes, passing the series 65 and giving financial advice in exchange for fees would fulfill the experience requirements. I think that’s a good option, but many people fear that they can’t actually find full time RIA work without previous planning experience and a designation like the CFP or something similar. It’s sort of a catch 22.

  11. Great write up Jacob! I was extremely close to taking the CFP myself, but it just did not work out for me. I have few friends who have theirs and it was a TON of work, but they love what they do and it really is a good thing to have if that is the route you choose to go. As a K-State alum (Go State!) it’s cool to see that they are the only ones offering the program they are. 🙂

      • Jacob
      • May 15, 2013
      Reply

      Thanks John, glad you enjoyed it! They have a really unique program there, it’s full of practicing planners who are looking to continue moving forward.

  12. Oops, I see I got ahead of myself in yesterday’s comment. Thanks for this detailed post!

      • Jacob
      • May 15, 2013
      Reply

      You are welcome Tina! Thanks for commenting!

  13. Reply

    This will definitely be useful for anyone with an interest in becoming a Financial Planner – great, comprehensive information! I’m curious what you’re interested in pursuing since you’re opting for a Ph.D. – it’s been my observation that Masters tended to lean more towards industry careers, while Ph.D. was more research/academic related. But perhaps Ph.D. is more leverage in industry careers (or at least has the potential to provide more opportunities)?

      • Jacob
      • May 15, 2013
      Reply

      Thanks Anna! To sum it up, I’m interested in both academia and private practice. The PhD potentially provides a lot of value in the private sector (depending on what niche you decide to pursue) and is a requirement in academia. Not to mention, I love to learn and I want to be an expert in the field. Does that make sense?

  14. Reply

    Oh boy, Jacob. I should definitely not become a financial planner. Just reading this post made me nervous! I can handle things over here at the Hoombah household – that is all. Others do not want me meddling with their money. They need people like you, Glen, and Cash Rebel.

      • Jacob
      • May 15, 2013
      Reply

      Haha, I bet you’d perform better than you think. You and CJ seem to be running a tight ship over there!

  15. I think I missed my calling as a financial planner. It is something I am super interested in and that I would like to learn more about, but I can’t afford the career change just yet.

      • Jacob
      • May 15, 2013
      Reply

      Understandable, it can be a tough path unless you’ve reached financial freedom or you began straight out of college. On the other hand, it’s never too late!

    • Brian
    • May 15, 2013
    Reply

    OK I am a nerd and will admit it. I was looking at the picture of the “notes” assuming they were for someone studying for their CFP… nope… those are totally for a physics class (maybe thermodynamics).

    I’m glad they accept a CFA as fulfilling the education requirements. Getting a CFA is no joke.

      • Jacob
      • May 15, 2013
      Reply

      Dang it Brian, I don’t have those notes yet! CFA is definitely for real and a completely different animal.

  16. Reply

    The CFP designation has always interested me just because I have an extra curricular interest in finance. But since you need so much experience, it doesn’t sound like it’s something personal finance hobbiests could achieve.

 

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