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The Certified Financial Planner credential is highly valued by financial advisors, because it denotes competency in the field as well as a commitment to a code of ethics and professional conduct. But the exam—two three-hour sessions over the course of a day—is challenging. The pass rate for the July test was 67%, according to the Certified Financial Planner Board of Standards. So for this week’s Barron’s Advisor Big Q, we asked financial advisors who have earned the credential: What is your advice for passing the CFP exam?
Brad Hinton, associate financial advisor and client service manager, Tiras Wealth Management (Ameriprise): I found it helpful to relate the more difficult topics to actual client cases. For example, while I was studying estate-planning concepts, I was working with a client whose will used marital trusts, so it tied in perfectly. The fact that I was already practicing in the field was a big advantage, as I was able to apply this technique around taxes, insurance, and investments as well.
At the time, we were working with a client who went back to graduate school while working with two young children. She would tell her husband that she needed to work late and would use that time to catch up on her studying. I have to say that strategy worked beautifully in my house as well.
For the actual test, I found it better to skip questions if I wasn’t sure of the answers, as you can always come back to them after going through the questions you’re more comfortable with. In several cases, there were questions later in the exam that helped me work through those I’d skipped.
Ashley Bayer, senior associate, wealth advisor, Sequoia Financial Group: For people looking to get into this field before college, look for a university or school that offers a CFP Board-registered program. I took all of those classes as an undergrad, and once you pass them all and graduate, you’re eligible to sit for the exam. Whereas if you go to a college that doesn’t have that program, you have to do the two years of education postgraduation.
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Preparation for the test is huge. I recommend getting a routine in place: Figure out if you’re a morning or night person. I was a morning person, so for me it was waking up early and putting in the hours. Figure out how you learn best. Is it taking practice questions? Reading the material? Joining a webinar program with a live teacher? I personally did best with the practice questions; it’s most similar to taking the test.
For the actual exam, get good sleep, eat breakfast, and give yourself enough time in the morning to prepare and get to the testing center early. If you show up 15 minutes early, don’t sit in your car and be anxious, just get in there and get checked in; you might be able to start early. I recommend taking the full break. You might feel refreshed and ready to get back in there after five to 10 minutes, but taking the full break is huge. You don’t want to start the next section and find you’re mentally exhausted an hour later.
Finally, I can’t imagine taking the exam if I were too hot or too cold. All the testing centers have a mandated temperature, and I found it to be a little chilly. So bring a sweatshirt or a jacket to be comfortable; you can always take off a layer if you’re getting warm.
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Brian Chang, senior wealth advisor at Kayne Anderson Rudnick: I actually teach CFP courses at University of California, Irvine. In strategizing how to pass the exam, the first thing to know is that it’s multiple choice. It could be a case study with several multiple-choice questions, or it could be a straightforward calculation question, or a true-or-false question. If you’ve done the studying, you will know that certain responses are clearly wrong. Getting those out of the way narrows down your choices, and that’s a good technique for anyone approaching a multiple-choice exam.
When it comes to the actual CFP content, it’s a lot of breadth and a little bit of depth. There are a lot of topics—retirement planning, education planning, insurance, estate taxes, ethics, and so on. But you don’t necessarily need to get into the same depth as someone who is studying for the CFA or for estate-planning licenses. Knowing a lot of general concepts will help when it comes to managing your time leading up to the exam.
Leave two to three weeks to go through all the test banks; there’s no better way to prepare for the exam. Lastly, if you’re already involved in wealth management, try to apply some of the concepts you’ve been learning leading up to the CFP exam in your day-to-day work. As you learn about estate planning, tax planning, and investments, you’ll hear questions from clients or prospects about these particular topics. Sharing what you know is one of the best ways to retain knowledge in preparation for the exam. For the exam itself, get a healthy breakfast, and get at least eight hours of sleep. Remember that no amount of studying the night or two before will have a meaningful effect on your outcome.
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Chet Bennetts, assistant professor, financial planning and CFP/ChFC program director, The American College of Financial Services: People have different ways of preparing for the exam. For me, it was locking myself in the basement on the weekends for a couple of months and just going through everything. I did take a prep course before the exam, and I encourage people to do that.
I took every practice test I could, and they were extraordinarily beneficial. A good chunk of the difficulty in the exam isn’t necessarily the content; it’s understanding how you take the test. Some questions are phrased in a way that can trip people up even if they know the content. Also, people often get antsy in test environments, and knowing what to expect can certainly alleviate some of that.
In preparing for the exam, each student needs to know what they’re getting out of this. Whether it’s to better help your clients, to stand out in your community, whatever it is, keep that “why” and that vision in mind. It will help in getting through some of the drudgery of studying or preparing for the exam. It will feel a little better if you’re focusing on your endgame.
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Julie Kelly, financial advisor, Edward Jones: First, you have to make sure you are committed to the experience both professionally and personally, as it will take time away from both aspects of your life. It is a demanding exam. Second, it is important to find a class that aligns with your schedule and best testing style and stick to it. For me, I needed my course to have flexibility: If I couldn’t attend live because of kids, I needed a replay option. My firm offers me the flexibility to set my own schedule, so I blocked the time I needed to study and adjusted my work calendar accordingly.
Third, go through the experience with a colleague or friend. This was massively valuable from an accountability perspective but also from a support perspective. It allowed me to work through difficult subjects with a friend and even made it a little fun together. Finally, if possible, I would highly encourage a “crash course” before you take the exam. The study time is extensive, and this allows you to refresh the material you learned months ago in time for the exam.
Write to advisor.editors@barrons.com
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