If you're hoping to pass the Certified Financial Planner (CFP) exam, you will want to be as prepared as possible. What does that involve? Understanding the structure of the exam, the types of questions you'll be asked, and what is expected of you will help you study better, save time, and get the pass you need. Let's dive into it.
The structure of the CFP exam
What is the structure of the CFP exam?
The CFP exam has 170 multiple-choice questions that you have six hours to answer. The CFP exam includes a mandatory 40-minute break in the middle, so it is divided into two three-hour sessions.
First half of the exam: 3 hours
Mandatory break: 40 minutes
Second half of the exam: 3 hours
In total, the exam process will be almost seven hours long.
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What material is on the CFP exam?
The CFP exam tests your understanding of financial planning in the real world. Rather than just memorizing questions and answers from a Q-bank, the CFP exam challenges test takers to apply the CFP concepts to real-world examples. This is where most CFP candidates fail. The CFP Board provides the essential formulas and tax tables required for the exam, so you don't need to memorize this information. You need to be able to understand the concepts, apply them to the questions, think critically, solve problems, and demonstrate deep knowledge of the subject matter.
What topics does the CFP exam cover?
The main knowledge areas of the CFP exam include:
General financial planning principles
Investment and tax planning
Estate planning
Risk management
Insurance planning
Income planning and retirement savings
Financial planning psychology
Professional conduct and regulation
The CFP exam will also test your knowledge of:
Client-planner relationships
Collecting and analyzing information
Developing, communicating, implementing, and monitoring recommendations
Evaluating the financial status of an individual/firm
What is the CFP Exam Passing Score?
Keep in mind that there isn’t a specific score needed to pass the CFP exam. At least, the CFP Board does not disclose a particular score. Instead, the board uses exam results to gauge a CFP candidate's overall competency in all required areas. This is so that you can show you understand every concept. Consider this: one person gets 90% of the questions correct, with a few wrong answers spread across different topic areas. Another CFP candidate gets a 90% score but with perfect executive of most topics and totally bombs one topic. The first person would likely pass the exam, while the CFP Board would certainly fail the second student. This is why there is not a specific grade necessary to pass. Instead, CFP candidates have to demonstrate an understanding of all required topics.
How Can You Prepare for the CFP Exam
With all this in mind, how can you go about passing the exam? The CFP exam is challenging, but that doesn't mean you will fail. CFP students fail when they exhaust themselves trying to memorize answers and don't actually understand the concepts.
Here are the 7 steps for you to pass the CFP exam:
Decide the proper testing window
Select an exam testing window at least four months away to give you enough time to study.
The exam windows come in March, June, and November and generally last between one and two weeks.
Create a study routineÂ
You should be studying at least five days a week.
Some of your study periods need to be long, at least two hours. This is to help your brain develop the endurance it needs to sit for the six hour test. Plan these sessions for the same day and time that you have scheduled your CFP exam. This routine will put your brain in the right mental state come exam day.
If you can study with a friend or as part of a CFP prep class, you will have accountability to keep you going when you don't feel like studying.
Create a study plan
Make sure you cover every topic mentioned above. The CFP exam has 12 different knowledge areas. Give yourself time to master each one.
Understand your learning style
Here at Nissim Tutoring, we pay attention to the science of learning. Not everyone learns the same. Some people are visual learners, others learn best by writing or reading. Figure out your preferred learning style so you can tailor your study tactics to your learning style.
Study practice questionsÂ
Q-banks are helpful, just make sure it's not the only thing you do.
Take practice exams
Take a CFP practice exam once early on, maybe one month in. This will give you a good metric for which areas you know and which CFP topics you struggle with. You will need to keep reviewing every topic regardless, but you can dedicate more time to mastering the challenging CFP material.
Once you feel you've mastered the CFP exam material, you should take a couple more practice tests toward the end of your prep time. This will improve your test taking ability, including time management and stress management when difficult questions come up. Taking a test is a skill in its own right, and overlooking it can be detrimental to CFP candidates.
Consider a CFP prep course
If there are certain aspects of the CFP exam that you just can't figure out on your own, that's okay. Many CFP candidates take prep classes to get that little extra help. A professional CFP tutor can answer questions, explain things in a new way, challenge you to really master the material, and provide the accountability you need.
If you feel overwhelmed trying to create a study plan that covers every topic and organizes your time well, you don't have to do it alone! A CFP tutor can provide the study schedule you need to get every concept mastered in time for the exam.
Why are CFP exam prep classes helpful?
Most CFP candidates fail because they don't know how to study well. It's not that you aren't qualified for the exam, it's just hard to know how to study. Instead of wasting countless hours going through a mind-numbing question bank, a CFP tutor can help you identify topics where you struggle and go over core exam concepts to make sure you really understand the material.
Nissim Tutoring's online CFP prep courses provide:
✔ Study schedules to make sure you cover all topics
✔ Structure and accountability
✔ A real, live instructor who can ask questions
✔ Small group classes for personal attention
✔ A hands-on learning environment to apply concepts to real-life scenarios
✔ Mentoring and support
In Conclusion
If you are dreaming of getting your CFP certification, an online CFP exam prep course is a great way to set yourself up for success. Avoid the headache and let a professional CFP tutor guide you through the exam prep process so you can pass on the first attempt!
Sign up for a CFP class today or schedule an assessment with your CFP tutor to figure out your next steps together.
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