No one can help with someone’s finances more than a certified financial planner (CFP). The few who can receive the CFP certification are masters at helping others save money, plan for retirement, and achieve financial freedom.
Maybe you want to use the power of finances to help people. Maybe you collect in residual income through commissions or have ultimate job security. Whatever the motivation, becoming a CFP can help you achieve your dreams if you want to be a powerhouse in the financial world.
Read on to learn how to become a certified financial planner, the requirements you’ll need, and how to get your certification.
Certified Financial Planner Requirements
Being a CFP is a big job, so becoming one can be a bit of an ordeal. There are quite a few initial hoops you’ll have to jump through, so buckle up.
CFP’s are required to have at least a bachelor’s degree from an accredited university. It’s not necessary, but it is recommended that your degree is in something financial. Business Administration, Accounting, Economics, Finance, or related fields all fit the bill.
This is where that business degree comes in a bit of handy. Anyone who applies to the CFP certification course is required to have 3 years of work experience in a field that is related to financial planning. This experience can involve:
- Personal financial planning for a client
- Taking on a support or apprenticeship role to someone who handles financial planning
- Teaching financial planning
If you go the apprenticeship route, the personal work requirement for you is cut down to 2 years instead of 3.
You can think of a CFP certification as a designation that makes you stand out from all the other financial planners in the world. You’re a notch above stock brokers and cheesy salesmen.
But to actually do financial planning, you will need 2 separate certifications: the Series 7 and the Series 66.
The Series 7 is an exam that gives you the legal authority to buy and sell stocks, bonds, or other securities on the behalf of others. The Series 66 is an exam taken after Series 7 that tests your knowledge of standards and practices within the financial industry.
Without these 2 tests and certifications, you won’t be able to be a CFP.
A little hitch about the Series 7 and 66 is that you won’t be able to take these tests unless you’re sponsored by a financial institution. You can not take these tests on your own.
This will probably mean that you’ll need to spend some time working as a stockbroker or assistant to a financial planner at a firm like Edward Jones.
Many Birds, One Stone
The good news is that you can knock out a lot of these requirements in a single blow.
Getting a job as an assistant financial planner or as a stockbroker right after college can help prepare you in many ways to be a CFP. You can get your work experience in, get training to sell securities and be sponsored for your Series 7 and 66 at the same time.
Most importantly, you will be working in the field with other certified financial planners who can help you learn the ropes. When the time comes to get your certification, you will be much more prepared than the competition.
How To Become A Certified Financial Planner
You’ve got your education, your work experience, and now your preliminary certifications. You’re ready to help people achieve financial freedom.
There are a few more steps you’ll need to take on your path to becoming a CFP.
Once all your qualifications are in place, you’ll need to register for an actual CFP course. A word to the wise: this course is expensive, long, and downright brutal.
The initial registration fee for a CFP course is $595 as long as you don’t book your course at the last minute. You can expect a lot of studying, lecturing, and long nights filled with caffeine.
If your course is self-guided or done on the internet, you can expect that you’ll need about a year before getting through all of it. A course that is taught by lecture can end up being hundreds of hours spent in the classroom.
However you begin your education, do not cram for this step. The exam to be a certified financial planner makes cramming impossible.
The test to be a CFP is a monster and is agreed on to be one of the toughest in the whole industry. It’s on the same level as the BAR exam for lawyers.
The exam you’ll be taking spans 10 hours and takes 2 full days. It is split into 3 separate parts. The first part of the exam features 285 multiple choice questions and test takers are allowed 4 hours to complete it.
The next day, there are 2 sessions of 3 hours each. These sessions feature case studies. You will have to read a section about a family, a retiring business owner, a student who wants to start investing, or other situations.
Once you understand the situation, you will need to answer a series of questions about what is best for the people in each situation.
Topics from the test include but are not limited to topics of estate planning, long term investing, saving money, and questions related to taxes.
The depth and scope of this exam make it impossible to cram the month, week, or the night before. If we could describe how to become a financial planner in 3 words, we would say: study, study, study.
The Background Check
If you pass your exam, you’ll need to take a background check. Any prior criminal record will need to be disclosed beforehand. The background check costs $100.
Maintaining Your Certification
If you pass the test and the background check, it will be between 6 and 8 weeks before you can receive your certification and start helping people save money.
To maintain your CFP certification, you’ll need to take 30 hours of continuing education and pay $325 every 2 years. It’s a pain, but it’s worth it for the payoff.
Your Next Steps
Now you know how to become a certified financial planner. It’s not an easy road, but it’s a journey that will help people and change their lives for the better.
If you’re interested in finance, you can read our money section to learn all you’ll ever need to know.