As the old adage goes, if at first you don't succeed, try, try again. But as this week's round of the CFP exam kicks off, with tests scheduled from July 11 to July 18, those who fail will have to ask themselves: is it worth it to try again?
Taking the CFP exam, a required step to earn the certified financial planner credential, may be one of the hardest things a financial advisor does in their career. But even harder may be retaking it, given that the pass rate for retakers is consistently lower than for first-timers.
During the last exam round in March, 2,300 out of 3,527 candidates — 65% — passed, meaning over a third failed. For the first-time test-takers in that group, a majority at 78%, the pass rate was 69%. The pass rate for retakers was only 53%.
John Loper, the CFP Board's managing director of professional practice, says that while many factors play into that disparity, "I suspect some retakers may not make the necessary changes to set themselves up for success for subsequent exams."
Loper is a retaker himself who passed on his second attempt. Although he considers himself good at taking tests, he allowed that "I may not have given a level of seriousness to the exam that I should have" on his first try.
John Loper, the CFP Board's managing director of professional practice, knows how it feels to overcome odds as a retaker.
CFP Board
"I've actually had the privilege of talking to a lot of candidates to encourage them to get back up and do it again," Loper said. "One of the things I think is extremely important is to start off with the right frame of mind."
Showing up with focus and intention is especially important, given that even taking the exam once is a costly affair. The fee just to register is $925, although registering early — up to six weeks before the registration deadline — is discounted at $825. Those who register late pay $1025. In addition, the CFP Board requires all candidates for the certification to take a board-approved preparatory course, which can run into the range of several thousand dollars. (The CFP Board and third-party entities do offer scholarships that candidates can apply for, though, and many employers are willing to reimburse workers for the cost of exam preparation.)
Additionally, to qualify for the CFP designation a candidate must fulfill a work experience requirement or demonstrate comparable equivalent professional experience in a related field. That entails logging 6,000 hours of professional experience at a qualifying employer, which comes out to around three years of full-time work at a firm, or 4,000 hours of apprenticeship experience. Candidates must also have a bachelor's degree in any subject area — either before taking the exam or within five years of passing — to qualify.
Then there's the test itself. The exam, taken on a computer, is a six-hour, one-day affair with 170 multiple-choice questions spread out among multiple subject areas, according to the CFP Board website. Candidates have a 40-minute break midway through and can take unprepared breaks as needed. The test is broken up into two three-hour sessions with 85 questions each.
The eight currently tested areas are: professional conduct and regulation; general principles of financial planning; risk management and insurance planning; investment planning; tax planning; retirement savings and income planning; estate planning; and psychology of financial planning.
The competency standards for a CFP license have generally been unchanged in roughly 20 years, but the CFP Board is convening a 15-person expert group to review and update them — an effort expected to last at least through the end of 2024, meaning candidates this year probably won't see any changes in that regard.
Candidates should achieve an acceptably high score in each category to pass the overall exam, according to Loper, who noted that it would be "very difficult to pass the exam showing competency in most of the domains, but perform(ing) poorly in one." Those who pass will not receive a breakdown of their score. However, those who fail will receive feedback in an email that provides a bar graph indicating how they scored in each area of the test — high, medium or low.
Though a daunting experience for many, advisors say taking and passing the CFP exam is worth it for many reasons. Industrywide, the CFP designation is largely considered the gold standard for advisors, one that holds them up to a fiduciary standard to always serve clients' best interest and which demonstrates skills beyond portfolio management. It can also help the advisor command a salary premium.
Financial Planning spoke with test retakers from across the industry about how they beat the odds. Below are their stories of failure and triumph, and several tips on how to follow their path.
The exam is offered three times a year, in March, July and November. The next CFP exam sessions will be offered from Oct. 31 to Nov. 7 and registration is already open. The education verification deadline is Oct. 10. Note that there is a lifetime limit of five attempts allowed per test-taker — although those who took it four or five times before January 2012 can have two more attempts — with no more than three attempts permitted within 24 months.
Dawn Mabery Chestnut, the CEO of Mabery Consulting, said she "threw the kitchen sink" at her final attempt on the CFP exam and passed in 2022.
Dawn Mabery Chestnut
For Dawn Mabery Chestnut, the fifth time was the charm. "I think one of the things that got me through is that I just knew, one way or the other, it would be over," Mabery Chestnut laughed. "So either I would pass it and have the CFP, or I wouldn't pass it."
Today, Mabery Chestnut is the CEO of Mabery Consulting, a registered investment advisor based in Washington, D.C.
"You really come away defeated," she said of her unsuccessful attempts. Mabery Chestnut said she first took the exam in 2017, and her fifth attempt was in November 2022, not long after she graduated with a master's degree in financial planning.
To motivate herself, Mabery Chestnut thought about the value that a CFP credential would add to her credibility as an independent RIA owner. "A million people will tell you a million different things. But it's really got to come from within. Why you want to do this, why you're going to really give that commitment that it takes to pass that exam."
Mabery Chestnut, who identifies as African American, said she grew up in a low-income household with eight siblings and parents who worked blue-collar jobs. "Talking about money and saving for college and saving for future things to buy, homes and stuff, that was just not the world I came from," she said.
Mabery Chestnut previously worked as a consultant and volunteered her time teaching basic financial literacy to students. In search of more resources, she stumbled upon the financial planning profession and fell in love. "I actually enjoy the act of putting together a financial plan, getting to know and understand my clients," Mabery Chestnut said.
Seize the opportunity to improve
Melissa Cox, a certified financial planner at Fetterman Investments.
Femme Force Dallas
Melissa Cox was devastated when she took and failed the exam in March 2008 (she passed on her second attempt that July). Cox was leaving the office for a celebratory lunch with a friend when she received an email with the bad news. It felt like "something right out of a proverbial country western song," Cox recalled.
"I cried all the way to the restaurant and pulled myself together enough to go inside, only to realize I had left my wallet at home and had no way to pay for the meal." The manager of the restaurant kindly hugged Cox and consoled her, along with her friend.
The friend helped Cox realize that she could reframe the situation to push herself to grow. "What I didn't realize at the time was I hadn't truly grasped the major concept of estate planning, and it allowed me to buckle down and get a better understanding of the different tips and techniques," she said.
Cox is now a certified financial planner at Fetterman Investments, a Dallas-based financial planning and investment management firm that is a subsidiary of RIA ISC Advisors.
Avoid cramming, commit the time
Michael Cooper, a Private Wealth Advisor and Certified Public Accountant at Ameriprise.
Tom Pich
Michael B. Cooper, a private wealth advisor and certified public accountant at Ameriprise based in New York, recalled trying to cram for the exam on his first attempt back in 1999.
"I received the Dalton study materials and took a week off and locked myself in the library," he said. "This was a big mistake, since the exam had so much information and was not a knowledge test."
Back then, the exam was even longer at 10 hours, Cooper recalled. "It was very discouraging to fail the exam, but I did not prepare myself properly and did not take in-person classes," he said. "It is more difficult than it appears to be."
For his second shot, Cooper said he committed to live classes by Dalton, identified his weak areas and spread out his study time over three months. He took the exam six months later and passed.
Steve Olabode Oniya, the president and chartered financial consultant at OM Investments.
Luxe Studio Productions
Steve Oniya, a retaker who passed the exam in 2022, reviewed thousands of practice questions — twice — and asked loved ones and employers for support and understanding as he studied. "You need time to pull away from them," he said.
"It's a marathon, not a sprint — work-life balance, rewards, love and wellness are needed to endure the struggle," Oniya said.
Oniya is the president and chartered financial consultant at OM Investments, an RIA based in Houston.
Do the review class
Ryan Eyerman, a financial advisor at CKE Financial Services.
Justin Casalandra
One technique frequently cited by successful retakers was taking advantage of a review class prior to the exam.
"I did a review course the second time," Loper said, adding that there are an array of resources the CFP Board provides to all test-takers, including practice tests, mentors and an online forum and study groups. "We always ask candidates, are you taking advantage of all of that?"
For Ryan Eyerman, a Westlake, Ohio-based financial advisor at CKE Financial Services, the live review was an important component of his successful second attempt in July 2022, after his first try in March 2021.
It "helped to keep me motivated and structured instead of trying to organize my own self-study program," Eyerman said. CKE is a wealth management firm affiliated with Raymond James.
Build up your support network
Eyerman said the community he discovered in online forums kept him going after his disheartening first attempt. "The thing that really motivated me to take it again was the encouragement from people on online message boards that had failed and were able to pass on a second or third attempt," he said.
In passing the torch to future CFP exam retakers, Eyerman had one more piece of advice to give: "Carefully read the question to understand what it is actually asking for. A lot of the questions will include extraneous details even though the question only asks about one specific topic."
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