No matter your money concern, there's a financial advisor who can help demystify any financial confusion. Looking towards fees, credentials and personal needs can help point you in the right direction.

Understanding your financial needs 

Every stage of life brings financial changes. The focus of early adulthood may revolve around managing newly acquired credit cards and a plan for student loan payments, and the focus of someone in their 40’s may still be paying off student loans, along with caring for aging parents and learning about options trading. Regardless of the stage you’re at, a financial advisor can provide clarity and an actionable plan for your needs. 

Before a financial advisor can even begin to help you map out a course of action, however, you need to know what you want to do with your money. A good place to start is by asking yourself what your financial goals are. Financial goals can vary from funding an emergency fund to eliminating financial risks such as hefty credit card debt, to better positioning yourself to start a business. Goals also help you by setting your timeline. 

Several resources online such as the toolkit from Newark based Financial Educator Tiffany “The Budgetnista” Aliche and the financial goal sheet provided by Rutgers University can assist in determining smart goals and developing a financial framework. 

Having even a general idea of all these items can make the selection of a financial advisor an easier process.

Types of financial advisors

With 480 financial firms and 1407 advisors in New Jersey, there’s no shortage of advice to  transform your finances. The question is, what kind of financial advisor do you need?  

Financial advisors go by many names, but they may not all be certified or have any specific training. Even someone who has gone through training and testing to be a practicing certified financial planner (CFP)  may choose to go by various titles. They may call themselves financial planners, financial therapists,or a financial coach. Others may choose a name that aligns with their speciality such as wealth manager, retirement specialist, estate planner, cash flow analyst, portfolio manager amongst others. However, anyone who gives investment advice must be registered with the Securities Exchange Commission.

Credentials

Anyone can study to specialize in certain financial areas, and most anyone with some knowledge of and experience with money can call themselves a financial planner. According to the Financial Industry Regulatory Authority (FINRA), a self-regulating authority for financial services, a financial planner “could be brokers or investment advisers, insurance agents or practicing accountants—or they have no financial credentials at all.”

So it can be challenging to determine who is credible. One way to do that is to look at the letters  following the person’s name. Some of the most common and trusted certifications include the PFS (Personal Finance Specialist), CFP (Certified Financial Planner), CFA (Certified Financial Analyst) and CEPF (Certified Educator in Personal Finance) certifications. All of these require several courses and exams in various areas of finance. However, CEPF is a self-study program recognized as a professional designation.

Financial advisors, on the other hand, are required to pass the NASAA’s Series 65 exam, which is administered by FINRA. Financial advisors can be brokers, insurance agents and estate planners. Some advisors may be fee-only fiduciary advisors, which means they have a responsibility to you, their client, to pick only the products and services that will be best for you.

Like  with any role, even credentials may not always be a true indicator of how skilled someone is with financial planning. Testimonials from previous clients can be extremely helpful in determining how beneficial they could be to you, especially if the testimonial is from someone in a similar financial situation.

Fees 

Choosing a financial planner or advisor often comes down to cost and affordability. As such, it’s common to ask what is the “going rate.” Some financial advisors charge a  project or service rate, hourly rate, or flat fee for a year-long retainer. Other financial advisors charge on a sliding scale based on the amount of the accounts or money held with them commonly referred to as assets under management (AUM). Some fees are commission based depending on the profit from investments. 

Because of the various payment structors, it’s not uncommon to find one financial advisor charging $200 per hour and another advisor charging up to $7,500 for an annual retainer. 

While the cost may sound steep, it may not be a deterrent. When overwhelmed with cost and pricing options, it’s best to revisit your personal financial goals and needs. Keep in mind that some advisors have their own requirements about who they work with. Depending on their structure, some advisors will only take clients who have over $200,000 in assets to manage while others may have a net worth requirement. 

Where to look to find a financial advisor

The hardest part of finding a financial advisor is knowing where to look. Fortunately, there are several websites, directories and community organizations that can point you in the right direction. 

• Online advisor search. Using a search engine may seem obvious, but what may not be so obvious are the search terms to use to find exactly what you need. If you are hoping to better understand and leverage mutual funds, searching for “wealth management in NJ” may help.U.S. News features a database allowing you to search for private financial advisors or financial firms nationally or local to you in New Jersey. 
• NAPFA (The National Association of Personal Financial Advisors). NAPFA provides a list of advisors as well as pertinent information about working with financial advisors. 
• New Jersey Universities. Some experienced financial advisors teach classes or work closely with universities. Others may earn their CFP at a university, such as New Jersey City University. Ask  local colleges and universities if they have relationships with a knowledgeable and reliable financial advisor to connect you with. 
• Garrett Planning Network. Getting poor service from someone who doesn’t know what they’re doing is a real fear for those looking to get their finances in order. The Garrett Planning Network can help alleviate some of that risk by searching their database of financial advisors that are licensed or certified. They also only list financial advisors who don’t have net worth, income or asset requirements for their clients.
• Chambers of Commerce. It’s not uncommon for financial advisors and financial services firms to be active members of their local Chambers of Commerce. Inquiring with the Princeton Mercer Regional Chamber, MIddlesex County Regional Chamber of Commerce, African American Chamber of Commerce amongst others can be helpful in locating New Jersey based financial advisors. 
• Friends and family. Those closest to you are amongst those you trust the most so you’re likely to find a reliable advisor with sound experience to meet your needs. It can help to ask a friend with a similar lifestyle and goals for a personal recommendation since many financial issues and solutions can vary based on where you are in life. Someone with three kids in middle school in  pursuit of F.I.R.E. (financial independence/retire early), may not be able to recommend a financial advisor if your financial goal revolves around creating an estate plan that leaves money to heirs and funds a charity. 
• Alignable. Alignable is a small business community social network for professionals to connect, refer and collaborate with people in various industries. By joining the online community for your New Jersey town, you’ll be able to  view the business directory for the area and easily navigate to financial advisors servicing that location.
• The Fee Only Network. The Fee Only Network could be ideal for people looking for financial advisors in New Jersey who don’t get paid from commissions earned on investment packages sold to you. 
• ‌SmartAsset is a personal finance website, and their flagship service is helping people find vetted financial advisors.

How to choose a financial advisor (things to consider)

There are several other factors to keep in mind when choosing a financial advisor, aside from fees and credentials. You may also want to keep in mind the advisor's specialty, client experience, and meeting options. Even though a financial advisor can offer guidance on several aspects of money management and solutions, they may not be well-versed in what you need. For example, it is not ideal to work with someone whose experience is only advising those in late-middle age if you have a growing family with small children. Or if the high cost of property taxes in New Jersey is concerning, you may prefer to select a financial advisor with extensive knowledge with real estate and debt management.  Financial advisors can specialize in retirement planning, debt management, investment advice, tax planning and more. It makes sense to choose someone aligning with your financial goals and needs. 

You may also want to consider your availability and scheduling when selecting an advisor. Your job, home life and free time can determine if you require someone who can offer virtual sessions or someone who only does in-person meetings. Additionally, someone just starting their financial journey with fewer assets to manage may prefer someone who offers flexibility in the amount of hours they provide versus someone requiring you to sign a contract for a full year. 

Finally, the advisor’s financial philosophy and ability to be empathetic can play a big role in whether or not you feel at ease and receptive to the guidance provided. Money can be just as emotional as it is transactional, and someone who isn’t empathetic to your situation may not be a good choice. Or you may prefer someone who isn’t as empathetic and uses a “tough love” approach instead. Be honest with yourself about what you respond to so you can find an advisor who delivers information in the capacity you need.

Questions to ask a financial advisor

How do you operate?

This will give you an idea of how many sessions you can expect and what their framework is for guiding a client. It will also let you know how much access to the particular advisor you have. For example, can you expect answers to emails and phone calls outside of the regular sessions, or will you have to wait till your scheduled appointments?

What are your values in relation to personal finance?

You don’t only want to choose someone who knows about money. Ideally, the financial advisor you work with will also align with your values or be able to offer guidance that aligns with your values. 

What is your fee structure?

Considering the various ways personal advisors are compensated whether hourly, fee-only, retainer, commissions, or fee-based, you want to make sure whoever you work with is upfront about them. An advisor who can clearly answer how they are paid is one way an advisor can build your trust. 

Are you a fiduciary?

Working with a fiduciary is one way to determine if an advisor works with their clients’ best interest in mind as opposed to being motivated by commissions. 

How do you define “financial advisor?”

Because financial advisor is a very broad term, asking one how they define it can be helpful in understanding whether or not you are speaking to the person who can help with your needs. 

What kind of clients do you tend to work with? 

Even though financial advisors may be capable of working with anyone, it’s a good idea to work with someone who is familiar with people who are similar to you or similar to your financial situation. If you recently moved to New Jersey  from another state, it could be helpful to know your advisor has already assisted other new residents adjusting to the financial landscape of New Jersey such as higher property taxes.

© Provided by SmartAsset SmartAsset: CFP exam: how to study and what to expect

If you’re interested in becoming a certified financial planner, passing the CFP test is a necessary step. The CFP test is a 170-question multiple choice test that’s designed to thoroughly test your knowledge about financial planning. Preparation is key, as the test has a reputation for being difficult. Developing a plan for study and knowing what to expect on test day can increase your odds of earning a passing grade.

If you are looking to grow your financial advisory business, check out SmartAsset’s SmartAdvisor platform.

What Is the CFP Exam?

The CFP test is a comprehensive test that gauges your ability to apply financial planning concepts to real-world scenarios. Passing the test is a requirement for obtaining a certified financial planner designation. The test is administered by the CFP Board three times a year in March, July and November, both in person and through remote testing centers.

To complete the test, you must answer 170 multiple-choice questions. The test is administered in two three-hour sessions. There is a fee to take the test, which is determined by your registration date. The fee schedule is as follows:

• Early registration – $825
• Standard registration – $925
• Late registration – $1,025

You can register to take the CFP test online at the CFP Board website. To register for the test, you must either complete a CFP Board registered program or complete equivalent coursework. Submitted coursework is subject to a transcript review by the CFP Board.

If you opt for the second route, you have to verify your coursework before the test date. Otherwise, your registration will be withdrawn, and you’ll be charged a $500 postponement fee.

You don’t need a bachelor’s degree to take the CFP exam. You do, however, need to complete a bachelor’s degree program within five years of passing the exam.

What Does the CFP test Cover?

The CFP test spans several areas of core knowledge that the CFP Board deems necessary to work as a certified financial planner. Those core areas include:

• Professional conduct and regulation
• General principles of financial planning
• Risk management and insurance planning
• Investment planning
• Tax planning
• Retirement saving and income planning
• Estate planning
• Psychology of financial planning

Each section is assigned a different weighting. For example, retirement savings and income planning account for 18% of the test questions while the psychology of financial planning is just 7%.

All questions are pass/fail and count as one point each toward your score. In terms of the minimum score needed to pass, the CFP Board does not disclose one. Instead, the Board uses the results of the test to gauge how competent someone is to carry out the duties of a certified financial planner. As of November 2022, the test had a 64% pass rate.

How to Study for the CFP Exam

© Provided by SmartAsset SmartAsset: CFP exam: how to study and what to expect

The CFP test is designed to test what you know about financial planning and your ability to apply those concepts to situations you might encounter when working as a financial planner. With that in mind, here are a few helpful tips for preparing for the CFP exam.

• Start early. While it takes just a few hours to complete the CFP exam, it can take months of study to fully prepare. Depending on how much time you have available, you may want to begin your studies three months, six months or even a year in advance of your anticipated test date.
• Take advantage of CFP resources. The CFP Board provides free study resources, including a full-length practice exam, study guides and a mentoring program to help you prepare. Those benefits are all included with your test registration fee.
• Create a study schedule. Having a set study schedule can help you to get organized and keep an appropriate pace so that you’re able to cover everything before the exam. You can set your schedule to include specific days and times, which can help you stay committed to the plan.
• Consider a course. Taking a CFP test prep course might be helpful if you’re more comfortable learning in an instructional environment, rather than just doing a self-paced study. You’ll typically pay a fee for these courses, but it may be worth it if you’re able to glean new knowledge or study skills as a result.

Practice makes perfect. And the more problem-solving activities you’re able to complete, the more prepared you may be by the time test day rolls around. Again, what’s most important to keep in mind is how you can use the concepts you’re learning practically when working with clients as that’s what the CFP Board is most concerned with.

What to Expect When Taking the CFP Exam

How you prepare for the day of the test depends largely on whether you registered to take the test remotely or in person. If you’re taking the test at a testing center, you’ll need to have a valid, government-issued ID to gain entry.

You’ll also need to offer a fingerprint, take a photo and complete a body scan upon entering the test center. A body scan isn’t required for remote testing, but you will need to provide a video of your test-taking workspace. And you will need to demonstrate you’re not concealing any cheat sheets on your person.

Before the test begins, the test administrator will go over the rules and regulations of the test center. They’ll review your calculator to make sure it’s up to standard and provide you with a whiteboard to use during the exam. Once the preliminaries are over, you’ll be shown to your test seat.

The test is self-paced but it’s important to keep the three-hour time limit in mind as you work through each section. You’ll have a five-minute tutorial to complete beforehand, followed by 180 minutes to complete 85 test questions. There’s a 40-minute break period, followed by the second 180-minute block to complete the remaining questions.

You’ll have a chance to take a brief survey once the test is over to share your feedback. After you complete the CFP exam, you’ll get your results by email, typically within four weeks.

Is Taking the CFP test Worth It?

© Provided by SmartAsset SmartAsset: CFP exam: how to study and what to expect

Taking the CFP test is worth it if you want to pursue a career as a certified financial planner. You won’t be able to do so without first taking the exam.

Working as a certified financial planner can be rewarding if you’re passionate about helping people to reach their financial goals. The CFP test can prepare you for a wide range of situations you might encounter when working with clients. And it can help you to fine-tune your problem-solving skills.

However, you don’t need to obtain a CFP designation if you’re interested in becoming a certified educator in personal finance (CEPF) or a certified credit counselor. While there are educational requirements that need to be met for those designations, they’re not as rigorous as the CFP exam.

The Bottom Line

The CFP test can seem a little daunting and early planning can be critical to your success in achieving a passing grade. Knowing what the test covers, how to study for it and what happens on the test day can help you to approach it calmly and confidently.

Tips for Growing Your Financial Advisory Business

• Partner for growth. If you’re interested in scaling your financial advisory business, you don’t have to go it alone. SmartAsset’s SmartAdvisor platform makes it easy to match with vetted financial advisors who fit your ideal client profile, without having to do any active canvassing. You can get leads delivered to your inbox and you only pay for those you connect with. If you’re ready, get started now.
• Keep an eye on trends. Knowing what your clients want is key to better meeting their needs. It’s also central to attracting new prospects to your business. SmartAsset’s recent survey reveals the top year-end moves advisors are discussing with clients.

Photo credit: ©iStock.com/Michele Pevide, ©iStock.com/Sean Anthony Eddy, ©iStock.com/MangoStar_Studio

The post CFP Exam: How to Study and What to Expect appeared first on SmartAsset Blog.

Talking about money with your romantic partner or spouse can be tough — especially when you don’t understand or know much about how they think about money.

A new survey finds that 64% of couples admit to being “financially incompatible” with their partners, with different philosophies about spending, saving, and investing their money.

Unfortunately, this friction can lead some to commit so-called financial infidelity, hiding purchases from their partner. In this survey by the fintech firm Bread Financial, 45% of coupled adults admitted they’re guilty.

Even if there is no financial cheating, money issues can still cause strain in relationships, arguments or even divorce. One in 5 couples identifies money as their greatest relationship challenge, according to the most latest Couples & Money survey by Fidelity Investments.

Many financial advisors recommend communicating about how each of you handles your finances to figure out your partner’s “money mindset.” It’s part of the work you need to do to help build a stronger relationship, financial psychologists say. Having that “money talk” is more important than whether you merge your accounts or go with the “yours, mine, ours” approach.

So how do you start what can be a difficult conversation? Here are some tips about delving into the “money talk” no matter what stage of the relationship you’re in.

If you’re newly partnered or married

Gen Z and millennials may argue with their partner over finances more than older couples. Millennials may also talk more frequently about money than baby boomer couples. But if you’ve just coupled, what’s that icebreaker?

Start with a simple question about how your partner handled their finances before you got together. A simple question like whether they’re taking advantage of their 401(k) or 403(b) retirement plan at work can tell you a lot about their planning, said Lawrence Sprung, a certified financial planner and founder and wealth advisor at Mitlin Financial in Hauppauge, New York. Then do this:

Open the books: Show one another your financial information. This “show and tell” can be a way to talk about how much student loan or credit card debt you have or how you intend to save for retirement.

Set a time and place for a special date: Pick a day and location that’s most convenient and calm for both of you for the money talk. You want to be able to focus and not be interrupted.

Align your finances: Figure out who will handle certain money matters or how you’ll split these expenses. Make sure you both have access to shared accounts. Then decide who will pay which bills or if you’ll pay for them from a joint account.

For those married for several years

Among women, more than 20% of marriages that end in divorce last about 10 years, according to the U.S. Census Bureau. Part of the reason those relationships end may be due to a lack of communication on many fronts. “Money dates” may become less frequent as other priorities take over, such as moving into a new home, starting a family, changing jobs. Still, it’s important to keep talking:

Review your household budget: Set aside time to review your total financial picture at least once a year. Going over the year-end credit card, savings, investment, and retirement account statements can be a good place to start to see where you stand.

Maximize your resources: You want to make the most of your combined income. Whether your merge accounts or not, you’ll need to figure out how to build your savings, while affording your necessary and discretionary expenses. Pay yourselves first by making regular savings account contributions to build an emergency fund and putting part of your pay in a retirement plan for the future.

Then, “outline what your shared expenses are, what they cost, and how much each partner will contribute to the expenses,” said Dr. Megan Ford, a financial therapist based in Athens, Georgia. “This isn’t always an easy 50/50 split when incomes are uneven” — or if one of you is out of work right now. That’s why stashing cash in an emergency fund while working is essential.

If you’re an older couple near or in retirement

Many older couples say thinking about saving enough for retirement and making enough money for the life they want are two issues that keep them up most at night. You’ll likely sleep more soundly if you do this:

Get on the same page about your future: The Fidelity study found 48% of couples disagree about what age they play to retire, and 52% disagree about how much should be saved by that time. Consider you may live well into your 80s or longer. Plan for how much money you will need for future goals and make sure it will be enough to last.

Focus on managing debt: While shopping and spending may cause the biggest rift in relationships, the second most common contentious financial matter for boomers is credit card debt, according to Bread Financial’s survey. It’s time for both of you to review those annual statements again to see how much debt you are in.

Talk to a financial professional: Having both of your speak to a financial advisor can help you continue to focus on your future, develop a financial plan and build a financial team to help. The earlier you speak with a financial professional, the better.

All couples need to plan ahead for ‘what if’

One of the most important conversations couples can have about their finances — no matter how old they are — is the one about who will make decisions for them if they get ill or are injured and can’t make them for themselves. At the same, it’s important to discuss the financial legacy you’d like to leave your partner and/or loved ones. All of that is essential to estate planning.

Make sure you have critical estate-planning documents: In addition to your will or trust, you should have a health-care proxy, living will or advanced medical directive, and durable power of attorney.

Review beneficiaries on your retirement and life insurance plans: Make sure they reflect the person that you want to be named, especially for same-sex couples or if you’re on a second marriage or are now uncoupled after a divorce or death of your partner.

SIGN UP: Money 101 is an 8-week learning course to financial freedom, delivered weekly to your inbox. For the Spanish version Dinero 101, click here.

This article was originally published on TODAY.com

Money can’t buy happiness directly, but it seems like paying a financial advisor sure can help.

A new survey found people with more than $1.2 million in household assets report higher levels of happiness when working with a financial advisor compared to those who don’t have an advisor. The finding is part of Herbers & Company’s inaugural Consumer Financial Behaviors Study, which polled 1,000 consumers across the U.S.

A financial advisor can help you manage assets and plan for retirement. Find a trusted advisor today.

“As individuals move past $1.2 million of assets, those who work with financial advisors rapidly increase in happiness, while those without advisors rapidly become less happy,” wrote Sonya Lutter, the certified financial planner (CFP) and licensed therapist who authored the study.

Herbers & Company is a consultancy firm that specializes in helping independent financial advisory firms grow their businesses.

How Happiness is Measured

To quantify a respondent’s level of happiness, the survey presented each consumer with a list of 43 questions concerning his or her daily behaviors and interactions. The survey also pinpointed four core principles of happiness – fulfillment, intention, impact and gratefulness – and gauged how much respondents identify with each.

All participants in the survey have at least $250,000 in household assets.

The survey found that 66% of respondents who work with a financial advisor reported heightened levels of all four core factors of happiness. Only 34% of people without an advisor identified with those four principles in the same way.

The results of the study also suggest that those with financial advisors experience greater satisfaction outside of their relationship with money.

“People who have financial advisors are not only happier with their finances, but they are also far happier about their personal relationships and their communication with their partners,” wrote Lutter, a former administrator of applied human sciences at Kansas State University. “While it’s possible that happy couples might be more likely to hire financial advisors, it’s also possible that working with a financial advisor gives couples an opportunity to talk about financial goals, and thereby gives them a happiness boost.”

Which High-Net Worth Individuals Are Happiest?

Then again, the more money a person has, the happier they'll be, right? Not exactly.

Respondents with $1.2 million in household assets reported the same level of happiness, whether they work with a financial advisor or not. Those above that threshold who work with an advisor reported significantly higher levels of happiness than those without advisors.

The largest disparity in happiness was observed among the richest respondents to the survey. Of high-net worth individuals with $6 million or more in assets, those with a financial advisor reported the highest levels of happiness across the study. Meanwhile, those without a financial advisor reported the highest levels of unhappiness in the study, despite owning $6 million or more in assets.

“For those who make it to the top 5% of wealth in the U.S., working with an advisor can mean the difference between being happy with financial success or allowing money to decrease happiness,” Lutter wrote. “It appears that a financial advisor is needed to increase happiness levels above the $1.2 million threshold.”

Bottom Line

The old axiom is true, money can’t buy happiness. Then again, a latest Herbers & Co. survey found that people with the most money are happiest when working with a financial advisor. However, those with over $6 million in household assets but no advisor reported the highest levels of unhappiness in the study.

The survey shows happiness levels fluctuate among people with fewer household assets, regardless of working with an advisor or not. But once individuals surpass the $1.2 million mark, those who work with a financial advisor report much higher levels of happiness than those who go it alone.

Tips for Finding a Financial Advisor

• Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors in your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
• When looking to hire a financial advisor, it’s important to do your due diligence and interview at least three possible candidates. Ask about their account minimums, fee structures, investing philosophies and any special certifications they hold, like the CFP designation. You’ll want to take all of these factors into account when choosing an advisor.
• If you want to take a closer look at an advisor and/or their firm, search for them on the Securities and Exchange Commission’s Investment Adviser Public Disclosure database. This tool allows members of the public to access an advisor’s Form ADV, which contains important information about their business and displays any legal or regulatory disclosures on their record.

Photo credit: ©iStock.com/JohnnyGreig

Artificial intelligence laboratory OpenAI launched ChatGPT in November 2022. In the months since, the internet has been abuzz with discussions of how advanced AI could reshape society — including the financial services industry.

The MarketWatch News Department was not involved in the creation of this content.

Feb 07, 2023 (The Expresswire) -- Pre and Post Covid Report Is Covered | Final Report Will Add the Analysis of the Impact of Russia-Ukraine War and COVID-19 on This Industry.

[119 Pages Report]"Automotive Testing, Inspection, and Certification (TIC) Market" size is projected to reach Multimillion USD by 2029, In comparison to 2023, at unexpected CAGR during 2023-2029 and generated magnificent revenue. This study provides all the most latest market facts and trends for your business analytics and strategic decision-making. This Automotive Testing, Inspection, and Certification (TIC) Market research report is meant to be helpful to all business owners, investors, and stakeholders in the industry. It provides significant insights into the factors affecting the global Automotive Testing, Inspection, and Certification (TIC) market and the industry's yearly growth.

The MarketWatch News Department was not involved in the creation of this content.

If you purchase a product or register for an account through one of the links on our site, we may receive compensation.

If you’re interested in becoming a certified financial planner, passing the CFP test is a necessary step. The CFP test is a 170-question multiple choice test that’s designed to thoroughly test your knowledge about financial planning. Preparation is key, as the test has a reputation for being difficult. Developing a plan for study and knowing what to expect on test day can increase your odds of earning a passing grade.

If you are looking to grow your financial advisory business, check out SmartAsset’s SmartAdvisor platform.

What Is the CFP Exam?

The CFP test is a comprehensive test that gauges your ability to apply financial planning concepts to real-world scenarios. Passing the test is a requirement for obtaining a certified financial planner designation. The test is administered by the CFP Board three times a year in March, July and November, both in person and through remote testing centers.

To complete the test, you must answer 170 multiple-choice questions. The test is administered in two three-hour sessions. There is a fee to take the test, which is determined by your registration date. The fee schedule is as follows:

• Early registration – $825

• Standard registration – $925

• Late registration – $1,025

You can register to take the CFP test online at the CFP Board website. To register for the test, you must either complete a CFP Board registered program or complete equivalent coursework. Submitted coursework is subject to a transcript review by the CFP Board.

If you opt for the second route, you have to verify your coursework before the test date. Otherwise, your registration will be withdrawn, and you’ll be charged a $500 postponement fee.

You don’t need a bachelor’s degree to take the CFP exam. You do, however, need to complete a bachelor’s degree program within five years of passing the exam.

What Does the CFP test Cover?

The CFP test spans several areas of core knowledge that the CFP Board deems necessary to work as a certified financial planner. Those core areas include:

Story continues

• Professional conduct and regulation

• General principles of financial planning

• Risk management and insurance planning

• Investment planning

• Tax planning

• Retirement saving and income planning

• Estate planning

• Psychology of financial planning

Each section is assigned a different weighting. For example, retirement savings and income planning account for 18% of the test questions while the psychology of financial planning is just 7%.

All questions are pass/fail and count as one point each toward your score. In terms of the minimum score needed to pass, the CFP Board does not disclose one. Instead, the Board uses the results of the test to gauge how competent someone is to carry out the duties of a certified financial planner. As of November 2022, the test had a 64% pass rate.

How to Study for the CFP Exam

The CFP test is designed to test what you know about financial planning and your ability to apply those concepts to situations you might encounter when working as a financial planner. With that in mind, here are a few helpful tips for preparing for the CFP exam.

• Start early. While it takes just a few hours to complete the CFP exam, it can take months of study to fully prepare. Depending on how much time you have available, you may want to begin your studies three months, six months or even a year in advance of your anticipated test date.

• Take advantage of CFP resources. The CFP Board provides free study resources, including a full-length practice exam, study guides and a mentoring program to help you prepare. Those benefits are all included with your test registration fee.

• Create a study schedule. Having a set study schedule can help you to get organized and keep an appropriate pace so that you’re able to cover everything before the exam. You can set your schedule to include specific days and times, which can help you stay committed to the plan.

• Consider a course. Taking a CFP test prep course might be helpful if you’re more comfortable learning in an instructional environment, rather than just doing a self-paced study. You’ll typically pay a fee for these courses, but it may be worth it if you’re able to glean new knowledge or study skills as a result.

Practice makes perfect. And the more problem-solving activities you’re able to complete, the more prepared you may be by the time test day rolls around. Again, what’s most important to keep in mind is how you can use the concepts you’re learning practically when working with clients as that’s what the CFP Board is most concerned with.

What to Expect When Taking the CFP Exam

How you prepare for the day of the test depends largely on whether you registered to take the test remotely or in person. If you’re taking the test at a testing center, you’ll need to have a valid, government-issued ID to gain entry.

You’ll also need to offer a fingerprint, take a photo and complete a body scan upon entering the test center. A body scan isn’t required for remote testing, but you will need to provide a video of your test-taking workspace. And you will need to demonstrate you’re not concealing any cheat sheets on your person.

Before the test begins, the test administrator will go over the rules and regulations of the test center. They’ll review your calculator to make sure it’s up to standard and provide you with a whiteboard to use during the exam. Once the preliminaries are over, you’ll be shown to your test seat.

The test is self-paced but it’s important to keep the three-hour time limit in mind as you work through each section. You’ll have a five-minute tutorial to complete beforehand, followed by 180 minutes to complete 85 test questions. There’s a 40-minute break period, followed by the second 180-minute block to complete the remaining questions.

You’ll have a chance to take a brief survey once the test is over to share your feedback. After you complete the CFP exam, you’ll get your results by email, typically within four weeks.

Is Taking the CFP test Worth It?

Taking the CFP test is worth it if you want to pursue a career as a certified financial planner. You won’t be able to do so without first taking the exam.

Working as a certified financial planner can be rewarding if you’re passionate about helping people to reach their financial goals. The CFP test can prepare you for a wide range of situations you might encounter when working with clients. And it can help you to fine-tune your problem-solving skills.

However, you don’t need to obtain a CFP designation if you’re interested in becoming a certified educator in personal finance (CEPF) or a certified credit counselor. While there are educational requirements that need to be met for those designations, they’re not as rigorous as the CFP exam.

The Bottom Line

The CFP test can seem a little daunting and early planning can be critical to your success in achieving a passing grade. Knowing what the test covers, how to study for it and what happens on the test day can help you to approach it calmly and confidently.

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