Is The Cost and Effort to Become a CFP Worth It?

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In January, I announced that I was undertaking the challenge of completing the Certified Financial Planner (CFP®) education and exam. I’ve recently successfully completed both.

Reviewing financial plans with a CFP

Since making the announcement, I’ve been surprised by the number of people who have reached out to ask me what this process entails.

I’ve broken these inquiries down into three categories, those from people:

  1. Looking to create a second career or do volunteer work around their passion for personal finance post financial independence and/or early retirement, 
  2. Trying to better manage their own personal finances and who want to “know what they don’t know,” 
  3. Needing help from a real financial advisor and wanting to know what value CFP® credentials add.

This blog post addresses each of those issues. I am writing it just days after taking my exam while these ideas are fresh in my head.

I will give a behind the scenes look at what you learn and what you don’t on the path to CFP® certification. I’ll also share exactly what this process cost me in dollars and time….

Investing In Becoming a CFP®

Becoming a CFP® is a significant investment of both time and money. As with any investment, you should evaluate it based on what it costs and the return you anticipate.

The process of becoming CFP® certified requires fulfilling the “4 E’s”:

  1. Education: Having a bachelor’s degree (in any discipline, from any accredited college) and completing CFP® specific coursework through an accredited education program.
  2. Exam: Passing a one day, comprehensive, 170 question multiple-choice examination.
  3. Experience: Fulfilling one of two pathways requiring either 4,000 hours of apprenticeship experience that has more stringent criteria or a more lenient but longer 6,000 hours of “professional experience related to the financial planning process.”
  4. Ethics: Meeting ethics standards as established by the CFP® board.

How Much Does It Cost To Become a CFP®?

Financial Costs

The financial costs of obtaining CFP® certification are accrued in meeting the education and exam components. I completed my education and exam prep through Bryant University’s Boston Institute of Finance (BIF). All classes were virtual and online, so there were no required travel expenses.

I completed the ten month Instructor-Led Program and their Premium Exam Prep program. My total expenses for the year were $5,645. The breakdown is as follows:

  • $4,590 (Package including tuition for education, exam-prep, and all materials for both),
  • $75 for recommended Hewlett-Packard 12C financial calculator,
  • $825 CFP exam registration,
  • $5 to submit college transcripts to fulfill education requirement,
  • $150 hotel room close to the testing center (optional but recommended to decrease exam day stress).

This was a very reasonable financial cost for the knowledge gained. I was extremely impressed with the BIF program. The instructors were all knowledgeable in their domains.

The BIF program exceeded my expectations because the instructors were fully invested in each student’s success. I was amazed by the speed and detail with which every one of my questions was answered over the course of the year.

Instructors did not limit questions to those specifically about classes or exam prep. They were willing to get into the weeds about scenarios unlikely to ever get tested on the CFP® exam, sit and talk with me about fulfilling the experience component of getting certified, and offer encouragement and support at points when the process was stressful.

I can’t speak to the cost or quality of other education and exam prep programs. I consider every dollar invested into the BIF programs as money well spent. (Disclosure: I have no financial relationship with BIF other than having been a paying customer.)

Time Costs

The financial costs to fulfill the requirements for CFP® education and examination are reasonable. The time costs are likely not, particularly for the exam prep and meeting the experience requirements, unless you plan to use the CFP® designation.

Education Time Investment

From January until August, I had one two-hour class every other week. In addition to this, I spent on average ten hours per week on independent reading/study for my coursework.

Investing this amount of time was plenty for me to feel prepared for the required exams and to feel that I was retaining important information.

In August, the pace picked up. I completed my Financial Planning Capstone course, which was essentially a series of progressively longer and more detailed case studies. They were designed to test comprehensive knowledge gained over the course of the eight month program.

Exam Prep Time Investment

I completely stepped away from my materials for a week-long end of summer family trip after completing the Capstone course. We returned the weekend before starting the exam review course. I immediately jumped into the readings to prepare for the first class the following Monday.

From that point forward, the time commitment increased substantially. The 10 week review process was intense!

I attended online classes every Monday (2.5 hours) and Thursday (1.5 hours). I also attended most of the weekly pop-up sessions with the instructors (approximately 1 hour each) and participated in a weekly online study group (typically about 1.5 hours each).

In addition to this regularly scheduled 6+ hours each week, I estimate I spent an additional fifteen to twenty hours each week on independent reading, review, and practice questions. After taking the exam, I was grateful for all the effort I invested. I don’t think I could have passed the exam without it.

I consider myself a good test taker. The CFP® exam was the hardest exam I’ve taken. I’ve seen online discussions of attorney/CFPs comparing it to the Bar Exam. I can’t personally validate that.

This exam was far harder than my physical therapist comprehensive licensure, athletic trainer certification, and orthopedic certified specialist exams I took for my original career. None of those were easy. (Of course, I was twenty years younger then.)

Experience Time Investment

The other major time investment if you want to complete the certification process and use the CFP® designation is meeting either the 4,000 or 6,000 hour experience requirement. If you have no industry experience, this would require working the full-time equivalent of two or three years.

I learned that the 6,000 hour pathway can be met in a variety of ways. In my case, I submitted the time spent writing the Choose FI book and my time working on this blog since 2018. Both were approved, placing me well on the way to meeting the 6,000 hour requirement, but not quite there yet.

What Is the Benefit of the CFP® Education and Certification Process?

The answer to this question is dependent on what your goals are for pursuing this knowledge. I would give different answers to someone who wants to actually become and utilize the CFP® designation than to someone simply wanting to obtain the knowledge required to complete the CFP® certification.

The Value of the CFP® Designation for Those Looking to Start an Encore Career

The value of obtaining the CFP® designation for those who want to help others is demonstrating a minimum level of competence and education in all areas of financial planning. This is in contrast to virtually anyone who can hold themselves out as a financial “advisor” or “coach.”

Having a CFP® designation will increase your credibility with at least a segment of the general public. That may translate to a financial benefit.

I want to be clear that when I use the term “minimum level” that I don’t mean to disrespect or detract from the effort spent and knowledge gained pursuing a CFP® designation. As noted above, the process is hard and the breadth of knowledge is considerable.

I’ve spent the past decade studying and writing about DIY investing, wealth building, taxes, and retirement planning. I learned a bit more in each of these areas, to build on my previous knowledge. The primary benefit of my CFP® education was filling the substantial gaps in my knowledge in other areas, allowing me to gain a minimal level of competence where I previously had little to no knowledge.

I do not consider myself an instant expert on topics like incentive or non-qualified stock options or complicated estate planning for ultra-high net worth individuals. I now understand these topics at a higher level, but I would still need to level up or refer people who need help in these or similar areas to someone who is an expert.

The Value of the Information in the CFP® Curriculum for Someone Who Doesn’t Want to Work in the Financial Industry

The return on investment is more questionable for people who don’t actually want to practice as a financial planner. I would separate my advice to people in this area into three subcategories of people who:

  • Are looking for a personal challenge
  • Want to help others who are less fortunate
  • Plan to utilize this knowledge to improve their own finances.

Those Looking For a Personal Challenge

When I started down the path to CFP® certification, I wasn’t sure if I would ever practice as a financial planner, mostly because I didn’t yet have a plan to meet the experience requirement. Still, I felt this was a good investment of my time for several reasons.

First and foremost, as I explained in another blog post, I enjoy learning and taking on big projects. I chose to complete the CFP® education requirement to scratch that itch of taking on a big challenge for myself. There was no definitive plan to take the certification exam or ever practice as a financial planner.

Second, I had zero financial risk because I knew that information I was learning could be material for blog posts, meaning the education would easily pay for itself. The ideas for these recent blog posts grew directly out of CFP® education materials:

The CFP® curriculum can be completed for a reasonable financial cost. If you have a way to recoup those costs or are willing to pay those expenses out of pocket, then completing the CFP® curriculum and exam is reasonably affordable and will absolutely provide a mentally stimulating challenge.

Those Who Want to Help the Less Fortunate

Several people have expressed interest in becoming a CFP® and then starting community, school, or church based programs to help those traditionally underserved. I love this idea in theory. 

My friend from the FIRE community Mark Trautman shared in a guest post on this blog that he is doing this with school and community programs. He obtained CFP® certification after early retirement.

However, I’m not sure the CFP® is the best means to these ends. Most of the information learned in CFP® curriculum and preparation for the exam is not necessary to do this work. 

The vast majority of the population need basic behavioral interventions, methods to increase their income, simple budgeting and debt elimination plans, and hopefully they will progress to being able to implement a simple saving, investing, and tax planning strategy. 

These are not strong points of the CFP® curriculum. Again, the one possible advantage having CFP® certification may provide is increased credibility. That credibility may in turn help in getting funding and support for these types of programs.

Those Who Want to Obtain CFP® Knowledge to Improve Their Own Finances

This was a factor in my decision to pursue at least the education component earlier this year. I had the fear that I don’t know what I don’t know. With the benefit of hindsight, becoming a CFP® is a massively wasteful and expensive means to addressing these fears.

The financial costs to complete the CFP® required curriculum and certification exam are not exhorbinant. Time spent doing so is!

It is important to reiterate that CFP® certification does not make you an expert on any particular topic. You will achieve a minimum level of competence in a wide variety of topics. Most will be irrelevant to you personally.

For example, I assume someone reading this blog would like to be an expert on planning your own retirement. The retirement planning components of my CFP® education and exam prep emphasized topics like understanding the rules that govern qualified defined contribution, defined benefit, 403(b), 457, and IRA based retirement plans. 

This is important information if you are advising or educating a diverse set of people who may have different types of these accounts or who may be responsible for choosing between these account types for their companies. It is an epic waste of time to learn all of these details if you have only one or two accounts as most people do.

You could spend around $100 on the NewRetirement or Pralana retirement calculators affiliated with this blog. Each serve as a masterclass in planning your own retirement, understanding the important variables that impact your outcome, creating reasonable assumptions around each, and learning how they all interact.

You can also choose to spend money to buy the time of an advice only financial planner. They can provide an unbiased outside perspective in a time efficient manner.

Either option provides insights, expertise, and confidence you won’t gain after spending thousands of dollars and hundreds of hours pursuing a CFP® designation.

Any Questions?

Those are the big take home messages at the front of my mind after completing the CFP® curriculum and taking and passing the exam. These ideas grew directly out of questions and conversations with blog readers and reflections on my experience.

If there is anything I omitted that you are curious about, leave me a question in the comments below.

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[Chris Mamula used principles of traditional retirement planning, combined with creative lifestyle design, to retire from a career as a physical therapist at age 41. After poor experiences with the financial industry early in his professional life, he educated himself on investing and tax planning. Now he draws on his experience to write about wealth building, DIY investing, financial planning, early retirement, and lifestyle design at Can I Retire Yet? Chris has been featured on MarketWatch, Morningstar, U.S. News & World Report, and Business Insider. He is also the primary author of the book Choose FI: Your Blueprint to Financial Independence. You can reach him at chris@caniretireyet.com.]

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36 Comments

  1. GREAT article, Chris! You addressed the three separate questions well with honest and insightful comments. This is an area that I have wanted to delve into for a variety of reasons but mostly to challenge myself. Also, one career is nearing an end and this is a topic I am passionate about so maybe that should be my next chapter. Thank you!

    1. Glad you found it helpful Roseanne. If you do go down this path, feel free to send any questions my way if I can help you.

      Cheers!
      Chris

  2. Congratulations, Chris! I likewise considered the possibility of obtaining this certification and for a variety of the reasons you mentioned I decided against it. Reading your post leads me to think I made the right decision for me. Good luck going forward.

  3. Love the write up on CFP application for personal planning. Very insightful on the process and effort required. I am particularly interested in planning for high net worth investors. Did the course work include tax planning scenarios?

    Thanks

    1. Ron,

      Yes, there was a disproportionate amount of time to planning for the needs of high net worth individuals. This includes extensive attention paid to gifting strategies and the use of a variety of trusts to accomplish goals of controlling assets and directing where they will ultimately go while minimizing estate taxes. There was also in depth education about non-qualified retirement plans, ISO and NQSO mechanics and planning strategies, and planning strategies for those subject to AMT and net investment income tax.

      To contrast this to my point about helping the less fortunate, there was little emphasis on budgeting, emergency fund planning was boiled down to the 3-6 months of spending rule common in personal finance circles, and a simple low-cost tax-efficient index investing strategy got the same or less attention in the investment section as complex options strategies, hedging strategies, etc.

      So if your goal is to serve high net worth investors, then you will learn a lot.

      Chris

    1. I have not looked into it in detail YET, but I am aware of it and the faculty behind it is impressive. Stay tuned!

      Chris

  4. Thanks for the useful article. I’ve always wondered about this. Do you know of any useful Canadian Retirement Calculators?

    1. Susan,

      I do not. The big advantage of the NewRetirement and Pralana calculators that we affiliate with over some others is the detailed federal and state tax analysis and calculations provided. I am not aware of any similar functionality with Canadian specific calculators.

      Sorry!
      Chris

  5. Thank you for this very thoughtful article. You answered many of the questions that I had. And you confirmed that getting more financial education primarily to help me with my own finances, going through the CFP route is probably not the best use of my time. Thanks again!

  6. Congratulations on completing the course material and exam. Was there any data on what percentage of potential client pool were high net worth individuals? I’ve always thought they were the only segment, and a very small one at that, of the population that required any expertise. For the very vast majority, it’s meat and potatoes basics that are can be easily and inexpensively be applied with success determined by discipline to one’s plan. That expensive planners sell themselves to this group as valuable and needed advisors is shameful.

    1. Scott,

      Traditionally, reimbursement has driven who clients are. Those who serve lower net worth individuals tend to rely on commission based sales. Those who serve higher net worth individuals would tend to charge an assets under management (AUM) arrangement. For this to make sense, you tend to need a larger asset base from which to generate fees, so there tend to be minimum net worth to be a client. In both models, the fees lack transparency, and most people have little idea what they are paying. This works well for advisors. For clients, not so much as it creates a major drag on wealth over time.

      Where I hope to see this industry going is to advice only, meaning a potential client has to pull out their credit card or check book and play a transparent fee for advice. If the client perceives value, they will pay for it and tell others. If they don’t, they won’t.

      This model is not without conflicts, the most notable being the temptation to make things more complex than necessary. But I do believe it is the best model for consumers. See: Conflicts of Interest with Investment Advice.

      I used to think, like you, that the vast majority of people could be DIYers and don’t need any outside advice or planning. After helping out my parents and talking with many readers of this blog, I think many people would benefit from advice for a variety of reasons. Among them are the complexity of our financial system and seeing how the pieces all fit together. Another is behavioral. Some people are natural savers, others are natural spenders. But to build wealth AND be able to enjoy the fruits of your labor requires switching between them at different points. This isn’t easy for many people.

      So I would agree that the way some advisors sell themselves is dishonest, and maybe even shameful as you describe. But there is value to be added depending on the circumstances.

      Best,
      Chris

      1. Chris,
        I agree in hoping the industry evolves into a fee for the time involved providing valued advice model. I also agree that there are a lot of DIY’ers that could use some advice and behavioral monitoring. However, they should be billed for the relatively little amount of time that requires. There is just too much money being made by advisors with the current system for our hope of change to happen any time soon. I worked in the industry for a few years (not as an advisor) and the only thing the firm focused on for advisors was their “production” – meaning how much money they generated for the firm. I’ve thought of entering the field myself but commissions and assets under management fees as the compensation structure is something I could never feel good about. Good luck to you in whatever path you take.

        1. I’m with you 100% here Scott. My goal/plan is to start offering advice only on a very limited basis. I’ve been told by a number of people that the demand is overwhelming for this type of service, which is encouraging that consumers are getting the message and seeing the value in this.

          However, this is much more work to add value to customers and get them to pay you in a transparent way than to charge fees in an opaque (being generous here) way. It also doesn’t scale well. So I am not expecting to see AUM or commission models going anywhere.

          Best,
          Chris

  7. What an achievement. Thanks for sharing your story and thoughts. It has been fun following your journey and learning from you (specifically this pasy year). Very basic question. How many hours is the final exam? Break for lunch?

    1. Thanks Andrea. The test is two sections. You have up to 3 hours for each half with a 40 minute break in the middle.

  8. Congratulations!!! I had complete faith in you, Chris, and knew you could (and would!) be successful. The fact that your exam is in the rear-view mirror will allow you to relax and enjoy the holidays with your family – perfect timing.

    This was an intriguing read. I appreciate the fact that the requirements for the program are stringent, the exam is difficult and ethics are stressed. Certainly, there are situations in which a client’s entire financial future may be held in the hands of a CFP, much like the life of a patient in a doctor’s. It’s a staggering responsibility. Thanks for your honest and transparent evaluation of the certification process. It was both informative and reassuring.

    1. Thanks for the kind words and support Mary.

      I will say that while I agree with you on the responsibility involved in working with someone’s finances, I’m not reassured by the ethics requirements and fiduciary standard.

      On one hand, fiduciary duties are jammed down your throat in the CFP curriculum. On the other, you are taught that you can be a commissions based salesman and practice as a CFP under the fiduciary standard, as long as that method of compensation is disclosed and you act in the client’s best interest.

      I’m sure it is possible to choose your client’s interests over your own, but how often that actually happens when you are only paid if you sell a product that may not be in the client’s best interest…. I’m a skeptic. And I am not implying that only the commissions based model is conflicted. All financial advice comes with conflicts of interest. I’ll continue to write about and highlight this and do my part to move this industry in a better direction.

      Best,
      Chris

      1. With all due respect to honest, hard-working CFPs everywhere, it is my skepticism and cynicism (which I carefully tamped down in my original comment) that led me to continue managing our investments after our portfolio reached a point where it would have been attractive to a professional. My concerns are also responsible for the instructions on how to hire a fee-based planner that are tucked in with the copies of our wills accessible to our son.

        1. I agree with your approach for yourself and for your son. The one big challenge of being a DIYer, even if you are competent to do things completely on your own, is that none of us is getting younger and at some point most of us will likely need someone to help us. I like your approach of thinking about this proactively for your son, and doing that research for him may also help you should you ever need help for yourself.

          Best,
          Chris

        2. Mary, one route to consider. You do not have to have ALL your assets handled by an advisor. I have certainly learned from financial advisors over my lifetime, but at times I was definitely paying too much in fees for the advice received. I currently have part of my portfolio with Personal Capital, but most of it I handle myself, TSP being a large chunk. I have enjoyed challenging the Personal Capital advisor with some specific situations. Just another option.

  9. Great takeaways Chris!
    30 years ago I looked into taking the CFP course (then around $3K) to bolster my financial knowledge as I was not in the field, nor was I planning to enter the field as a profession. So what I did instead was borrow the course materials from a friend and studied them on my own. You’re correct to say that you don’t become an expert in any one area, but it does give you an excellent broad perspective. I was 30 years old at the time and starting to command a respectable salary. The more material you read about investing, the more you realize that the time value of money is key. I made a commitment to save 30-50% of my salary and live on what was left. I couldn’t keep up that level of investing due to the marriage and 4 kids that came along, but I have been financially secure for many years now thanks at least in part due to the CFP research I did a long time ago.

  10. Very cool, I know a lot of people are interested in this but do not know where to start. I toyed with it when I first retired but ultimately decided I was already kind of swamped with volunteer work, and I have no need nor desire to earn any more money, so I passed on it. But I bet some of your readers will be inspired to follow your lead.

    1. Steveark,

      Like you, many people “toy with” this idea. I’ve been surprised by how many questions I have gotten about it. Hopefully this will be a good resource to point them to.

      I also hope to inspire others who are, or are near, FI to follow me down this road. The financial advice business has a lot of inherent conflicts of interest. Having wealth does not eliminate greed or bad actors who will always want more (see the current FTX blow up), but it does put people in position to at least be able to act in a client’s best interest which is frankly difficult if the decision requires sacrificing putting food on your own family’s table and you rely on that income to do so.

      Best,
      Chris

      1. Bill,

        I agree with your insights fully. I love the idea that people should be fiduciaries and appreciate that the CFP board emphasizes this. But in reality, I don’t think you can regulate ethics and I absolutely don’t think you should ever blindly trust anyone with your money.

        Thanks for taking the time to read and share your thoughts.

        Best,
        Chris

  11. Hi Chris…

    Congratulations on your efforts and hard work! Two questions:

    1) In your studying during the instructor led part (prior to the dedicated exam prep), among online lessons, video lessons, and the ME books and quizzes, what parts would you say are best to focus on and would you characterize the sheer amount of reading in the ME books as paramount.

    2) Any strategies you employed during the instructor led part (or dedicated exam prep) that helped in terms of retaining the sheer amount of information over time?

    Thanks.

    1. Will,

      I’m not 100% sure I understand your first question. But I’ll give it a crack.

      1.) As far as what to focus on, I looked at things as to why I am learning about them. Some things are simply things you have to learn in order to pass a test, be it to get through the education portion or to pass the CFP exam. Other things are critical to serve the niche of people I want to serve, namely those trying to answer the “Can I Retire Yet?” question, be they traditional retirees or FIRE types looking to make a drastic life change. Those topics related to that niche I would try to understand at a deeper level. One way I did so was by writing about them. You can see the list of articles I cited above as examples. I have about a dozen more partially written posts which I’ll be posting in the coming months. Due to the volume of info that I was taking in, I didn’t get a chance to edit and polish those to the quality I would be happy publishing yet, but just the process of starting and doing a brain dump and then seeing how the information fit together helped. I think teaching is a great way to learn as it forces you to understand information at a deeper level in order to be able to teach it to others.

      2.) Variety. The BIF program was a good combination of written materials, classroom sessions, and question banks to mix things up. I also participated in a study group. We all brought different perspectives including my FIRE perspective, someone who worked for an investment management firm, and a widow getting back into the work force. Therefore we all had different experiences, perspectives, and areas of strength and weakness. It was helpful to have people who could share their expertise, and again sharing mine in other areas only further strengthened it by explaining and teaching to others.

      Hope that helps.

      Best,
      Chris