By |Published On: September 12th, 2023|Categories: Women in Finance Know Stuff, Guest Posts, Other Insights, Investor Education|

For many financial professionals, the Certified Financial Planner (CFP) exam can be a stressful and intimidating experience. Even though the test covers an extensive amount of information, there are many levers you can adjust throughout the process to make it more approachable and to keep yourself on pace for success. Let’s talk about the right approach(es) and the proper study techniques you need to pass the CFPexam with confidence and get the certification you need to advance your career in finance and investing.

Understanding the Format and Content of the CFP Exam

In this first blog post (of many!), we’re going to discuss the format and content of the CFPexam.

The CFPexam is designed to assess your knowledge and skills in various areas of financial planning, including financial analysis, retirement planning, investment management, tax planning, and estate planning.

The exam consists of 170 multiple-choice questions, with some scenarios that require you to apply your knowledge to real-world situations.

To succeed on the CFPexam, you should be familiar with key financial planning concepts, rules, regulations, and best practices. This includes understanding different types of investment products, tax strategies, risk management techniques, and the ethical considerations involved in providing financial advice.

According to the CFP website, the test covers the following “Principle Knowledge Domains & Topics”:

With 170 questions total, this means you can expect AT LEAST:

  • 14 questions on Professional Conduct & Regulation
  • 26 questions on General Principles of Financial Planning
  • 19 questions on Risk Management & Insurance Planning
  • 29 questions on Investment Planning
  • 24 questions on Tax Planning
  • 31 questions on Retirement Savings & Income Planning
  • 17 questions on Estate Planning
  • 12 questions on Psychology of Financial Planning / Behavior Finance

“What do you mean, ‘at least’?”

“And wait, Jess…your math is wrong because that adds up to [🤔] 172 total questions, but the exam is only 170.”

If this is your thought process, then I’m so glad we’re talking. Because several months ago, I was in your shoes, my friend.

My math isn’t wrong, and here’s something that will help you mentally prepare for this exam: many test questions cover multiple layers of principle knowledge topics. So, you’ll need to read questions slowly and carefully enough to catch those nuances. Since it’s not ethical to give away copyrighted/protected test questions, let’s take a look at this example that Dalton Education published via Twitter:

This looks like a simple “general principles” math question, right? But wait…they threw in a comment about taxes, too. So do you need to calculate taxes and then the ratio? Or ratio and then taxes? Or just the ratio? Before you can even get to solving, you must get the order and answer to those questions correct.

We’ll talk more about this in another blog post, but one of the problems with a question like this is that when people get deep into test-taking mode, their brains start to fatigue and many times they start to second-guess themselves and overthink the solutions to problems. So, while this may look like a pretty friendly, straightforward question right now, are you prepared for how it is going to feel after you’re 30 questions deep and you’ve solved for taxes on five other questions? How about after you’re 120 questions deep and have started second-guessing the planning ratios you memorized?

Another layer of confusion with a question like this, which can easily be solved by repetitive practice, is figuring out what the question-asker is looking for.

Don’t be fooled – EVERY. SINGLE. QUESTION on the exam is, to some degree, subjective. The question-asker has an agenda for what they want you to know and for how long they expect it to take for you to know that thing. Even if the solution requires nothing but straightforward math, they still subjectively target the amount of time you’re expected to come up with the calculated answer, which factors into how much time you’ll be able to spread out over the rest of the exam.

Practicing questions like this over and over again until you learn to think like the question-asker is going to be one of the greatest tools you can possibly have in your possession for this exam.

Another formatting concern that I didn’t see posted about much was the question types you’ll see on the exam.

Some good news – I was pleasantly surprised by the straightforwardness of most of the test questions. I’d say 80-85% fell into the “Stand-alone” category. At least half of these were one-layer questions that tested only one primary principle knowledge topic and were quickly reducible to two possible answers. From a statistical standpoint, that means ~40% of the test is a straightforward 50/50 shot. If you go into the test well-prepared, those questions should provide you with a solid buffer to then be able to focus in on the more challenging questions without running out of time or energy. (I know 40% isn’t going to get you a passing grade on the overall exam, but hopefully, it’s helpful to anticipate that not EVERY question will be designed to trip you up).

The “Short Scenario” questions were just that short and accompanied by 2-4 related multiple-choice questions. In my test experience, these questions REALLY honed in on overlapping principle knowledge topics, like estate planning + taxes or estate planning + investments. Therefore, these got tricky fast. I used a strategy called “mark & move” (more on that later) when the short scenario questions seemed trippy.

Ok, real talk. For me, the “Case Study” questions were fatiguing straight up EXHAUSTING.

“But this is the most like real life planning, Jess!”

You’re correct about the material. But in real life, no one will have a 3-hour timer ticking down in the top right corner of my screen while I dig through planning documents. No one will withhold my coffee from me while I go line by line through a cash flow statement. No one will be squeezing my brain with too-tight headphones while I consider the effect of different estate planning strategies. And I can phone a friend (and the internet) as often as possible. So yeah, it’s different, lol.

If you’re a little (or a lot) ADHD, buckle up with a good test-taking strategy for these case study questions. My suggestion is to practice the case studies you’re given a couple of different ways:

  1. Try it the traditional way. Read through the case study in total and make notes as you go (FYI, you’ll be able to highlight and mark up the case study on the CFP exam, which is helpful to know if your exam prep software doesn’t allow that). Then go through the questions one by one and refer back as needed to your notes and the text. TIME YOURSELF FROM THE START OF READING TO THE END OF THE LAST QUESTION. You still need to average out to 2.5 minutes per question to stay on target for the total exam. Can you read through, take notes, and answer questions in this time frame? I could not, so I decided to…
  2. Go backwards. I skipped the case study reading and went straight for the questions. One by one, I would read through the question for the info needed, then go back to the case study to hunt for that info specifically. I’d grab the details, jot them down, then skip back to the question. (The screen formatting of the exam makes this somewhat of a friendly approach because you can set up the questions and the case study as side-by-side screens on the exam computer. However, I could not set it up this way when studying.) After practicing both ways, this seemed to get me higher accuracy on the answers and also fatigued my brain a bit less, so this was the strategy I used on the exam.
  3. Some combo of the above. You could try skimming the case study for 1-2 minutes, and then skipping to the questions.

As you can see, the approach you will want to take will be the one that works best for you. The only way to know which approach works best for you is to make sure you practice case studies before the actual exam. I’d say this is where you want to make sure that the exam prep provides you with enough support to feel confident going into case studies on exam day. I used Dalton Education and (**in retrospect) felt more than adequately prepared for my case study question strategy on exam day. (**No one that I’ve talked to felt “more than adequately prepared” going INTO the exam 😅)

Finally, let’s talk time frames for the exam – expectations vs. reality.

Expectation: 6-hour exam with a 40-min lunch break

Reality: I got to the test center at 7:15am and was starting my exam by 7:45. I got back to my car around 2:35 that afternoon (though it felt like I’d time traveled to a new dimension at that point). If you do the math…that means I used almost every second available to me. So yes, count on being at the test center for 7-7.5 hours. (And arrive 30 mins early).

What I got right: Arrived early. Had no expectations to finish early. Did two practice exams in the weeks leading up to the exam so that I could anticipate the feeling of sitting and testing all day long.

What I could’ve improved on: More quality sleep the night before. I aimed for it, but it just didn’t happen.

Bottom line: Anticipate a long day. This is just part of the test experience.

Expectation: 3 hours each for Section 1 & Section 2. 85 questions per section. Optional unscheduled break after question 43 of the first subsection.

Reality: “Unscheduled break” = you can get up, but time keeps ticking. This idea stressed me out, so I knew I’d be parked for 3 hours without an emergency. I *did* pause for deep breaths and long stretches throughout the exam, and highly recommend that to anyone who holds their breath in tense situations.

Here’s an IMPORTANT detail about the sections: After you agree to move on beyond the first 43 questions, you DO NOT get to go back to those questions to review them at the end of the 3-hour block. So, when you get to that first unscheduled break, check your first 43 questions and finalize all answers before you move on. Since you still have 42 more questions to complete within that time block, I suggest ensuring you get through that first part in 90 minutes or less.

I was able to stick with this timeline fairly easily, though, as I mentioned above, I did use almost all of the time given. I had enough time at the end of each block to go back and review the questions I had flagged.

Also, some people that I talked with after the exam said they felt that the second block of questions were easier than the first block of questions. Good for them! Ha. I don’t recall feeling this way, but much of that perception is subjective to what content areas each person feels most comfortable with, and the amount of fatigue experienced throughout the exam. It’s something to be hopeful about for sure, but not something I’d count on.

What I got right: “Mark & Move” strategy. Yes I keep talking about this without going into more detail. No I won’t leave you hanging forever. It’s a good strategy and you’re going to be glad you knew about it!

What I could’ve improved on: I expected some sections to be easier than others. Unfortunately, that was not reality for me and there were a few moments where I had to pause, close my eyes, take some deep breaths, and remind myself that I had put in the work to prepare for this exam.

Bottom line: Confidence is KEY to getting through this exam alive. As you practice, stay on top of your mental game and self-talk. Practice long question-taking sessions to stay engaged – being a good test-taker is just as important as knowing the information.

Expectation: 40 min lunch break is a long time – I’ll probably take a quick bathroom break, stretch my legs, and then get back after it so I can finish earlier

Reality: 40 minutes flew by at the speed of light, and the clock was down to 10 seconds when I returned to my seat!

What I got right: Packed a light lunch, some caffeine, and took a walk during the 40 min break.

What I could’ve improved on: Didn’t bring a non-smart watch, so I couldn’t check time while I was on my walk, and almost showed back up late for Section 2. (While nothing horrible would’ve happened if I had been a little late, it still felt a little stressful to be sitting down as the timer counted down from :08, and definitely wasn’t my intention to cut it that close)

Bottom line: Eating light, caffeinating up, and moving your body is SO helpful. Don’t waste your break by driving to get food, and don’t skip the opportunity to clear your head a bit!

By taking the time to understand the format and content of the CFP exam, you can better tailor your study plan. Next, we’ll cover study planning tips and strategies to ensure you are adequately prepared and break down some of the more popular test prep resources. Stay tuned!

About the Author: Jess Bost

Jess Bost
Jess Bost is the VP of Strategic Partnerships and Client Success at Alpha Architect. She is driven to create a win-win partnership culture for financial advisors in which they can grow efficient practices to scale and build relationship-focused client service models. Her respect for overall portfolio alpha derived through comprehensive financial planning serves as catalyst for her passion to help RIAs identify opportunistic areas in which they can deliver value for their investors. Her background in CrossFit, Olympic Weightlifting, and Nutrition coaching provides a framework for teaching and supporting the long-term effects of a methodical, evidence-based, disciplined approach. Jess has a Bachelor of Science in Psychology from Berry College, holds a CrossFit-L1 certification, and has Series 7, 65 & 63 licenses. She is a Retirement Income Certified Professional(RICP®) and holds the Certified Financial Planner (CFP®) designation. Currently residing in Augusta, GA, Jess and her husband are raising two strong little ladies. When she’s not out looking for adventures and opportunities to make memories with her people, you’ll most likely find her in the gym lifting something heavy.