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CFP Test
The Certified Financial Planner (CFP) certification examination has been created to evaluate the skills candidates have with using their knowledge in financial planning with everyday circumstances. It is taken in pursuit of certification. When candidates are successful on the test, it demonstrates that they have enough expertise to work in this field. Candidates must meet specific academic, work and ethics guidelines before being certified. The academic work must be complete before taking the test.
Although the test is continually updated, new laws or alterations in laws will not appear on examinations until a minimum of six months has gone by from the time the change went into effect. Every item on the criterion-referenced test is in multiple-choice format. The two kinds of questions are as follows:
- Concise information or a situation is given, and then the candidate must answer the question based on the data provided. These are valued at two points per item.
- Lengthier information or a longer scenario is provided, and then the candidate completes 10-20 pertinent items. These are valued at three points per item. For each item, candidates will need to put their knowledge, understanding, scrutiny and ability to put things together, and assessment skills into action. Candidates will be required to demonstrate an ability to think critically and solve problems.
The content of the test is broken down as follows:
- General principles of financial planning - 11%
- Insurance planning and risk management - 14%
- Employee benefits planning - 8%
- Investment planning - 19%
- Income tax planning - 14%
- Retirement planning - 19%
- Estate planning - 15%
Candidates will need to bring at least one (or more, if needed) battery-operated, hand-held financial function calculator to the exam. This tool needs to have an internal rate of return (IRR) function so that unequal periodic cash flows can be calculated. The calculator cannot have alphabetic keyboards or any ability to print out information. All information has to be cleared out of the calculator's memory before the testing session starts. Candidates cannot use any programming on the calculator while the exam is in process.
Since the score depends on the number of items answered correctly, it is better to try to answer every question rather than leaving one blank. The outcome will be either pass or fail based on a scaled score, which is found with a modified Angoff technique.
As your test day approaches, make sure that you have had plenty of time to study. Review a CFP test study guide or study using CFP test flashcards so that you strengthen any areas that might be more difficult for you on the test. You'll have the rest of your life to enjoy being successful on the exam, but you can only spend time between now and your test day to get prepared. Study hard and maximize your chances of success.
