Avoid 5 Score-Killing Mistakes on the CFP® Exam
CFP® Certificants in the News
Those taking the CFP® Exam consistently lose vital points in 5 key areas:
- Failure to enroll in a review course,
- Lack of a disciplined study plan,
- Failure to answer enough practice questions,
- Failure to know the Code of Ethics and Standards of Conduct, and
- Lack of an exam-taking strategy
We will summarize these challenges, beginning with failure to enroll in a review course
Failure to Enroll in a Review Course
According to Theodore R. Haley, President, Advanced Wealth Management, “Choosing a good review course is crucial, as it will help narrow down the important topics and clarify where you should spend time studying before the test.”
Lack of a Disciplined Study Plan
An effective study plan should be based on your individual knowledge level, rather than a “one size fits all” plan. Your review course provider will have diagnostic exams available to gauge your strengths and weaknesses on key CFP® Exam topics. Based on the diagnostic results, you can develop an individual study plan (check with your review course provider to see if they provide individual study plans).
In keeping with that philosophy, Kathleen T. Kennedy, Managing Director of Boston Private writes:
“… [It] can be so tempting to continuing answering the 'easy' questions again and again because getting them right feels good. It's more important to keep repeating the questions you get wrong... over and over until you get them right every time. I suggest keeping a list of all the questions you get wrong each time you take a practice test. Then go back and do those questions again a week later, then another week later, and so on until you consistently get them right. Make sure to space out the retakes, however; you don't want to get the questions right because you only memorized the right answer, rather than understanding why it's the right answer.”
Failure to Answer Enough Practice Questions
A common misconception is that one only needs to know the technical rules to pass the exam. Nothing could be farther from the truth. Yes, it is important to know the rules but you must APPLY the rules to specific client fact patterns on the exam. Remember that this is a planning-centric exam. The focus is upon your ability to provide appropriate financial advice to clients of different ages, income levels, culture and other demographics.
Ideally, you should answer at least 2,000 practice questions (2,500 is better) over the three months leading up to the exam. Those who pass the exam on the first attempt frequently cite practice questions as a winning strategy.
Failure to Know the Code of Ethics and Practice Standards
A core mission of CFP Board is to make the CFP® mark one of the most trusted and respected financial designations. That commitment is on full display in the Preamble to the Code of Ethics and Standards of Conduct that follows:
“CFP Board’s Code of Ethics and Standards of Conduct reflects the commitment that all CFP® professionals make to high standards of competency and ethics. CFP Board’s Code and Standards benefits and protects the public, provides standards for delivering financial planning, and advances financial planning as a distinct and valuable profession. Compliance with the Code and Standards is a requirement of CFP® certification that is critical to the integrity of the CFP® marks. Violations of the Code and Standards may subject a CFP® professional to discipline.
Bottom line - you simply must know the Code of Ethics and Standards of Conduct and the duty of care required to clients, employers, CFP Board and others.
Lack of an Exam-Taking Strategy
Knowing the technical rules and how to apply them to client fact patterns is vital to your passing the exam. Also vital is a strategic plan to take the exam, which can include the following:
- Time management
- You have 360 minutes to answer 170 questions. Your time budget per question is 2 minutes. That pace will give you 10 minutes at the end of the exam to address any questions you skipped. Give yourself permission to skip the intricate college funding question and come back to it later when you’ve answered the other questions.
- Case study tactics
- There are two schools of thought here. The most popular approach is the case-study-first tactic that calls for your careful reading of the case study and footnotes before answering the questions. A questions-first approach entails starting with the questions and referring back to the case information as needed.
- Guessing strategy
- Virtually no one knows everything that appears on the CFP® Exam. If you are like most mortals, you may have to guess. When guessing, pick a letter and stick to it. For example, if you have to guess 6 times on the exam, it’s likely at least one or more of the correct answers will be choice “C.”
- Cheat sheet
- Memorize key information that is not provided by CFP Board, such as the formula for margin calls, and enter this information on the note-taking screen provided on the exam
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Passing the exam is not a mystery. After identifying your weak areas, invest the time needed to make them strengths. In closing, the author will paraphrase Thomas Edison.
[Success on the CFP® Exam] is 99% perspiration and 1% inspiration.
