What Do You Need to Know to Pass the CFP Board Exam?

Good to Know

The question posed in this article’s title can be answered by applying the timeless wisdom of a Chinese general who died over 2,500 years ago.

“If you know the enemy and know yourself, you need not fear the result of a hundred battles.”

-Sun Szu, 544-496 BC

While the CFP Board exam (the exam) is an opponent rather than an enemy, General Szu’s strategy can be harnessed to help you pass the exam. For example, CFP Board gives you ample opportunities to know your opponent (understand the exam structure), including:

  • A description of the broad categories (domains) of required knowledge,
  • Allocation of questions among the domains, and
  • Learning objectives.

We’ll begin with a discussion of domains.

Domains

A domain can be thought of as a specified body of knowledge. CFP Board organizes the topics you must know into the following eight domains:

Estimated Questions Per Domain

In addition to identifying the domains, you’re also provided an estimated allocation of questions by domain. Currently, the CFP Board exam is a 170-question exam. The published allocations follow in the chart below.

Average Number of Questions
Allocated by Domain1
  Domain Average Allocation % Average Number of Questions
A Professional Conduct 8% 14
B General Principles 15% 26
C Risk Management 11% 19
D Investment Planning 17% 28
E Tax Planning 14% 24
F Retirement Planning 18% 30
G Estate Planning 10% 17
H Psychology 7% 12

Learning Objectives

Knowing the estimated question allocations according to domain is certainly helpful, but the domains are vast bodies of knowledge. For example, must you know that accelerated depreciation taken on movie recordings is not subject to the Alternative Minimum Tax (AMT)? Anecdotally, the answer to that question is no. When studying the AMT for the CFP Board exam, it’s far more important to know:

  • How this tax works,
  • What types of income are generally included in AMT income,
  • What kinds of deductions may be taken against AMT income, and
  • How to reduce a client’s AMT exposure through advance planning.

Learning objectives are published by CFP Board to help examinees focus their studies within the topics of each domain. For example, a brief excerpt from the learning objectives of Domain G, the Psychology of Financial Planning, follows:

Summary

Knowing the topics and learning objectives are huge strategic advantages in your success on the CFP Board exam. However, there’s a fine line between providing sufficient information to understand what you’re likely to be asked vs. overwhelming you with low-probability minutiae such as the obscure AMT exception mentioned earlier. If you’re considering a CFP Certification Program that walks this fine line effectively, look at what Greene Consulting offers here.

1 Refer to Blog II in this series, Using Standard Deviation to Manage Investment Risk, for a refresher on standard deviation and normal distributions.