Choosing The ‘Best’ Path To Meet The Experience Requirement For CFP Certification

Choosing The ‘Best’ Path To Meet The Experience Requirement For CFP Certification

Many aspiring and current financial advisors pursue the Certified Financial Planner (CFP) certification for its career-enhancing benefits and the credibility it provides to prospects and clients. Because the CFP mark demonstrates to consumers that an advisor has a baseline of competence and ethical behavior, obtaining CFP certification entails a rigorous process to help ensure that only qualified individuals can hold themselves out as CFP professionals. In addition to Education, Exam, and Ethics requirements, aspiring CFP professionals must also complete an Experience requirement, which helps prepare them to provide personal financial planning services to clients. This requirement can be fulfilled using 1 of 2 pathways: the 6,000-hour Standard Pathway or the 4,000-hour Apprenticeship Pathway.

The more flexible option for candidates to complete the Experience requirement is the Standard Pathway, which involves a 2-part requirement: 1) the candidate’s experience must fall within 1 or more of the 7 primary elements of the personal financial planning process. and 2) it must involve at least 1 or more of 5 specified types of experience (e.g., personal delivery to individual clients or direct or indirect support of individual clients).

While it takes fewer hours to complete, the Apprenticeship Pathway has much more stringent experience requirements: qualifying experience must include all 7 of the elements of the personal financial planning process, all the hours must be delivered by personally engaging with individual clients, and all hours must be completed under the direct supervision of a CFP professional who will verify and attest to the candidate’s experience.

Given that aspiring CFP professionals come from varied backgrounds, there are a wide range of opportunities available for candidates to fulfill the Experience requirement (particularly using the Standard Pathway). For example, those with previous experience related to financial planning can report this experience if it was gained within 10 years prior to passing the CFP exam. For those without enough previous experience to fulfill the requirement, working in a full-time position (whether at an established firm or by starting one’s own firm) is the fastest way to complete sufficient hours for the requirement. And those who are unable to commit to a full-time position can seek out other opportunities, such as a part-time (virtual) paraplanner position or pro bono planning, that can not only expose the aspiring planner to a range of experiences, but also give them a head start on experience hours if they decide later to move into a full-time position.

Ultimately, the key point is that there are many ways to fulfill the Experience requirement for CFP certification and the best way to do so will depend on a given individual’s previous experience, career aspirations, and current employment status. By creating a plan that not only fulfills the requirement, but also develops the range of skills needed to be a successful planner, an aspiring CFP professional can start their career on a more solid footing and develop the needed skills to better serve their future clients!

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