Examworthyexamworthy.comCertified Financial Planner (CFP) Examination cheat sheet
CFP Board
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At a glance
Format: Computer-based, 170 multiple-choice questions in two 3-hour sections (each split into two subsections); stand-alone items plus item sets linked to case studies; criterion-referenced pass or fail
Domain weight map
Heaviest first - spend your time hereHow this exam thinks
The CFP exam scores planning judgement applied to a described client, not recall of rules you could look up.
Spot the trap
Tempting wrong answers, and why they failCommon misconception
Failing the contribution clock does not make converted principal taxable. That principal was already taxed in the year of conversion, so recovering it can never produce a second income inclusion under either clock.
Retirement Savings and Income Planning
Common misconception
Matching final maturity to the goal date is not the same as immunising it. It fixes the redemption date, but coupons received before then must still be reinvested at unknown rates, so the accumulated sum stays exposed to a fall in rates.
Investment Planning
Common misconception
Following reasonable client directions is genuinely a fiduciary duty, but it covers lawful directions about the client's affairs. It does not authorise skipping the analytical steps the Practice Standards require.
General Principles of Financial Planning
Common misconception
A private letter ruling is genuine written guidance and it does bind the Service, but that binding effect runs only to the taxpayer who requested the ruling and only on the facts submitted.
Tax Planning
Common misconception
Low frequency on its own does not justify retention. Retention also needs severity low enough for the client to absorb, and a 900,000 dollar loss against a 60,000 dollar reserve would be ruinous.
Risk Management and Insurance Planning
Common misconception
A general power reaching every financial matter still ends at incapacity. Breadth of subject matter and survival of incapacity are different questions, and the document has to say that the authority endures.
Estate Planning
Common misconception
Insurance sales outside a planning engagement are often regulated on a suitability basis by state insurance law, but CFP Board sets its own higher bar for a CFP professional, and that bar does not drop to suitability for a narrow engagement.
Professional Conduct and Regulation
Common misconception
That good data changes behaviour. A belief formed in childhood is not dislodged by a probability figure, and a client told her caution is irrational usually defends it harder rather than spending more.
Psychology of Financial Planning
Key terms
Exam-day rules
- Read the final sentence of the item before the fact pattern. It tells you what is being asked, so you can mine the client's details for the two or three facts that decide it instead of absorbing all of them.
- Re-read the case facts for every item in a set. Item sets share a client, and a later question often turns on a detail that was irrelevant to the one before it.
- Use the provided tax tables rather than memory. The figures are given to you, so the marks are for knowing which figure applies and where it sits in the calculation.
- Check begin mode against end mode before every time value of money answer. Wording such as at the beginning of each year or the first withdrawal today is the switch, and the wrong-mode result is always one of the options.
- Prefer the answer that follows process. When two options both work, the one that gathers a missing fact, confirms the goal or discloses a conflict beats the one that implements immediately.
Revision schedule
- Week 1Map the domains and book the window
- Weeks 2-3Get the calculator and the fundamentals automatic
- Weeks 4-8Take the heavyweight domains in depth
- Weeks 9-11Cover insurance, estate, conduct and psychology
- Weeks 12-13Practise integration on case studies