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

Achieving the Certified Financial Planner (CFP) certification is a goal of many aspiring (and current) financial advisors. The designation has both tangible benefits, including earning more income and bringing in more revenue for their firms compared to other advisors, and intangible benefits, including enhanced credibility, self-confidence with clients, and technical expertise.

The CFP mark also demonstrates to consumers that the advisor they are (considering) working with has a baseline of competence and ethical behavior. Because of this, obtaining CFP certification entails a rigorous process to help ensure that only qualified individuals can hold themselves out as CFP professionals. This process requires aspiring CFP professionals to complete 4 requirements (known as the “Four E’s”): Education, Exam, Experience, and Ethics.

The Education requirement entails completing both coursework on financial planning through a CFP Board-Registered Program (or to complete the Accelerated Path available to candidates with other professional designations) and a bachelor’s degree or higher (in any discipline) from an accredited college or university. Once this requirement is met, candidates are eligible to sit for the CFP Exam, a rigorous 170-question, multiple-choice test.

In addition to the Education and Exam requirements, candidates pursuing the CFP mark must also complete the Experience requirement, which helps prepare them to provide personal financial planning services to clients. And like the Education and Exam requirements, there are multiple pathways candidates can take to fulfill the Experience requirement.

What Is The Experience Requirement For CFP Certification?

While CFP Board’s Education and Exam requirements are meant to ensure that CFP professionals have the technical knowledge necessary to be competent financial advisors, meeting the Experience requirement helps aspiring advisors build confidence in their abilities and provides consumers with a measure of confidence that a given CFP professional has real-world experience dealing with a range of financial planning issues.

To fulfill the requirement, aspiring CFP professionals can choose 1 of 2 pathways: the 6,000-hour Standard Pathway or the 4,000-hour Apprenticeship Pathway.

The 6,000-Hour Standard Pathway

The more flexible (but potentially more time-consuming) option for candidates to complete the Experience requirement is the Standard Pathway, which requires candidates to gain a total of 6,000 hours of experience (based on a 40-hour workweek) that satisfies a 2-part requirement.

The first part of the requirement can be met if the candidate's experience is gained through 1 or more of 5 different ways:

• Personally engaging with individual clients;
• Supporting the financial planner and/or financial planning process (directly or indirectly);
• Supervising financial planners and/or the financial planning process;
• Completing an internship or the Financial Planning Association (FPA) residency program; or
• Teaching college-level courses in financial planning concepts.

In addition, their experience must fall within 1 or more of the 7 primary elements of the process of Financial Planning:

1. Understanding the client’s personal and financial circumstances;
2. Identifying and selecting goals;
3. Analyzing the client’s current course of action and potential alternative course(s) of action;
4. Developing, the financial planning recommendation(s);
5. Presenting the financial planning recommendation(s);
6. Implementing the financial planning recommendation(s); and
7. Monitoring progress and updating.

Given that a candidate’s experience is only required to involve (at least) 1 of the elements of the financial planning process through 1 (or more) of the 5 different activities, there is significant flexibility in fulfilling the requirement.

For example, an individual who works as a paraplanner at a financial planning firm is very likely to gain experience in several (but not necessarily all) of the elements of the financial planning process, and can fulfill the second part of the requirement by their direct support of the firm’s financial planner(s).

It’s important to note that a full-time job at a financial planning firm is not necessary to complete the Experience requirement outlined in the Standard Pathway; for example, an individual who serves as a pro bono financial planner can accrue experience hours, as doing so can involve several of the parts of the financial planning process (fulfilling the first requirement) and personally engaging with individual clients (fulfilling the second requirement). That being said, gaining experience hours through a full-time job is likely to be the fastest way to complete the requirement (as CFP Board will only accept up to 40 hours of experience per week)!

The 4,000-Hour Apprenticeship Pathway

While it takes fewer hours to complete, the 4,000-Hour Apprenticeship Pathway has much more stringent experience requirements than the Standard Pathway. Aspiring CFP professionals considering the Apprenticeship Pathway must fulfill 3 requirements:

1. The job activities must include all 7 elements of the personal financial planning process (listed above);
2. All hours must be delivered by personally engaging with individual clients; and
3. All 4,000 hours must be completed under the direct supervision of a CFP professional, who will verify and attest to the candidate’s experience.

These strict requirements limit the types of experience that will count toward the Apprenticeship Pathway, which generally requires significant responsibility as the candidate must work directly with clients in all elements of the financial planning process.

For example, a position at a financial planning firm where the candidate helps with client onboarding and develops financial plans – but does not deliver plans to the client – would likely count for the Standard Pathway but not for the Apprenticeship Pathway.

It is also worth noting that experience hours earned in a position that qualifies for the Apprenticeship Pathway can count toward the Standard Pathway (which could be useful for those who leave a position providing experience required by the Apprenticeship Pathway before completing the requisite 4,000 hours), but not the other way around. In other words, an individual with 1,000 hours of prior experience in a position that qualifies for the Standard Pathway would still need to complete 4,000 hours in a position that qualifies for the Apprenticeship Pathway.

How And When Experience For CFP Certification Is Reported

Candidates for CFP certification can add their current and previous experience at any time through their CFP Board account portal. In fact, it can be beneficial for candidates to upload any previous experience to their account dashboard to determine how many remaining hours they potentially need in order to fulfill either the Standard or Apprenticeship Pathways. Candidates can also add their current position(s) to the dashboard, which would allow them to track their hours over time as they work to fulfill the requirement.

Once the candidate completes enough hours to fulfill the Experience requirement and updates their information on their dashboard, CFP Board will verify all hours submitted for the Apprenticeship Pathway, as well as all hours for the Standard Pathway that involved indirect support, self-employment, or pro bono experience. Other experience hours for the Standard Pathway may be randomly selected for review.

As part of the verification, CFP Board will request that the supervisor or qualified attestor (identified by the candidate in their experience entry) verify the position, start date, end date (if applicable), hours worked per week, and the elements of the financial planning process involved in the position.

Those with experience through an employer can likely provide their employer’s name to attest to their hours and responsibilities. But for those who are self-employed, have pro bono hours, or have other experience where they do not have a direct manager, a “Qualified Attester” can be used to verify the experience. This individual must hold one (or more) of a range of certifications or licenses, including:

• Certified Financial Planner (CFP)
• Certified Public Accountant (CPA)
• Chartered Financial Analyst (CFA)
• Chartered Financial Consultant (ChFC)
• Chartered Life Underwriter (CLU)
• Licensed Attorney
• Doctor of Business Administration
• D. in Financial Planning, Finance, Business Administration, or Economics
• CFP certification from outside the US, from the Financial Planning Standards Board Ltd. (FPSB) Affiliate located in the candidate’s territory of residence

Notably, while the Education and Exam requirements for CFP certification have to be completed sequentially (the Education requirement is a prerequisite to sit for the exam), the timing of the Experience requirement is more flexible; CFP Board accepts experience that is completed within 10 years before and 5 years after successful completion of the CFP exam.

Those with experience completed more than 10 years before passing the exam can file a Policy Exception Request to ask that their experience count toward the requirement (though CFP Board notes on the exception request form that exceptions to requirements are rarely granted). And for those who pass the exam but have not been able to fulfill the Experience requirement within 5 years can apply for a 3-year extension using the same exception form (which is also subject to review by CFP Board).

The key point is that CFP Board makes it easy to track how many potential experience hours a candidate has accrued, so candidates can benefit by uploading previous and current experience to their CFP Board accounts. Of course, this leads to the question of what kinds of positions might count toward the Experience requirement, and how candidates with different circumstances can gain sufficient experience.

How Candidates For CFP Certification Can Fulfill The Experience Requirement

Those pursuing CFP certification come from a wide range of backgrounds. Some are undergraduate students in a financial planning program with limited hours of work experience, while others are seasoned financial professionals who have worked with clients in related areas of finance (e.g., investment management or insurance). Still others are career changers from totally different fields and have to navigate the transition to a job in financial planning.

Given these varied backgrounds, there are a wide range of opportunities available for candidates of all types to fulfill the Experience requirement.

Using Previous Activities To Fulfill The Experience Requirement For CFP Certification

As noted earlier, qualifying experience gained within 10 years prior to passing the CFP exam is eligible to be counted for the Experience requirement for CFP certification. For example, someone who has been working at a financial planning firm while completing the Education requirement and studying for the exam can potentially use those hours toward completing the Experience requirement (either through the Standard or Apprenticeship Pathways, depending on their responsibilities). But those without experience working at a financial planning firm might be surprised to find out that some of their other experiences might count toward the requirement as well.

Recall that for those pursuing the Standard Pathway, the experience must include performing 1 or more of the 7 elements of financial planning, doing at least 1 of 5 financial planning functions. While many of these areas relate to working in a financial planning firm, there is also significant room for other experiences to count, particularly in providing indirect support to the financial planning process.

CFP Board defines indirect support as positions that are firmly rooted in the financial planning process, including (but not limited to) employee benefits administration, financial planning compliance, and journalism pertaining to financial planning topics. While this experience is subject to review and evaluation on a case-by-case basis by CFP Board, it greatly broadens the potential experience that might count toward the requirement.

For example, an individual who wrote about financial planning topics for an industry publication could potentially count those hours toward their Experience requirement. This option could be particularly useful to career changers, who might have worked in a related field (e.g., financial journalism or employee benefits) but who are looking to make a change to comprehensive financial planning.

Being able to count previous experience can give candidates a head start on completing the Experience requirement or even having the requirement completely fulfilled by the time they pass the CFP exam. And while an individual might not be sure whether a certain previous job will be included as qualified experience by CFP Board, it can still be worth submitting the experience, because having all (or even some) of the hours accepted can greatly accelerate their path to becoming a CFP professional!

Using Full-Time Work Experience To Meet The Experience Requirement For CFP Certification

The quickest way to build hours for the Experience requirement is to work in a full-time position, either paid or an internship. CFP Board allows candidates to count up to 40 hours per week of work toward the Experience requirement, so those in a full-time position will have to work for about 2 years for the 4,000-hour Apprenticeship Pathway and approximately 3 years to fulfill the 6,000-hour Standard Pathway.

Given that the Apprenticeship Pathway requires candidates to work directly with clients in all 7 elements of the financial planning process under the direct supervision of a CFP professional, positions that fulfill these requirements are less common than those that qualify for the Standard Pathway (and given the direct work with clients, some might expect these candidates to also have previous client-facing experience). While job titles within financial planning firms are not standardized, candidates who wish to pursue the Apprenticeship Pathway path might look for Financial Advisor or Associate Financial Advisor positions that meet the Apprenticeship Pathway requirements.

On the other hand, because positions eligible for the Standard Pathway only need to include at least 1 element of the financial planning process, these jobs are likely to be open to a wider range of candidates. Such positions at financial planning firms could include Paraplanners and Client Services Associates (although some paraplanner positions could also potentially qualify for the Apprenticeship Pathway, depending on the responsibilities, so candidates could verify with the employer whether it does).

Another potentially attractive option for aspiring planners is financial planning ‘residency’ programs offered by some firms. These are designed to give new advisors exposure to the wide range of functions of a firm in a structured manner and can be valuable for candidates not only because completing a residency can fulfill a substantial portion of the Experience requirement (typically on the Standard Pathway), but also because finishing a residency can prepare the candidate to take on a position of greater client-facing responsibility.

Still another option for aspiring planners to earn hours toward the Standard Pathway is to start their own firm. While there are a wide range of benefits to being an advisor with the CFP certification, it is not a requirement for starting a financial planning practice. Of course, it can take time to build revenue when just starting out, so those on this path will want to have a sufficient financial cushion (or work on a part-time basis while earning a separate source of income).

In addition, the advisor should consider whether they are prepared for the wide range of client (and business management) challenges they are likely to face, from developing client meeting skills to the marketing and compliance requirements of running a business. But for individuals who would rather work on their own rather than for a firm, working full time on their own firm can allow them to start building their business while accumulating the hours needed to fulfill the Experience requirement.

Other Options To Meet The Experience Requirement For CFP Certification

While some aspiring CFP professionals will be ready to jump into a full-time position after completing the Education and Exam requirements, others might need to gain experience hours through a mix of part-time work and other non-conventional activities. While having a full-time job is typically the fastest way to meet the Experience requirement, those whose circumstances preclude them from taking on full-time work can pursue other qualifying activities 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.

Due to family or other professional duties, some individuals might only be able to manage part-time work that offers financial planning experience. One option that can offer these individuals flexibility is to work as a (virtual) paraplanner. Often, financial planning firms need the kind of support a paraplanner provides (e.g., client data entry, document management, and initial financial plan construction), but do not necessarily need one to work full time. In these cases, firms may seek paraplanners who work part-time (and often virtually, sometimes for multiple firms). This can be a win-win situation for both the firms and the paraplanner, who gains experience while being paid with a schedule that fits their needs.

Other potential part-time opportunities that provide experience hours include teaching financial planning-related courses that are offered for college credit, or at a CFP Board-registered program (though these opportunities might be challenging to get before obtaining the CFP certification), as well as writing about financial planning-related topics (which falls into the indirect support experience category). For example, working as a part-time freelance writer on financial planning topics could be a way for an individual who needs flexibility in their schedule to build up experience hours.

Another option to gain experience hours is to seek out pro bono opportunities. Doing so can be particularly useful for aspiring planners who have full-time jobs and cannot take on part-time work hours (perhaps because of scheduling conflicts with their current position). It is also an opportunity to get experience working directly with clients (and is a great service to the community!).

The Foundation for Financial Planning is one of the top organizations arranging pro bono opportunities for financial planners and also works with a range of organizations around the country to serve local communities. While some opportunities are for practitioners who already have the CFP certification, there are plenty of options for aspiring CFP professionals as well, such as those offered by some local Financial Planning Association (FPA) chapters that often have pro bono opportunities.

Still other pro bono programs serve more targeted clienteles (e.g., Budget Buddies offers opportunities to work with low-income women and girls). And for those with an interest in tax planning, the IRS’s Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) Programs can provide experience helping individuals prepare their income tax returns. Aspiring (and current!) planners can also seek out social services organizations in their communities that offer coaching and financial literacy opportunities.

Two additional programs that give participants hours toward the Standard Pathway Experience requirement are the FPA Externship and the FPA Residency. The FPA Externship is an 8-week, virtual program that allows students, new professionals, career changers, and others to see how financial planning is applied across diverse financial planning firms. Among other features, participants receive training on a full range of financial planning topics and live office-hour access to financial planners for a look inside client meetings and the planner/client relationship. Those who successfully complete the Externship can receive 180 Standard Pathway hours toward the Experience requirement.

For those who want an intensive, experiential learning program on the ‘art’ of financial planning, the FPA Residency is a 5-day, in-person program where participants take part in client case studies in small groups and receive individualized feedback from seasoned financial planners. This can be a helpful way for aspiring planners who have built their technical knowledge through the Education and Exam requirements to apply it to the kind of client interactions they will face in the real world. Those who successfully complete the Residency can receive 500 hours for the Standard Pathway Experience requirement. Notably, these hours are eligible to be counted even if the individual is also working full time.

How To Decide The Best Way To Fulfill The Experience Requirement For CFP Certification

Each aspiring CFP professional will take a different path toward completing their Experience requirement. While some individuals might already have fulfilled the requirement with previous work experience, others will be starting from scratch. Some might be able to take on a full-time position, while others might have to seek out part-time opportunities until they can commit to working full time. Ultimately, the best path for a given individual is going to depend on a variety of factors, including their previous experience, career aspirations, and the opportunities available to them.

Choosing A Path To Meet The Experience Requirement For CFP Certification

Several elements go into the decision on how to accrue the hours needed to fulfill the Experience requirement for CFP certification. A good first step is to consider whether any prior jobs, internships, or pro bono experiences might count toward the Experience requirement.

For example, a career changer who previously worked in a full-time position in client investment management for 2 ½ years (approximately 5,000 hours) could potentially use that experience toward the Standard Pathway, and may only need 6 additional months (approximately 1,000 hours) of experience to fulfill the Experience requirement. In this case, they could pursue a full-time position or piece together hours on a part-time or pro bono basis. They might even consider completing 500 of the needed 1,000 hours through the FPA Residency program.

On the other hand, an individual without prior experience can consider whether they want to take on a full-time job in financial planning. Recent college graduates from financial planning programs may likely be able to jump into a full-time position, but the decision could be different for a career changer, who will have to balance the ability to fulfill the Experience requirement more quickly through a full-time job against their financial circumstances and family obligations (e.g., moving from an established prior career to an entry-level financial planning position could entail a significant drop in income).

Those whose circumstances limit them to non-full-time opportunities could seek out options like pro bono work or the FPA Externship to accumulate hours until they are able to take on a full-time position (and will need to be aware that the Experience requirement must be completed within 5 years of passing the CFP exam, though they can apply for a three-year extension).

How To Find Experience Opportunities That Align With Career Goals

Aspiring CFP professionals can also consider their career goals when creating a plan to fulfill the Experience requirement. Because the purpose of the Experience requirement is not just to ‘check a box’, but rather to gain the experience needed to be a qualified financial planner, seeking out the proper experience for one’s career goals can help ensure that they are prepared for the client issues they will face as a CFP professional.

For example, financial planning firm residency programs ideally give aspiring planners experience in the full range of responsibilities that go into being a financial advisor. This could be a particularly useful experience for those who want to start their own firm, as they will have gained not only the significant practical experience, but also the hours needed to complete the Experience requirement (potentially allowing them to start their own firm as a CFP professional and accruing the benefits that come with certification).

For individuals who want to work their way up through an established firm rather than start their own, seeking out a position at firms that have established career tracks within financial planning (e.g., advisory, financial planning, investment management, or client service and operations) can allow them to fulfill the Experience requirement while potentially advancing at their firm in their financial planning area of interest.

Also, when reviewing potential opportunities at financial planning firms and assessing how long it will take to fulfill the Experience requirement, it can be helpful to learn whether a given position might qualify for the Apprenticeship or Standard Pathways (while employers can assist candidates by making it explicit in their job posting whether the position’s responsibilities reflect the requirements of one Pathway or the other).

Other important factors when considering employment at a firm include whether the firm (and position) is planning- or sales-focused (as an aspiring planner does not want to be surprised by starting in a position where the emphasis is on product sales rather than financial planning). Aspiring advisors also might want to seek out firms that are growing, as they are likely to offer more opportunities and be on a more solid financial footing.

Finally, for those whose first positions in the industry do not entail significant client interaction, having a supplemental experience that allows for practice in client situations, such as the FPA Residency, can be beneficial.

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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.

While some aspiring advisors might seek out the quickest path possible to meet all the requirements for obtaining the CFP mark, it is important to recognize that the Experience requirement is an opportunity to gain the skills and confidence to better serve financial planning clients, no matter the career path an individual chooses.

By creating a plan that not only fulfills the CFP Board Experience 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!