Executive Summary
It takes a substantial investment to earn the CFP certification. The financial cost can be significant, between signing up for the educational classes, potentially take a live exam review course, and enrolling for the CFP exam itself. And the cost in terms of time is significant, too - for many, the entire process often takes 12-18 months of putting in the hours it takes to learn the material. Fortunately, at least some advisory firms are willing to help share in some of the costs.
In this week’s #OfficeHours with @MichaelKitces, my Tuesday 1PM EST broadcast via Periscope, we look at the question of how much should an advisory firm be expected to invest for a paraplanner to get the CFP marks? And in particular, if an advisory firm is willing to help cover the financial cost, is it appropriate to ask for time off to study as well?
The short answer: No. While a growing number of firms will at least support the financial cost of CFP coursework - in part, because it may be outright too expensive for many entry level paraplanners to afford on their own - most firms will still reasonably expect the paraplanner to make an investment, too. Which means if the paraplanner can't put in the dollars, at a minimum he/she can put in the time it takes to study.
Given the commitment, that may well mean that a paraplanner who wants to earn their CFP marks and get promoted will have to carve out from their personal time in the evenings and on the weekends to study. But the reality is simply that sometimes, that's what it takes to get ahead. You always have the choice to not make the investment, and remain in the job you're currently in. But if you want to take your career to the next level, you have to find a way to make the investment in yourself, and not just expect the firm to give you the dollars and the time!
(Michael’s Note: The video below was recorded using Periscope, and announced via Twitter. If you want to participate in the next #OfficeHours live, please download the Periscope app on your mobile device, and follow @MichaelKitces on Twitter, so you get the announcement when the broadcast is starting, at/around 1PM EST every Tuesday! You can also submit your question in advance through our Contact page!)
#OfficeHours with @MichaelKitces Video Transcript
Welcome everyone! Welcome to Office Hours with Michael Kitces!
For this week's discussion, I want to take a good question that came in recently. I hear this one a lot from new folks that have come into the financial planning world.
This particular version of the question was from Christine. Christine said... I'm reading her question:
I joined as a paraplanner in a good planning firm last year. Once I'm there for a year, they'll cover the cost for me to start my CFP classes. But, with my long commute I won't have much time to study in the evenings. During the weekends, I teach yoga classes. So would it be okay for me to ask my boss to get Friday afternoons off so I can study for my CFP classes?
The Value of CFP Certification [Time - 1:08]
I think this is a really good question that Christine asked.
First of all, though, I want to say to Christine: Congratulations to you, for working with a good firm that's supporting your career by covering the cost to pursue the CFP marks. That's not inexpensive, as I'm sure you may have noticed from looking at it yourself. You can spend several thousand dollars over the span of a year or two going through the educational materials and maybe a good live review for the exam, not to mention registering for the test itself. Your firm is making a big investment into you to advance your career.
You're definitely right to recognize that going after the CFP marks is going to take time, as well. It's going to take time to get through all the classes. And I get it, that it's tough when you're at work most of the day, and then you've got a long commute so you may be getting home late... and then, you've got other activities that you're into on the weekend.
All that being said, I'm going to have to say outright that I think the answer to your question "should I be given Friday afternoons off to study for my classes" is a pretty unequivocal: No.
No, you shouldn't get Friday afternoons off to study for your CFP classes.
But, let me explain why.
Climbing the Financial Planning Career Ladder [2:16]
You've already implied that with the job you've got, having the CFP marks is not actually necessary. It's not a prerequisite to do your current job. After all, if you had to have the CFP to do your paraplanner job at your firm, you would not have been hired in the first place. You could not have come into a job where after a year you got the opportunity to pursue your CFP marks.
Which means studying for your CFP classes isn't about what you need to do the job that you've got. It's what you need to go to the next level. To move past paraplanner, and get the technical competency that you need to move up to become an associate planner, or whatever the next step is in your firm.
Now frankly, it's your decision about whether you want to study and move up to the next level. You don't have to go take your CFP classes and do this. They don't have to pay for your classes.
But they're willing to make the investment in you. They're willing to spend more than it takes to pay you to do the job that you're doing, in order to give you the opportunity to move up.
But that means they have an expectation - an expectation that you, at a minimum, are going to make an investment of time? You don't even have to come out of pocket for dollars! But you have to put in your time.
Which means you have to be willing to take a little bit of a step back from all the other stuff that you're doing right now, to make this happen.
Sharing the Cost of Earning CFP Certification [Time - 3:25]
Frankly, I feel like I should point out, your firm actually does more to support your CFP certification than a lot of other firms that I know.
Many advisory firms will make you pay up front for your CFP classes, and then only reimburse you after the fact, if you pass. Not only is all the pressure on you, but literally you have to have the money to come out of pocket up front. And you may or may not get it back later!
A lot of other firms I know do cost sharing. They'll pay 75% of the CFP course program, but you have to pay the other 25%. They want skin in the game from you.
So frankly, by comparison with what else is on the landscape, I think your firm's actually above average in their support, by being willing to cover the entire cost of your CFP classes.
But again, the fact that they're coming to the table with 100% of the financial cost, frankly doesn't mean they should be the only ones making an investment. They're bringing the money to the table. You need to bring the time.
Investing The Time It Takes To Get The CFP Marks [Time - 4:24]
I get that this is a big ask of time, when you've got a long commute, and you don't have a lot of time in the evenings, and you've got other activities over the weekend. But, this is an investment you make in yourself.
You can see in a lot of the comments now that are coming through. People have said [from Periscope]:
Absolutely I studied on the evenings.
I studied on the weekends.
One person I think just said [from Periscope],
I had no life for a period of time during that exam review prep period!
Exactly. That's all part of the investment that you make in yourself.
The good news is this isn't a permanent thing. If your boss came in and said "hey, we want you to work crazy hours indefinitely, how's that sound?" I would tell you to run far, far away. We can't do those long hours at a job indefinitely. It's not good. It's not healthy. Eventually you're not very productive, and you can burn out.
But this isn't a permanent investment of your time. This is temporary. This is you taking time, for a limited period of time, to get through your CFP marks, and take your career to the next level.
I realize it's not a trivial amount of time. Most advisors I know go through CFP programs in 12 to 18 months. Some do it a little faster. Some do it a little bit slower. But you can manage the pace as you wish. Maybe give up one day of your weekend balanced against your other activities, and it'll take you 18 to 24 months to get through it. Or, maybe you want to take the whole weekend, put the pause on your teaching yoga, and do this continuously and intensively for the next 9 to 12 months to try and plow through your CFP coursework in a year. These are tradeoffs decisions for you.
Frankly, you can even try to find other opportunities to invest more time. Maybe you can get exam materials that you could listen to during your commute. I know Keir has a program where you can get MP3 files and listen to them during your long commute!
One comment from Periscope here had a great point. I don't think it's crazy maybe to go back to the firm and say "hey, could I work more hours on fewer days, so I can work from home one day to do my studying?" So you're not going to work fewer hours in total, but maybe you at least cut a day out of commute. I think that's a reasonable ask. Though the firm may still prefer you there 5 days a week.
To Get Ahead, You Must Invest In Yourself [Time - 6:40]
Again, the fundamental point here... I'm not trying to be insensitive to the value of your time, and how tiring it is to be working all day, and then having a long commute, and wanting time to do your own stuff on the weekends. I get it. I really do. But, recognize that if you want to take your career to the next level, there's an investment that you have to put in. You don't need to take CFP classes to keep your job. You don't have to take the time to keep your job. They don't have to pay the money to do your job. But if you want to move up, that's the investment you've got to make.
And I know what it's like, because I lived a version of this myself to earn the ridiculous amount of 'alphabet soup' degrees and designations I have after my name now. This was my path as well. I was working full time, and I did classes during the evenings and weekends.
Early on, I was pretty intensive in taking classes. I had a really short commute, and not a lot of other stuff going on in my life. I had the time for a more intensive class schedule. As my career progressed, though, my available time crunched down a bit. And so for a long time, a half-day every Sunday morning, and one night a week, was all I could manage. As a result, I took the absolute minimum courseload I could. It would take me a year or two to get through a program that most people would do in six months.
But, I got through it. Just by building the habit of studying, and doing it regularly. Small increments stretched out repeated over long periods of time adds up to a lot!
I'm not trying to say... this isn't one of those "I trudged to school through the snow, uphill, both ways, and because I did it you should have to do it, too!" That's not the point here. The point is that these are the investments we make in ourselves, for a period of time, to move forward in our careers, to get to the next level.
Because frankly, in today's world, if you don't do it, someone else will. Someone else who is more ready to be committed, more motivated, more willing to put in the time, is going to move ahead of you. That job you want to move up and get promoted into, above the paraplanner role you're in right now... someone else is going to come over top, and take that position from you, because they are out there working their ass off studying in evenings and weekends and doing what it takes to get ahead, and they're investing more into it than you are.
So getting back to your original question: "Should I ask my employer for time off so I can take the classes that they're already paying for, so that I can get a promotion to the next level?" My answer is "no". If it was on the job training for something you needed for your current job, it might be different.
But this is about you being able to get a promotion and take your career to the next level where. They're bringing some dollars to the table. You've got to at least make the investment in the time. It's not permanent. It won't last forever. But that's what it takes to move forward sometimes. Because frankly, if you're not ready to do it, someone else is going to do it in your stead.
Ultimately, this is your decision. Certainly, I have a little bit of a bias to encourage people towards the CFP marks and advancing their career and becoming financial planners. Because I want to see the world with a lot more financial planners. But it is your choice. And you should recognize that many people would be envious of you, because they don't have the money to pay for CFP courses, and they may not work for firms that are willing to pay for it the way yours is. You're lucky, Christine, that you don't have to even make a financial commitment. You get to just make it a commitment of your time.
So you have a firm that's coming to the table with the dollars. Bring your time. Move your career forward.
I hope that helps! Thank you everyone for the comments. I see lots of comments today, and lots of tap tap [Periscope] hearts. I guess this topic hit a nerve for a few of you!
This is Office Hours with Michael Kitces, normally 1:00 p.m. East Coast time on Tuesdays. Unfortunately, I was tied up in meetings today, so here we are getting caught up now in the evening. Thanks for joining, everyone. Have a great day. Take care!
So what do you think? Did you do your CFP classes while working full time? Did your employer give you time off to complete the coursework, or prepare for the exam? What's the policy in your firm about covering the costs of CFP classes (or not)? Please share your thoughts and experiences in the comments below!
Michael, what a great topic. I have a little bit of a different story to share.
The firm that hired me when I was a paraplanner did so because I was working on the CFP and was enrolled in a CFP education program. This was a requirement to be hired and to keep the position as paraplanner. If a paraplanner decided to stop perusing the designation they would no longer be kept on. The company did offer a reimbursement plan for the CFP education and exam but in the end you paid for it. If you left the company you would have your last paycheck reduced for the amount that was not yet paid back. There was no waiver of repayment from the firm if you obtained the credential and stayed with the firm a minimum amount of time.
The company I also had a policy of VTO, or voluntary time off. This is where I obtained my free time to study for the exam. That said, VTO was not an option if meeting preparation and follow up were not completed and reviewed with the Sr. Advisers.
It’s interesting that you think paraplanners shouldn’t ask for time off to study for the CFP. There are other positions in other industries, and within the financial industry itself, where time off to study for tests and certifications is not only permitted, but encouraged! Everyone I know that is an actuary is actively encouraged to take ample time off (paid and unpaid) to study for the next exam. When I started in this industry as a financial sales advisor, I was given paid time off (in addition to my regular vacation and sick time) and granted time in the office to study for my Series 7, Series 66, and state insurance license. Friends of mine that work in the IT industry are given paid time off to study for CompTIA certifications as well.
I don’t think it’s unreasonable to ask for time off to study for a test. Yes, the CFP is required only to “take your career to the next level,” but so are the other exams and certifications I mentioned. Obviously, it’s up to the firm to make the decision, but it’s a conversation that I think is worth having with the partners of the firm and shouldn’t be dismissed with a quick and hard “No.”
Fair point. As a former actuary myself, I thought of this. That said, in my experience, the CFP exam doesn’t even come close to the difficulty of the 5-10 actuary exams you’ll end up taking. They’re just not on the same level. When you can put in 10 months to fulfill the education and exam CFP requirements and be done with it (that’s what I did), I think you can find the time. Just my opinion though!
That is true. Reading back through, I can see the situation a little more clearly. I don’t think it should be expected to receive additional PTO for the CFP, but it couldn’t hurt to ask.
Sam,
I think there’s a difference between licensing exams (Series 7 & 66, state insurance) versus the CFP marks.
Because the licensing exams are a legal requirement to HAVE the job. Most firms I know give people ‘time off’ to get their Series exams when they start, because they literally can’t DO the job or talk to clients until those exams are done.
The CFP marks are different. It’s not a minimum requirement to do the job (though I wish it was viewed that way!). It’s a path to getting a promotion to a higher job. Which makes it about investing in oneself, versus the firm giving time to complete an exam that’s necessary to legally do the job at all.
– Michael
Agree with this 100% and this is how our office handles securities exams vs. obtaining designations. I believe if a planner wants to pursue the designation that he/she should discuss with their superior and put a plan together. When so much time will be invested it’s always good to make sure both parties are on the same page as far as expectations go.
“The short answer: No.” Agreed.
Thanks Kevin! 🙂
– Michael
The situation described above I entirely agree with the answer “no”. The factors that could be at play in this question are numerous, but not limited to: Did the paraplanner complete the education before starting work at the firm? Who’s paying for the exam? Who’s paying for the live review? Does the paraplanner get a raise after passing the exam? Does he/she get a raise when the marks are received? How big is the firm? How long has the paraplanner been with the firm?
These are just a few of the things on top of my head.
Disclaimer: I am a paraplanner preparing for the exam in November. I completed my education courses through a university program while earning my bachelors.
My firm is paying the tuition for my CFP coursework but not the books. The caveat is that I must achieve a grade of “B” or better to get 100% reimbursement; if I get a “B-” or a lower, passing grade, the firm reimburses only 50%. I assume at this point that if I have to repeat a course, they will reimburse me for the other 50% if a “B” grade is achieved the second time around. For the most part, I am studying on my own time (after working a full day), sometimes into the deep hours of the morning. However, my supervisor is flexible when it comes to studying for course exams. For most of the courses, I have to double-down to prepare for exams and have found it extremely helpful to be able to study the morning of the exam when I’m fresh. I think it’s a 2-way street on which both employee and employer have obligations to one another which need to be upheld.
Melody,
Personally, I have to admit I’m a fan of this approach – the firm covering most of the costs, and requiring a certain grade to get full reimbursement. There’s always a risk (at least from the firm’s perspective) that paying for the classes leads employees to not take the studying and exam seriously, for which I think this is a reasonable way to get some ‘skin in the game’ buy-in from employees, without being unduly burdensome.
Kudos on investing your own time to study and get through the material! And I do think that asking for study time the morning of the exam is quite reasonable! 🙂
– Michael
I’m with Northwestern Mutual, and they will pay for essentially ANYONE to get their CFP. They also provide full financial support for about 15 other designations, including the MSFS if you qualify (based on production). For my CFP, they paid for each course up front. If I failed a course, I had to pay to retake it. When it came time to do the CFP exam/review course, they did it on a reimbursement basis. As long as you pass, they would reimburse the full CFP exam cost as well as up to… something like $1,200 in review course costs. It’s been a huge benefit to me and will continue to be as I finish the MSFS. I’ve never asked for time off to study any of it, since I reap most of the benefit from having the credentials. Granted, my boss didn’t pay for any of it.. the company does. So maybe I could have! 🙂
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