Factors Associated with Success on the CFP(R) Certification Examination

Abstract We surveyed examinees from three administrations of the CFP(R) Certification Examination. Factors that are statistically significantly associated with passing the exam include primary business activity; highest degree earned; undergraduate GPA; the CPA, Enrolled Agent, and securities licenses or designations; and being a personal financial planning practitioner. Other studies have identified associations between CPA exam success and both highest degree earned and undergraduate GPA. We are not aware of other studies that have established a relationship between experience in the field and success on the related professional exam. Interestingly, employer incentives for candidates, including bonuses, raises, and promotions, do not have a significant impact on pass rates. (C) 2003 Academy of Financial Services. All rights reserved. 1. Introduction Certified Financial Planner Board of Standards, Inc. is a professional regulatory organization that fosters professional standards in personal financial planning so that the public values, has access to, and benefits from competent financial planning. To fulfill initial certification requirements to use the CFP(R), Certified Financial Planner(TM), and certification marks, individuals must satisfy educational, examination, work experience, and ethical requirements. In 1991, CFP Board introduced a single comprehensive examination to test the candidates' integration and application of the knowledge important to providing financial advice to clients. The CFP(R) Certification Examination is designed to assess a candidate's ability to apply financial planning knowledge to real-life financial planning situations. In 1999, CFP Board's Board of Examiners, working in conjunction with CFP Board's Board of Governors and the staff of Certified Financial Planner Board of Standards, embarked on a new project. The goal of that project was to identify factors that are associated with success on the CFP(R) Certification Examination and, wherever applicable, to share that information with individuals selecting a CFP Board-Registered Program, candidates preparing for the CFP(R) Certification Examination, and CFP Board-Registered Programs evaluating their educational training. 2. Literature review This project marked the first attempt to collect data from CFP(R) Certification Examination testers to identify factors that are associated with successful performance on this exam, so no literature specifically related to the CFP(R) Certification Examination exists. However, much can be learned from studies of factors related to success on other licensing and certification exams, especially those in allied fields. In a review of the literature concerning success on the CPA examination, several factors emerged. Using data from the Uniform Statistical Information Questionnaire (USIQ) completed by candidates taking the November 1965 and May 1966 CPA examinations in Illinois and Kansas, Reilly and Stettler (1972) identified scholastic record in college and inherent academic ability, as measured by scores on the SAT College Entrance Exam, as being positively associated with success on the CPA exam. They found that the number of hours taken in accounting and graduate study was not statistically associated with success, and they received inconclusive results on several other variables studied. Using the USIQ completed by candidates in 49 states for the May 1970 examination, Leathers (1972) also found a positive correlation between SAT scores and success on the CPA examination. In a second study using May 1970 USIQ data, Sanders (1972) reported that candidates with higher degrees performed better than those with lower degrees, but the hours taken in accounting did not correlate with exam success. He also found that students who took classroom courses rather than correspondence courses had a higher pass rate, but work experience did not contribute to success on the CPA examination. …