Earning a CFP designation, while not a necessity, seems a commonplace task for students graduating with a financial planning degree. Yet the cost of the exam can be prohibitive for many. To help, New Planner Recruiting is introducing a new scholarship program could give a few more students the opportunity achieve this goal.
Like their medical and legal counterparts, graduates earning a financial planning degree are strongly encouraged to take a $600 exam that tests their acumen on a wide range of industry knowledge. This is especially true among the CFP Board-registered degree programs, which have curriculum directly based on the CFP exam topics. The exam currently takes two days to complete, and while that will be dropping down to a one-day, 6-hour exam in December, the CFP Board has promised the difficulty level will not decrease.
The problem is that many students don’t have the funds, not only for the exam itself, but the study materials and the review courses, which can cost up to $1,000. A 2013 study done by the CFP Board and San Diego state found that of over 500 students with bachelor’s or masters in financial planning from three university programs, 351 students (61 percent) had not yet taken the CFP certification exam. The CFP Board declined to disclose the programs studied.
Lukas Dean, director of William Paterson’s financial planning program, says the number one reason more of his students are not taking the exam is the “prohibitive cost,” especially if their current or potential employer does not sponsor them. “The ones who take it are usually sponsored by their firm,” Dean says.
Currently, the CFP Board does not offer any discounts to students sitting for the exam, although non-certified FPA members receive a $200 discount off the CFP exam. This is where New Planner Recruiting’s new program is stepping in. The firm—which specializes in placing recent grads with RIA firms—will award three merit-based scholarships of $600 each to students in order to help cover the cost of the exam.
New Planner Recruiting co-founder Caleb Brown says offering the scholarship is a sort of “pay it forward” initiative, noting that he received a similar award from his local Dallas-Fort Worth FPA chapter when he graduated. Brown and Michael Kitces founded the recruiting firm in 2009 after seeing the many frustrations of financial planners when trying to hire new advisors into their firms.
“Critical to the development of the next generation of financial planner is demonstrating commitment and competence, two outcomes of successfully passing the CFP exam,” Brown says. “However, as a profession, we need to do a better job of encouraging and incenting financial planning program graduates to complete the path they began in school- namely to attain their CFP designation.”
Scholarship applicants must be currently enrolled in a CFP Board-registered degree program or have recently completed one. Additionally, they must sit for and pass the CFP exam prior to December 31, 2015. The $600 scholarship will be paid to winning candidates upon proof that they successfully passed.
A three-person panel, including Brown, NAPFA CEO Geoffrey Brown, and FPA board of directors chairman Michael Branham, will review the applications, which are due by Wednesday, April 30, 2014.