It's a sunny and pleasant autumn afternoon in late September, but I might as well be trapped inside by the gray and frigid temperatures of January. Sitting at my kitchen table in my apartment in the northern suburbs of New York City, I stare glumly at a shambles of textbooks, legal pads, and scrap paper covered with penciled financial scribblings. My HP 10BII financial calculator is still functioning even though I've been jabbing my finger into its keypad with growing forcefulness. Breaking it would give me real pleasure; they only cost $30.

Patience is at a real premium right now. I'm studying the Income Tax section in my review for the Certified Financial Planner exam, less than eight weeks away, and I'm starting to feel a little out of my depth.

Which method do I use to solve this question on business depreciation? Straight line? Double declining? Or 150 percent declining? What's the deal with this Section 179 depreciation? Where does MACRS fit in?

This isn't like doing my income taxes every April. It's far worse.

If there's any consolation, it's that I'm not alone. Last year the CFP exam, a 10-hour ordeal spread over two days, was administered — “meted out” might be more apt — more than 6,000 times. The pass rate lately has hovered just above 50 percent. The exam is difficult enough that it's not unusual for lawyers and certified public accountants to fail. The scope of knowledge on which applicants are tested is broad and, for many, disconcertingly vexing. Everything, it seems, is covered: taxes, insurance, retirement and estate planning, employee benefits, and investments. Professionals with expertise in one area often are tripped up by issues in another subject. The 10-pound package of review material I ordered included two texts totaling nearly 1,300 pages.

The Desire For Expertise Will Grow

It's not going to get any easier. This year the CFP Board of Standards is considering expanding the instructional prerequisites that are mandated before sitting for the exam. Some professionals already are bailing on the test; the number of people who have taken it has trended downward in the last two years, an apparent function of the economic crisis, which has diverted attention and resources away from professional development.

But the trend is unlikely to stick. Among retail FAs, the CFP is well respected and more than 60,000 hold the designation. Industry observers believe that in the long run the demand for the CFP and other respected professional designations (see table) is likely to grow as demand for provable expertise increases. In a telephone survey of 254 certificants that the CFP board commissioned in 2008, 74 percent said the designation contributed to professional success, compared to 8 percent who felt it did not and 20 percent who were neutral on the subject. (But, if you do pass, don't automatically call yourself a fiduciary; see sidebar.) In its “State of the Wirehouses” report last fall, the research firm Cerulli Associates reported that 61.6 percent of wirehouse advisors indicated they would offer more financial planning services.

Rob Garcia, who launched his own independent financial advisory practice in Templeton, Calif., in 2003, took and passed the exam in November. Garcia says he wanted to find a way to differentiate himself from others in his business. He also was looking for a way to reinforce with clients the idea that his expertise meets a higher standard than non-CFP holders. There are many people in the market who call themselves financial advisors, he says. “I think clients over the last couple of years are now paying attention more to who they're working with. Not only the firms, but the individual advisor,” says Garcia, 38.

Michael Tighe, who brokers trades between hedge funds and investment banks at a firm in Manhattan, says he took the exam last year in part because he wanted to expand the depth of his knowledge. It also could serve as a backup plan if electronic trading supplants his current job sometime in the future. “I don't know that [my job] is going to be around forever. It's useful, because a lot of stuff we do is customized and very technical in nature, and you can't replace everything electronically,” says Tighe, 49. Nevertheless, “I like to not have all my eggs in one basket. I'm looking 10 years from now.”

The CFP is “the most rigorous and the most well-respected,” he adds. “They take themselves very seriously, and I definitely think it has more cachet than the others.”

Why I Took It

I'm not a typical CFP applicant. Until recently I had been a business reporter at a daily newspaper in upstate New York; these days I am a senior editor for this magazine. My former employer had agreed to pay for the six CFP courses as part of its tuition reimbursement program. So, I reckoned, why not learn about financial planning? I had no plans to take the test, but, after finishing the requisite course work, I couldn't see any reason not to follow through; a successful completion could open new career doors. I signed up for a $1,300 review course, paid my $595 registration fee over the Internet, and hoped for the best.

The CFP exam consists of 285 multiple-choice questions over two days, but don't be fooled by the format. A number of the questions are based on hypothetical case studies, and the descriptions are so detailed that they can carry on for multiple pages. People have an average of about two minutes to answer each question, a time limit that reinforces the necessity of knowing rules, exceptions to rules, and phaseouts to exceptions to rules, and knowing all of it absolutely cold.

“Mark and move” is the strategy that my review instructor shared with his students. Don't second-guess your answers without some compelling reason. So when I finally took the exam in a lecture hall with about 75 other hopeful professionals at Pace University in Manhattan, I tried to stay focused and kept an eye on the clock. By the end of the second day, I was so stiff that it was a little difficult to get out of the chair. I wasn't alone. After the proctor had collected the answer sheets, the man who sat in front of me let out a sigh and declared to the strangers around him, “Boy, that was a tough test!”

And for some who are seeking the designation, that's just fine.

“Harder is fine. I'm OK with that,” Garcia says. He regularly got up at 5:30 in the morning to get in 90 minutes of studying before heading off to work, and then resuming the study routine after returning home at night. “I didn't want it to be too easy. If I walked in there and was able to walk out with the designation in hand that day, then it wasn't worth getting.”

At the Certified Financial Planning Board of Standards Inc., the sentiment is much the same. The Washington, D.C.-based organization oversees the exam and the CFP trademark. The test has existed in its present format since 1991. (Its previous format was somewhat more leisurely: applicants were tested separately on each of the six education modules, rather than having to test on everything over two days.) The organization says its test standards have been consistent, along with the pass rates, which ranged from percentages in the low 50s to mid 60s over the last 15 years.

The exam's difficulty serves a purpose, board spokesman Chris Wloszczyna says. “You have to look at it in the context of CFP's mission, and that's to benefit the public,” he says. “If we're going to grant something to individuals that's a recognized standard of excellence for personal financial planning, then obviously it needs to be a very rigorous examination. That's to make sure the public has access to competent and ethical financial planners.”

Clients Want More

As well-regarded as the designation is, the number of test-takers has fallen off over the past three years. A record 9,300 exams were taken in 2006, falling to 6,100 in 2009. Industry experts attribute the decline to the global financial crisis and the necessity of financial advisors to focus on their businesses and their client relations to the exclusion of education and career development. Another factor is the exodus of advisors from large wirehouses to operate their own practices. Often the bigger broker/dealers' professional development programs help pay their employees' CFP expenses.

Executives at financial firms suggest that the slippage in interest in the exam will be reversed by market changes that are raising the bar for practitioners. Jim Foley, director of advisory and business development with Savant Capital Management in Illinois, says clients are demanding more. “If you're going to go up-channel to a higher net worth client, you're going to run into more-than-average day-to-day technical issues,” he says. “In the wirehouse world, they try to provide the product. You don't need to understand how to calculate a retirement, here's the product to fulfill the need.

“I think the wirehouse world and the whole industry is evolving, because that's not going to work anymore. You have to go up-channel a little bit in your knowledge.

“If clients didn't demand it, the industry wouldn't provide it. I think a big chunk of it has come out of the market setbacks. Was there a big booming desire for financial planning in 1999? Not really. It was just, ‘Give me a basket of tech stocks and away we go.’ When people blew up, they stepped back and realized they didn't have a process, they had just been fortunate. I think advisors responded. Advisors realized that if you make it strictly about individual investment performance alone, you're going to lose your clients in bear markets.”

At Edward Jones, managers are ramping up interest in the CFP. About 650 of the firm's 12,000 advisors held the designation as of last April; by the end of the year, another 290 were enrolled in CFP programs, says Kevin Alm, the partner responsible for training. The company hopes to expand enrollment by 300 each year; internal research shows it helps performance at the branch offices, Alm says. “What we believe, and what statistics are beginning to show us, is that you are more likely to have a greater degree of success if you have completed the CFP program,” he says. “I think the financial advisors understand that designations in general, and the CFP specifically, help them serve their clients better. And if they serve their clients better, they make more money.”

As for me, obtaining the CFP remains an elusive goal. Exactly eight weeks after I took the test, a large white envelope arrived in my mailbox from the CFP board announcing that I was not among the 54 percent of test-takers in November who had passed. Disappointing to be sure, but I know I had plenty of good company.