CFP Board Exam Places New Emphasis on ‘Psychology of Financial Planning’

Advisors will be expected to understand behavioral finance, sources of money conflict, and more.

(Illustration by RIA Intel)

(Illustration by RIA Intel)

The Certified Financial Planner Board of Standards has updated its 2021 list of required “knowledge topics” for CFP certification for the first time since 2015, adding a category called the “psychology of financial planning.”

Accounting for 7% of the exam weighting, the new category includes client and planner attitudes, values, biases, behavioral finance, sources of money conflict, and principles of counseling. It also includes general principles of effective communication and crisis events with severe consequences.

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Among the eight principal knowledge topics, retirement savings and income planning, tax planning, and professional conduct and regulation all will have greater exam weight.

Conversely, general principles of financial planning, risk management and insurance planning, and estate planning are less represented. Only investment planning remains constant.

The categories with the greatest weighting are retirement savings and income planning (18%), investment planning (17%), and general principles of financial planning (15%).

In 2015, education planning was an independent category that accounted for 6% of the exam. That category has been eliminated and questions about that topic are now part of the general principles of financial planning category.

The CFP board also rejiggered the categories by consolidating education planning, which appeared in the 2015 study, into underlying topics within the general financial planning principles category.

(RIA Intel)

(RIA Intel)

The changes are based on findings from the CFP Board’s latest Practice Analysis Study (conducted in 2020), which it says is the largest research study in the U.S. related to financial planning.

The revised topics will be incorporated beginning with the March 2022 CFP exam.

“For the first time, our Practice Analysis Study included research with firms that hire CFP professionals as well as clients of CFP professionals,” said CFP Board CEO Kevin R. Keller, CAE in a statement. “Adding that research to the traditional research with CFP professionals and financial planning educators provided a 360-degree view of financial planning practice.”

Greg Bartalos (@gregorianchance) is editor of New York City-based RIA Intel.

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