What to Expect on the 2006 CFP® Certification Examinations

The CFP Board of Standards administers the two day CFP® Certification Examination three times a year during the months of March, July and November. This comprehensive exam tests a candidate’s knowledge in the following seven core subject areas: General Principles of Financial Planning, Insurance Planning and Risk Management, Employee Benefit Planning, Investment Planning, Income Tax Planning, Retirement Planning and Estate Planning. Every five years, the CFP Board reviews these seven core subject areas and related topics based on feedback from their Job Analysis Study of CFP® certificants. In addition, the CFP® Certification Examination will typically test any laws that have been in place for six months or longer as of the exam date. Furthermore, the exam will test the most current inflation adjusted numbers.

Candidates taking the March 2006 exam (to be given on March 17th – 18th at various locations across the United States), should learn the 2006 key facts and figures for all subject areas excluding Income Tax Planning which will still be testing 2005 key facts and figures. For example, candidates should know the 2006 limit for employee contributions to a 401(k) plan is $15,000 (up from $14,000 in 2005). Likewise, candidates should know the annual gift tax exclusion amount is $12,000 in 2006 (up from $11,000 in 2005). In regards to law changes, candidates will need to know about Roth 401(k) plans created under the 2001 Tax Act. However, candidates will not need to know about any of the recent law changes providing relief to hurricane victims as the bulk of these law changes will only be in place for a very short period of time.

Candidates taking the July 2006 exam (to be given on July 21st – 22nd at various locations across the United States), should know the 2006 key facts and figures for all subject areas including Income Tax Planning. For example, candidates testing in July will need to know the Section 179 expense amount is $108,000 in 2006 (up from $105,000 in 2005) assuming the total amount of property placed in service is under $430,000 (up from $420,000 in 2005). Candidates will not need to memorize the 2006 personal exemption amount of $3,300 (up from $3,200 in 2005) or the 2006 standard deduction for a couple filing married filing jointly of $10,300 (up from $10,000 in 2005) as these amount will be provided in the exam booklet.

Candidates taking the November 2006 exam (anticipated to be given on November 17th – 18th at various locations across the United States), should be prepared for the new topic list based on the 2004 Job Analysis Study. Based on the results of this 2004 study, the CFP Board restructured the 101 topics to 89 topics and reallocated the portion of the exam allocated to each core subject area.

General Principles of Financial Planning for the March and July 2006 exams encompasses 13% of the test for the November 2006 the percentage will decrease 2% to 11% of the test.

Insurance Planning and Risk Management for the March and July 2006 exam covers 10% of the test and increase by 4 percent for the November 2006 exam bringing its total percentage to 14 percent.

Employee Benefit Planning includes 8 percent of the exam for all the test in 2006,

Investment Planning encompasses 19 percent of the exam for 2006

Income Tax Planning covers 17 percent of the exam for March and July and decrease to 14 percent for November.

Retirement Planning includes 18 percent of the exam in March and July 2006 and increase to 19 percent of the exam in November 2006

Estate Planning will remain 15 percent of the test for all the exams in 2006.

In general, the CFP Board shuffled the topics around as very few subtopics were removed from the list. However, a couple new topics were added including charitable transfers using donor advised funds and the use of powers of attorney for incapacity planning.

To register for the CFP® Certification Examination or for a complete list of the new 89 topics, please go to the CFP Board’s website at www.CFP.net.

If you need study materials to help you prepare for any of the 2006 exams, please go to Keir Educational Resource’s website at www.keirsuccess.com or call Keir toll free at 800-795-5347.