The CFP Exam Tests Integrated Planning Judgment — Not Memorized Dollar Limits
CFP is a six-hour, 170-question exam for candidates who must apply ethics, tax, retirement and estate rules to one client at once. Learn how rules interact, not this year's thresholds.
Check Your Readiness →Most candidates understand CERTIFIED FINANCIAL PLANNER (CFP) Certification Exam concepts — and still fail. This exam tests how you apply knowledge under pressure.
Items are stand-alone questions, short scenarios and multi-question case studies. Many ask what the planner should do first or which option fits stated goals and constraints, so an answer can be technically correct yet wrong for that client. Tax content follows the law CFP Board says is currently testable.
Build and implement a full portfolio immediately
Grief impairs judgment. Hold the proceeds somewhere safe and liquid, meet urgent needs, and delay irreversible decisions until the client is ready. Psychology items reward slowing down over a technically optimal allocation.
Take the distribution, then write the church a check
A qualified charitable distribution, available from age 70½, goes directly from the IRA to the charity, is excluded from income and counts toward the required distribution. It helps non-itemizers; it cannot go to a donor-advised fund.
Leave everything outright to the wife under the will
A QTIP trust pays all income to the surviving spouse for life, qualifies for the marital deduction by election, and lets the first spouse fix the remainder beneficiaries. Assets are included in the survivor's estate.
Surviving owners get a basis increase when shares are redeemed
In an entity redemption the corporation buys the shares, so survivors' basis is unchanged. Only a cross-purchase, where owners hold policies on each other, raises survivors' basis; it needs more policies as owners increase.
Under CFP Board's Standards, a material conflict must be avoided or fully disclosed with informed consent, then managed. Recommending a rollover into a firm-managed IRA that earns an advisory fee is a classic conflict requiring all three steps.
Treynor uses beta and suits a well-diversified portfolio with high R-squared; Sharpe uses standard deviation and fits when R-squared is low, such as a sector fund. Jensen's alpha gives actual minus CAPM-required return as a percentage, not a ratio.
The exception to the 10% additional tax for separating from service in or after the year of turning 55 applies only to the employer plan. Rolling first and withdrawing from the IRA before 59½ brings the additional tax back.
Inherited property generally takes fair market value at death and is automatically long-term. Gifted property carries over the donor's basis, with the lower value used for losses. A lifetime gift of a low-basis asset forfeits the step-up.
The grantor keeps control, so trust assets stay in the gross estate; the benefits are probate avoidance and incapacity management. Life insurance the insured owns is also included, even though it passes outside probate by contract.
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CFP cases blend tax, retirement and ethics in one client. Test how your judgment holds together.