As huge swaths of the financial planning industry have shifted from focusing on commission-based sales to providing client-centric comprehensive planning as true financial ‘advicers’, proving one’s chops to break into the financial planning industry has only become more difficult. CFP certification, which was once considered the industry ‘gold standard’, is increasingly becoming a base-level minimum requirement as firms strive to hire better and more capable new advisors. While this shift has served to create a legitimate 'barrier to entry' with higher minimum standards for competency, and has arguably elevated the overall service provided to clients, the fact that many employers now require having one’s CFP certification as a prerequisite for employment means that many new and aspiring financial planners now face costly intensive requirements just to enter the profession.
In other words, the struggle to attain CFP certification, along with completing the robust education requirements, is not just a matter of mastering the academic challenges of the subject material; it also involves managing large expenses that cover tuition (not just for the 6 specific financial planning classes required by the CFP Board, but also for coursework to obtain an undergraduate degree as well, which are often taken by students as two separate curricula), registration for CFP exam fees, and costs associated with CFP exam preparation programs (not to mention the ‘soft’ costs of taking time off from work and sacrificing personal and family time to study and prepare for the CFP exam!).
For those already in the financial planning profession, there is a chance their firm will agree to cover some (or perhaps all) of the costs required for gaining CFP certification. Yet because the CFP marks are increasingly required in order to apply for paraplanner and associate advisor jobs in the first place, employer assistance is less and less feasible as a means to support pursuit of the CFP marks. Accordingly, for those who have not yet entered the industry (or whose firms will not finance the cost), CFP scholarship programs are becoming a key resource to help the individual manage expenses. Scholarship funding for those pursuing the CFP marks generally focus on three areas: 1) Tuition or expenses related to the CFP Board’s 6-course education requirement (which is what the majority of current scholarships provide funding for); 2) CFP exam preparation courses; and 3) Registration fees for the CFP exam itself.
Ironically, though, while scholarships are offered by a wide range of organizations - from the membership associations, to corporate scholarship programs, to educational institutions themselves - there is a paradoxical challenge that more and more aspiring CFP certificants struggle to find dollars to cover the costs of CFP education and certification, even as a large number of CFP scholarship programs struggle to find enough applicants for their available scholarships!
Enter the Kitces.com CFP Certification Scholarship Database, which has collected all the available information on 186 CFP scholarship awards across 39 CFP scholarship programs available for aspiring CFP professionals trying to break into the industry (as well as seasoned financial advisors looking to earn their CFP marks). The database is structured to help prospective planners filter by background and location to find the scholarship that fits their needs, from merit-based programs to needs-based scholarships and those designed to support under-represented populations.
For scholarship applicants, winning an award can make a measured difference not only in their capacity to take the CFP exam, but also in future networking and career opportunities. This is because many scholarship applications are reviewed by a committee of practitioners who are actively looking for future employees. And since the application can impact both immediate and long-term opportunities, creating a strong, memorable submission is essential. Depending on the scholarship, many aspects may be considered, but good academic performance, solid references, and basic professionalism can go a long way.
Ultimately, as the financial planning industry grows, it will not only become more competitive for prospective financial advisors, but also for hiring employers looking to find the best of the best. While there are still many gaps in the scholarships available to aspiring financial planners, firms have the opportunity to create their own scholarships to help fill these gaps. Which can be beneficial not only for the firms creating scholarships (as they provide good branding opportunities to increase a firm’s visibility and can also help firms attract high-achieving and motivated employees), but for aspiring CFP professionals and students of financial planning as well. And with the introduction of the Kitces.com CFP certification scholarship list, we also aim to help bridge the gap by guiding those who are looking to join the profession to the support they need to realize their educational and professional goals!