A sluggish economy dampens prices; why should professional examinations be an exception? The Certified Financial Planner Board of Standards recently lopped $100 off the $595 price of its notoriously rigorous certification exam for applicants who were planning to take the test for a second time (or more). The board sent e-mails to thousands of people who had previously flunked the 10-hour test, offering the discount for the November session if they registered by Sept. 28. “Everybody loves a comeback,” the e-mail read. “Every four months people just like you pass the CFP certification exam: Re-Takers. At any given testing center, about a quarter of those sitting for the CFP exam are re-takers.”
It’s unclear if the promotion had an effect; CFP spokesman Daniel F. Drummond said registrations were still under way and a tally was unavailable. Not everyone warmed to the board’s offer, however. One anonymous message poster at Registered Rep.’s website was “shocked” at the board’s move. “Are the registrations for test takers so low that the (CFP) board is proactively soliciting? I have never heard an SRO doing this before. Pretty low class.” (Dear Reader, is it "low class"? What do you think?)
Registrations among re-takers are off a little less than 2 percent year over year, but Drummond says that wasn’t the reason the board decided to discount the test for return applicants (first-timers still pay the full price.) “One of the reasons is we certainly want more people to pass the exam. We hope the discount will encourage them to try again. As you well know, it’s a very tough test,” he said. “It’s not like if you get a $100 discount on the exam, you’re going to get 10 or 15 fewer questions. … In no way does giving a discount lessen the rigor of the test.”
The pass rate for people who re-take the exam historically is lower than the pass rate for those who take it once. CFP data show that 61 percent of those who took the July exam for the first time passed, compared to 41.2 percent of re-takers who passed. The total number of people who take the test has declined steadily since its peak of nearly 9,300 in 2006, although Drummond blames that more on a souring economy than on attitudes toward the exam itself; a similar drop happened in the early 1990s. The number of people actually obtaining the certification has risen from more than 49,000 at the end of 2005 to nearly 62,000 today. In addition to passing the exam, applicants for the certification must have a bachelor’s degree, three years of full-time relevant financial planning experience, and must meet the board’s ethical standards.
The discounted test price is a first for the board. Drummond couldn’t say whether the board will consider it again. “We know some people have been laid off. We know some companies have been cutting back on professional development programs,” he says. “One of the things we’re seeing is people are being laid off in financial services…. They’re looking for the certification to retool who they are and what they do.” Interest may indeed be warming up in the program; Eric B. Gordon, spokesman for The American College, says registrations for CFP coursework are up 18 percent this year.