Some say schools need to do more to encourage students to get the certification.
A new study shows that the majority of college graduates who major in financial planning aren't sitting for the exam that would qualify them as certified financial planners, a trend that worries the organization that grants the CFP designation.
In a survey of 506 students who earned bachelor's and master's degrees in financial planning, 351 — or 69% — hadn't taken the certification test, according to the Certified Financial Planner Board of Standards Inc.
The study, conducted with San Diego State University and released at a CFP Board education conference in Washington recently, involved students at three state universities who graduated over a five-year period.
About a third of students who complete the CFP certificate program at DePaul University in Chicago opt not to take the CFP exam, according to Mike McCarthy, director of the school's Financial Education Center.
Often, they either never intended to take it or a career change to financial planner did not materialize.
“They found value [in the certificate], but they didn't sit for the test,” Mr. McCarthy said. “We're pretty direct about how hard [the test] is.”
About 6,000 people take the CFP exam annually. It has a 55% pass rate.
Charles Chaffin, director of academic programs and initiatives at the CFP Board, stressed that the results are based on three institutions and can't necessarily be generalized to all CFP-registered programs.
“This study is merely providing a basis for the CFP Board to work with partner institutions in developing more data that will ultimately help improve students' pathway to CFP certification,” he said in a statement.
Nonetheless, Kevin Keller, the CFP Board's chief executive, encourages financial planning educators to look beyond metrics such as enrollment, retention and graduation.
“We need your help in bringing your students through [to CFP certification],” he told about 155 people attending the conference. “My challenge to all of you is to increase the induction of your students.”
Nationally, there are 343 CFP Board-registered programs at 213 educational institutions, including 112 at the bachelor's level, 49 at the master's level, five at the doctoral level and 177 certificate programs.
Requirements for obtaining the CFP designation include obtaining a bachelor's degree in any field, passing the CFP exam and acquiring a certain amount of experience. Once the CFP is granted, the holder must follow ethical guidelines enforced by the CFP Board and earn continuing-education credits.
The CFP Board emphasizes education in its effort to make planning a recognized profession like medicine, law and accounting.
“We at the CFP Board are making a large, long-term bet on the emergence of the financial planning profession by investing in baccalaureate and master's programs,” Mr. Keller said.
The return on that investment decreases when students forgo the CFP exam and fail to add themselves to the roster of CFP mark holders, which now numbers about 68,000 in the United States.
Ron Rhoades, an assistant professor at Alfred State College and curriculum coordinator for its financial planning program, said schools need to do more to ensure that degree earners sit for the CFP exam.
In an effort to ignite interest in the profession, the CFP Board last week announced that it had entered into a verbal agreement with the University of Illinois to offer what is called a “massive open online course” in financial planning and financial literacy in 2014.
Such online courses, which typically are open to the public as well as students at the sponsoring institution, have drawn anywhere from thousands to more than 100,000 students.
Continuing ed
The CFP Board also has a proposal to provide its own continuing-education courses. That matter will be taken up by the board in November.
The CFP Board's move into education, however, worries Donald Trone, president of the Leadership Center for Investment Stewards. He said that as a credentialing organization, it should not be involved in sponsoring an education course. The CFP Board was originally established to certify and set standards for the CFP mark, he said.
If the CFP Board provides education, it can crowd out organizations such as Mr. Trone's.
“When they get involved with training ... they're inhibiting competition,” Mr. Trone said.
CFP Board spokesman Dan Drummond disputed Mr. Trone's assertion, saying that the organization's registered and continuing-education programs are “central” to maintaining the CFP designation. The Illinois online course is distinct from the continuing education required for renewal of the CFP mark.
“The two are completely separate issues,” he said. “In no way is the CFP Board inhibiting competition by either seeking to uphold our high standards for CE providers and sponsors or by educating the American public about financial planning.”
