The FPSC’s President tells WP how he reacted to the results and why the curriculums have been changed
The CFP and FPSC Level 1 exams both represent important landmarks in the careers of Canadian advisors. The FPSC Level 1 is the first exam on the path to the Certified Financial Planner certification and the CFP paper itself is the final step. After taking their exams in early June, 945 hopeful candidates received their results last week.
Of the 509 candidates who wrote the FPSC level 1 exam, 356 passed, making the overall pass rate 70%. Among the 509 test-takers, 401 were first-timers (of whom 74% passed) while 108 were resitting the exam (60% pass rate). The FPSC Level 1 certification is a prerequisite to obtain the CFP certification.
The CFP examination was taken by 436 candidates and the overall pass rate was 63%. The 325 first-time writers managed a 74% pass rate, while only 32% of those re-attempting the exam passed. “I was surprised when I first saw the CFP results, because there was a reduction in pass rate. But, when you break it down, the first time writer pass rate was in the low 70s and that’s where we would anticipate it to be,” says FPSC President and CEO Cary List.
“On the repeat writer side, the results of candidates who have previously failed do tend to fluctuate from administration to administration. The reality is that the more times you fail an exam, the more likely you are to fail the next time because, unfortunately, people don’t tend to change their study habits.”
In a conversation with WP in early June, List said that he expected fewer people to enter the industry in upcoming years as a result of tightened regulations and the closer scrutiny that advisors are under nowadays. However, the number of candidates who took recent exams does not indicate any sort of exodus. The value of the CFP designation was also reaffirmed.
“Our sense is that there is going to be a higher percentage of individuals in the industry who pursue the CFP designation,” List says. “Although we think the number of people in the industry may indeed shrink over the next few years, we now have a bigger pool of people with level 1 certificates and the message we’re seeing is that the vast majority of those people still want their CFP.”
Both industry exams have undergone significant changes in recent years. On the curriculum side, the FPSC has introduced a ‘Capstone Course’, which requires candidate to study how all of the component pieces – investments, insurance, taxation, financial management, and estate planning – integrate with one another in complex case-study scenarios.
“That integration is a hugely important part of the distinction between financial planning and siloed financial advice and we think that is critically important to the consumer,” List says. “When they see a consumer, advisors should be looking at them as a whole human being not just a one-off. It’s like when you go to your family doctor with pain in your chest, your doctor does not just prescribe a couple of aspirin – they look at the whole picture.”
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