CFP® — CFP Board CFP Companion Prep Exam Blueprint

How to Use This Exam Blueprint

Use this checklist as a practical review map for CFP Board CFP Companion Prep with exam code CFP®. It is designed to help you decide what to review, what to practice, and what “ready” should look like in applied financial planning scenarios.

Work through it in three passes:

1. Map coverage: Mark each topic area as strong, partial, or weak.
2. Test application: Use the “Can you do this?” prompts to check whether you can apply rules to client facts.
3. Prioritize final review: Spend final study time on weak areas that affect integrated recommendations, ethics, taxation, retirement, insurance, and estate outcomes.

This page is independent exam-blueprint support and does not claim affiliation with CFP Board.

Exam identity and readiness target

Topic-area readiness table

Can you do this?

Use these prompts as a readiness check. If you cannot answer confidently without looking up the concept, mark the topic for review.

Client facts and planning process

• Identify the client’s stated goals, implied goals, constraints, time horizon, liquidity needs, and risk concerns.
• Separate facts from assumptions.
• Identify what information is missing before making a recommendation.
• Determine whether the proper next step is data gathering, analysis, recommendation, implementation, monitoring, or documentation.
• Prioritize recommendations when the client cannot do everything at once.
• Explain why a recommendation fits the client’s full situation rather than one isolated objective.
• Recognize when a product recommendation is premature.
• Convert narrative facts into a balance sheet, cash flow statement, insurance inventory, investment summary, retirement profile, or estate snapshot.

Ethics, conduct, and client-first judgment

• Spot conflicts involving compensation, referrals, family relationships, outside business activity, product incentives, or dual roles.
• Decide when disclosure alone is not enough and when mitigation, consent, supervision, or withdrawal may be needed.
• Recognize confidentiality issues involving spouses, adult children, business partners, employers, and other advisers.
• Distinguish negligence, misrepresentation, omission, unsuitable advice, and unauthorized action.
• Identify when documentation is the best protection for both client and planner.
• Choose the answer that preserves objectivity when the client wants an aggressive, incomplete, or misleading action.
• Apply a fiduciary-minded process to recommendations, monitoring, and conflicts.

General planning and cash-flow analysis

• Calculate and interpret net worth.
• Identify whether a client has a liquidity problem, debt problem, spending problem, income problem, or asset allocation problem.
• Compare emergency reserve needs across single-income, dual-income, self-employed, retired, and variable-income clients.
• Recognize when debt repayment should outrank investing.
• Distinguish good cash flow from adequate wealth accumulation.
• Evaluate savings capacity for retirement, education, insurance premiums, debt repayment, and estate liquidity.
• Identify planning concerns when assets are illiquid, concentrated, pledged, jointly owned, or tax-inefficient.

Insurance and risk management

• Match the risk to the correct insurance type.
• Calculate a broad insurance need using survivor needs, debts, education goals, income replacement, available resources, and existing coverage.
• Distinguish term life, permanent life, disability income, long-term care, health, property, casualty, liability, and annuity functions.
• Identify when the problem is coverage amount, policy type, ownership, beneficiary, exclusions, affordability, or coordination with employer benefits.
• Explain why a young family, business owner, retiree, or high-net-worth client may need different risk solutions.
• Recognize tax and estate implications of ownership and beneficiary choices without overgeneralizing.
• Identify underinsurance and overinsurance in scenario form.

Investment planning

• Explain risk tolerance, risk capacity, required return, time horizon, liquidity needs, tax status, and constraints.
• Distinguish systematic risk, unsystematic risk, inflation risk, interest-rate risk, credit risk, liquidity risk, reinvestment risk, and sequence risk.
• Interpret diversification, correlation, standard deviation, beta, alpha, Sharpe-type comparisons, and portfolio rebalancing at a planning level.
• Explain the inverse relationship between bond prices and interest rates.
• Compare equity, fixed income, cash, real assets, pooled investments, and basic derivative uses.
• Select asset location strategies based on tax treatment and investment characteristics.
• Identify when concentrated stock, employer stock, inherited assets, low-basis assets, or emotional attachment creates planning risk.
• Evaluate whether a portfolio fits the client rather than whether an investment is “good” in isolation.

Tax planning

• Distinguish marginal rate, effective rate, average rate, and capital gains treatment.
• Track basis, holding period, character of income, and timing.
• Explain deductions, credits, exclusions, deferrals, and adjustments in practical terms.
• Identify tax consequences of selling appreciated property, harvesting losses, exercising compensation-related benefits, taking retirement distributions, or gifting assets.
• Recognize when the tax answer depends on ownership, entity type, account type, or beneficiary.
• Compare taxable, tax-deferred, and tax-free treatment conceptually.
• Avoid recommending a transaction solely for tax savings when it harms the overall plan.

Retirement planning

• Evaluate accumulation needs using time horizon, expected savings, employer benefits, risk level, inflation, and tax treatment.
• Compare employer plans, individual retirement arrangements, deferred compensation concepts, and taxable savings roles.
• Identify rollover considerations: fees, services, investment options, tax treatment, creditor protection concepts, required distributions, and beneficiary planning.
• Recognize distribution planning issues: longevity risk, inflation risk, sequence risk, tax bracket management, liquidity, and beneficiary coordination.
• Explain how retirement planning interacts with insurance, estate planning, cash flow, and investment allocation.
• Identify when a client’s retirement goal is unrealistic without increased savings, reduced spending, delayed retirement, higher risk, or revised goals.
• Know where current-law limits, ages, and phaseouts matter, and verify current figures during study rather than relying on stale numbers.

Estate planning

• Distinguish probate transfers, nonprobate transfers, beneficiary designations, joint ownership, trust ownership, and lifetime gifts.
• Identify who controls property during life, at incapacity, and at death.
• Recognize when wills, trusts, powers of attorney, health care directives, guardianship planning, and beneficiary updates may be needed.
• Explain common reasons for trusts: control, privacy, incapacity planning, minor beneficiaries, blended families, spendthrift protection, charitable goals, or tax planning.
• Identify estate liquidity issues, especially with business interests, real estate, farm/ranch assets, or illiquid concentrated wealth.
• Coordinate estate planning with insurance ownership, retirement beneficiaries, tax basis issues, and family dynamics.
• Avoid assuming the will controls assets that pass by beneficiary designation or title.

Formula and calculation readiness

You do not need to turn the exam into a math contest, but you should be comfortable using core planning formulas, financial calculator inputs, and interpretation. The key is not just computing a number; it is explaining what the number means for the recommendation.

Core formulas to know and interpret

\[ \text{Net worth} = \text{Total assets} - \text{Total liabilities} \]\[ \text{Emergency reserve months} = \frac{\text{Liquid reserves}}{\text{Monthly essential expenses}} \]\[ \text{Debt-to-income ratio} = \frac{\text{Recurring monthly debt payments}}{\text{Gross monthly income}} \]\[ FV = PV(1+r)^n \]\[ PV = \frac{FV}{(1+r)^n} \]\[ \text{Insurance need} = \text{Present value of future needs} + \text{Immediate obligations} - \text{Available resources} - \text{Existing coverage} \]\[ r_{\text{after-tax}} = r_{\text{pre-tax}} \times (1-t) \]\[ r_{\text{real}} \approx r_{\text{nominal}} - \pi \]\[ \text{Holding period return} = \frac{\text{Ending value} - \text{Beginning value} + \text{Income}}{\text{Beginning value}} \]\[ \text{Taxable equivalent yield} = \frac{\text{Tax-exempt yield}}{1-\text{Marginal tax rate}} \]\[ \%\Delta P \approx -D_{\text{mod}} \times \Delta y \]

Calculation checklist

Scenario and decision-point checks

Detailed exam blueprint

Financial planning process and integrated advice

• Understand each stage of the planning engagement and what evidence supports it.
• Know how to move from client goals to measurable planning objectives.
• Identify assumptions that must be stated before calculations are meaningful.
• Recognize conflicts among goals, such as early retirement, private education, debt payoff, high lifestyle spending, and low risk tolerance.
• Know when a recommendation requires coordination with tax, legal, insurance, or investment professionals.
• Be able to rank recommendations by urgency: legal risk, insurance gap, liquidity crisis, tax deadline, retirement shortfall, or estate issue.
• Practice explaining why “do nothing” may be inappropriate when the client faces measurable risk.
• Practice explaining why “do everything immediately” may be impractical when cash flow is constrained.

Ethics, standards, and professional responsibility

• Review duties owed to clients in planning, advice, implementation, monitoring, and communication.
• Identify conflicts of interest in compensation, referrals, proprietary products, family relationships, and outside business arrangements.
• Know how to respond to client requests involving concealment, misstatement, tax evasion, misuse of confidential information, or unauthorized trades.
• Distinguish disclosure, informed consent, mitigation, documentation, and withdrawal.
• Recognize when confidentiality may conflict with family, legal, or professional obligations.
• Understand why documentation matters when recommendations are declined.
• Practice choosing the most ethical answer when multiple answers seem financially plausible.
• Watch for exam choices that are technically profitable but procedurally or ethically weak.

General financial planning, budgeting, and education planning

• Build a household net worth statement from scenario facts.
• Build a simple cash-flow analysis from income, taxes, expenses, debt, and savings.
• Identify emergency reserve adequacy based on job stability, dependents, insurance, and liquidity.
• Compare debt repayment, refinancing, consolidation, and savings strategies conceptually.
• Recognize when a client’s education funding goal conflicts with retirement readiness.
• Compare education funding vehicles by ownership, tax treatment, flexibility, control, and financial aid considerations at a conceptual level.
• Identify planning issues for divorce, remarriage, dependent care, aging parents, special needs, and variable income.
• Understand how inflation affects future education, retirement, and insurance needs.

Risk management and insurance planning

• Know the planning purpose of life insurance: income replacement, debt payoff, estate liquidity, business continuity, charitable goals, or legacy planning.
• Distinguish temporary from permanent insurance needs.
• Compare term and permanent life insurance without assuming one is always better.
• Identify disability income risk for high earners, single-income households, business owners, and clients with specialized occupations.
• Review health insurance coordination, deductibles, out-of-pocket exposure, employer benefits, and continuation issues conceptually.
• Review long-term care risk and how it affects retirement assets, family caregivers, and estate goals.
• Identify property/casualty gaps: homeowners, auto, umbrella liability, professional liability, business property, and personal property coverage.
• Understand policy ownership, beneficiary designations, premium affordability, underwriting, exclusions, riders, and replacement concerns.
• Coordinate insurance with tax, estate, retirement, and business planning.

Investment planning

• Classify investments by risk, expected return, income, liquidity, tax characteristics, and role in the portfolio.
• Understand diversification across asset classes, sectors, geography, account types, and time horizons.
• Identify risk tolerance versus risk capacity and explain why they can differ.
• Know when a client’s required return is unrealistic for their risk tolerance.
• Interpret portfolio statistics conceptually: standard deviation, beta, correlation, duration, yield, total return, and benchmark comparison.
• Review bond concepts: coupon, maturity, yield, duration, credit quality, call risk, reinvestment risk, and price sensitivity.
• Review equity concepts: dividends, growth, value, market capitalization, concentration, and valuation basics.
• Review pooled investments: mutual funds, ETFs, closed-end funds, separately managed accounts, and expenses at a planning level.
• Understand basic option purposes: hedging, income, speculation, leverage, and risk control.
• Identify tax-efficient investing considerations: turnover, asset location, loss harvesting, municipal interest concepts, and capital gain timing.
• Practice rebalancing decisions when markets move, taxes matter, and client risk has changed.

Tax planning

• Distinguish taxable income, adjusted income concepts, deductions, credits, exclusions, deferrals, and basis.
• Identify character of income: ordinary income, capital gain/loss, qualified or preferential income concepts, tax-exempt income, and tax-deferred growth.
• Track basis in securities, gifts, inheritances, business interests, residence transactions, and retirement accounts at a conceptual level.
• Recognize timing strategies: accelerate income, defer income, accelerate deductions, bunch deductions, harvest losses, or realize gains.
• Understand tax consequences of retirement contributions, distributions, conversions, rollovers, and beneficiary distributions conceptually.
• Review taxation of insurance products, annuities, employee benefits, business entities, and investment income at a planning level.
• Identify tax traps involving wash sale concepts, holding periods, constructive receipt, early distributions, and ownership changes.
• Practice explaining tax recommendations in plain English: what changes, when it changes, and why it helps or hurts.

Retirement planning and employee benefits

• Identify retirement goals, time horizon, spending needs, income sources, inflation assumptions, and risk tolerance.
• Compare defined contribution, defined benefit, individual retirement, deferred compensation, and taxable savings roles conceptually.
• Understand employer matching, vesting concepts, plan loans, rollovers, beneficiary designations, and distribution rules at a planning level.
• Recognize when current-law limits, contribution rules, distribution timing, and eligibility rules must be verified for the exam period.
• Evaluate Social Security and Medicare planning concepts without relying only on memorized ages or dollar amounts.
• Address retirement income risks: longevity, inflation, market volatility, sequence of returns, tax uncertainty, health costs, and long-term care.
• Compare withdrawal sequencing across taxable, tax-deferred, and tax-favored accounts conceptually.
• Identify when annuities may address longevity or income risk and when they create liquidity, cost, or complexity concerns.
• Coordinate retirement planning with estate beneficiaries, spousal needs, insurance coverage, and tax bracket management.

Estate planning and wealth transfer

• Identify property ownership: individual, joint, community-property concepts where relevant, trust, entity, retirement account, and beneficiary designation.
• Distinguish probate and nonprobate transfers.
• Recognize when a will is necessary but not sufficient.
• Understand the planning role of revocable trusts, irrevocable trusts, testamentary trusts, special needs planning, charitable strategies, and life insurance trusts at a conceptual level.
• Review incapacity planning: durable powers, health care directives, guardianship, trustee authority, and account access.
• Identify beneficiary problems: outdated designations, minors, ex-spouses, special needs beneficiaries, spendthrift concerns, and unequal family expectations.
• Understand gift and estate tax concepts without assuming exact exemption amounts unless provided in study materials.
• Review basis and tax consequences of lifetime gifts versus transfers at death conceptually.
• Coordinate estate planning with business succession, retirement accounts, life insurance, real estate, and family governance.

Business owner and closely held business planning

• Identify entity-related issues: liability, taxation, control, succession, compensation, benefits, and continuity.
• Review buy-sell agreements and funding methods at a planning level.
• Distinguish key-person insurance, disability buyout, business overhead expense coverage, and personal insurance.
• Identify business valuation, liquidity, tax, and family transition issues.
• Recognize when business and personal finances are improperly mixed.
• Coordinate owner retirement planning with cash flow, entity structure, employee benefits, and estate planning.
• Practice scenarios where the owner is both client, employer, shareholder, insured, and estate planning subject.

Common weak areas and traps

Readiness self-score

Rate each area from 0 to 2.

Final-week checklist

Use the final week to tighten application, not to reread everything passively.

• Build a one-page weak-area list from missed questions.
• Rework missed questions without looking at the explanation first.
• For every miss, label the cause: knowledge gap, misread fact, calculation error, ethics trap, or poor prioritization.
• Review ethics and conduct scenarios daily; they affect answer choice even when the topic appears financial.
• Drill formulas and calculator workflows you actually expect to use.
• Review tax vocabulary: basis, character, timing, deduction, credit, exclusion, deferral, marginal rate, and effective rate.
• Review retirement account and employee benefit concepts with current study materials for any current-law figures.
• Review estate transfer mechanics: title, beneficiary, will, trust, probate, incapacity, and liquidity.
• Practice at least a few integrated cases that combine tax, investment, insurance, retirement, and estate facts.
• Make a short “before I answer” checklist: goal, constraint, missing fact, tax effect, risk effect, ethics issue.
• Stop chasing obscure details if core scenario judgment is still weak.
• Enter exam day ready to choose the best planning answer, not merely the answer that sounds familiar.

Practical next step

Pick your two lowest-scoring areas from the self-score table and complete a mixed practice set focused on those topics. After each question, write one sentence explaining why the correct answer is better than the strongest distractor. That habit builds the scenario judgment needed for CFP Board CFP Companion Prep (CFP®) review.