In Practice December 10, 2024

CFP Board Reports Record CFP Exam Participation in 2024

Among the 10,437 candidates testing this year, 6,763 candidates passed.

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The CFP Board announced a record year for its Certified Financial Planner certification exam, with 10,437 candidates testing in 2024, the highest annual total documented to date. Among those who tested, 6,763 candidates passed, up 11% from 2023, which anointed 6,089 new CFP professionals.

The number of test takers has grown steadily since the CFP’s new exam blueprint deployed in March 2022, which shifted some question areas and added others such as the psychology of financial planning.

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In addition, the CFP Board reported that pass rates have remained stable since March 2022. First-time test-takers consistently outperformed repeat test-takers.

November 2024 Exam Highlights

The November 2024 CFP certification exam was held from November 6 through 13, with 3,755 candidates participating, 6% of whom tested remotely. According to the CFP, this marked the second-largest turnout for a November exam. The pass rate for the November exam was 62%.

A post-exam survey revealed the primary motivations for pursuing CFP certification:

  • 38% cited demonstrating expertise in their roles; and
  • 34% sought to distinguish themselves as fiduciaries.

Employer support played a crucial role for many candidates, with 33% reported receiving financial assistance from their workplace during the certification process.

Demographics of the November cohort highlighted the profession’s youth movement:

The 10 states with the most test-takers included the country’s four most populous: California, Texas, Florida and New York, with these states accounting for 1,957 test-takers.

“Record-breaking CFP exam participation highlights the growing demand for CFP certification as the standard in financial planning,” CFP Board CEO Kevin Keller said in a statement. “This milestone reflects wide recognition of the value of competent, ethical financial advice. We celebrate the commitment of all those who sat for the exam and welcome these future CFP professionals into our dedicated community.”

Compliance December 10, 2024

IRS Reminds Retirees to Take RMDs Before Year-End

Those aged 73 and older must take their required minimum distribution from defined contribution plans and IRAs.

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The IRS on Tuesday issued a reminder to those aged at least 73 to take their required minimum distributions from defined contribution and individual retirement accounts before the end of the year or face monetary penalties.

Retirement plan and IRA owners must make the annual withdrawal, which is considered taxable income, and may incur penalties if they do not, the IRS warned.

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If an account holder does not withdraw the full amount by December 31, the holder is subject to a 25% excise tax on the amount not withdrawn; that 25% excise tax rate is reduced to 10% if the error is corrected within two years. 

The regulator also alerted participants and advisers to RMD changes stemming from the SECURE 2.0 Act of 2022. That legislation raised the age that account owners must begin taking RMDs to 73 from 72 as of 2023, while eliminating RMDs for designated Roth accounts in 401(k) and 403(b) retirement plans. The RMD age will be raised again to age 75 in 2033.

This year, the minimum distribution rules generally apply for account holders and beneficiaries of: 

  • Traditional IRAs and IRA-based plans, even if the person is still employed;
  • Employer-sponsored plans, with delays allowed until retirement unless the participants own more than 5% of the sponsoring business; and
  • Roth IRA beneficiaries after the account owner’s death.

According to the IRS, the correct RMD amount must be provided (or an offer to calculate it must be made) by IRA trustees or plan administrators to the account owner, but the account holder will ultimately be held responsible for getting the amount correct.

Holders of multiple IRAs must calculate the RMD for each separately, but the total amount can be withdrawn from one or more accounts.

The IRS provides required minimum distribution worksheets to help calculate the amounts, as well as other tools and forms related to RMDs, at IRS.gov.

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