United States
Hong KongGeneral Principles: 15%, and the domain everything else attaches to
Fifteen per cent of the exam, about 25 of the 170 questions on our derived counts. It covers the planning process, financial statements and cash flow, budgeting, debt, education funding, economic concepts and time value of money.
Third largest domain, and the one that supplies the machinery every other domain uses.
Time value of money appears here and then again in investment, retirement and education questions. The financial statements appear wherever a case study describes a client.
What is in it
- The financial planning process and the client relationship.
- The statement of financial position, and the cash flow statement.
- Budgeting, emergency funds and savings strategies.
- Debt management, refinancing and financing strategies.
- Education planning and funding vehicles.
- Economic concepts - business cycles, inflation, interest rates, monetary and fiscal policy.
- Time value of money applications.
- Financial institutions, consumer protection and bankruptcy.
Why it is worth front-loading
Because the case studies assume it. Read the statements first.
A case study hands you a client's assets, liabilities, income and expenses and asks a retirement question. If you cannot read a statement of financial position quickly, the retirement knowledge does not help.
Emergency fund adequacy, debt-to-income, housing cost ratio, savings rate. None is difficult, and questions frequently hinge on computing one from a client summary and comparing it against a rule of thumb.
Time value of money
The single most transferable skill on the exam. Present value, future value, annuities, uneven cash flows, and solving for the rate or the period.
Practice on your own calculator until the keystrokes are automatic. Fumbling them costs minutes you priced into case studies, and it is one of the few genuinely mechanical things you can eliminate before the day.
Economics is lightly tested and easy
Business cycle phases, the effect of monetary and fiscal policy, the relationship between interest rates and bond prices, real versus nominal returns, and the yield curve. Recognition, not modeling.
Conceptual rather than quantitative, and worth an hour rather than a week.
Where the judgment questions live
Prioritization. A client with credit card debt, no emergency fund, an unmatched employer contribution and a college savings goal - what comes first?
Capture the employer match, address high-interest debt, build the emergency fund, then longer-term goals. The exam wants a defensible ordering rather than a single correct action, and the reasoning is what you are being marked on.
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Common questions
How much of the CFP exam is General Principles?
Fifteen per cent, about 25 of the 170 questions on our derived counts. CFP Board publishes weightings rather than per-domain question numbers.
Why study this domain first?
Because case studies assume it. They hand you assets, liabilities, income and expenses and ask a retirement or tax question, and reading a statement of financial position quickly is the prerequisite.
What is the most transferable skill here?
Time value of money. It appears in investment, retirement, education and estate questions, and fluency with your own calculator saves minutes across the whole paper.
How much economics is tested?
Lightly and conceptually - business cycle phases, monetary and fiscal policy, interest rates and bond prices, real versus nominal returns, the yield curve. An hour rather than a week.
How do prioritization questions work?
They give a client with several competing needs and ask what comes first. Capture an employer match, address high-interest debt, build the emergency fund, then longer-term goals - with the reasoning being what is marked.