The CFP® certification process, administered by CFP Board, identifies to the public that those individuals who have been authorized to use the CFP® certification marks in the U.S. have met rigorous professional standards and have agreed to adhere to the principles of integrity, objectivity, competence, fairness, confidentiality, professionalism and diligence when dealing with clients. Why CFP® Certification Matters.
CFP® Certification Process
Certified Financial Planner (CFP®) professionals must pass the comprehensive CFP® Certification Examination, pass CFP Board’s Fitness Standards for Candidates and Registrants, agree to abide by CFP Board’s Code of Ethics and Professional Responsibility and Rules of Conduct which put clients’ interests first and comply with the Financial Planning Practice Standards which spell out what clients should be able to reasonably expect from the financial planning engagement. CFP® Financial Planning Process.
Education Requirements for CFP®
A CFP® professional must master nearly 100 integrated financial planning topics, ranging from:
- Investments
- Retirement planning
- Income tax planning
- Risk management
- Insurance
- Estate planning
- Employee benefits
In addition to completing a comprehensive financial planning curriculum approved by the CFP Board, or equivalent academic coursework, CFP® professionals are required to complete continuing education coursework, including a CFP Board-approved code of ethics course, to ensure their competence in financial planning.
CFP® Certification Examination
CFP® practitioners must pass a comprehensive two-day, 10-hour CFP® Certification Examination that test their ability to apply financial planning knowledge in an integrated format. Based on regular research of what planners do, the exam covers:
- Establishing and defining the Client-Planner relationship
- Gathering information necessary to fulfill the engagement
- Analyzing and evaluating the clients current financial status
- Developing recommendations
- Communicating recommendations
- Implementing recommendations
- Monitoring the recommendations
- Practicing within professional and regulatory standards
Experience Requirements for CFP® Professionals
A CFP® professional must have a minimum of three years experience in the personal financial planning process prior to earning the right to use the CFP® certification marks. As a result, CFP® practitioners possess financial counseling skills in addition to financial planning knowledge.
Ethics
As a final step to certification, CFP® practitioners agree to abide by a strict code of professional conduct, known as CFP Board’s Code of Ethics and Professional Responsibility, that sets forth their ethical responsibilities to the public, clients and employers. CFP Board also performs a background check during this process, and each individual must disclose any investigations or legal proceedings related to their professional or business conduct.
To verify that your planner is authorized by CFP Board to use the CFP® certification marks and to learn more about financial planning, visit letsmakeaplan.org or call toll-free 800-487-1497.
Frequently Asked Questions
1. What is a Certified Financial Planner (CFP®)?
A Certified Financial Planner (CFP®) is a financial professional who has completed rigorous education, examination, experience, and ethics requirements established by the CFP Board. As a result, CFP® professionals are qualified to provide comprehensive financial planning that includes retirement planning, investment guidance, tax strategies, insurance analysis, and estate planning.
2. Is a CFP® the same as a financial advisor?
Not exactly. While all CFP® professionals are financial advisors, not all financial advisors are CFP® professionals. In addition, CFP® professionals must meet strict certification requirements and adhere to a professional code of ethics. Therefore, many investors prefer working with a CFP® for more comprehensive and structured financial planning.
3. Why should I work with a Certified Financial Planner?
Working with a CFP® can help you build a more coordinated financial plan. For example, a CFP® considers how investments, taxes, retirement income, and long-term goals all work together. Consequently, this holistic approach often helps clients make more informed financial decisions and stay aligned with their long-term objectives.
4. Are Certified Financial Planners required to act as fiduciaries?
Yes, CFP® professionals are held to fiduciary standards when providing financial planning services. This means they are required to act in their clients’ best interests. As a result, recommendations must prioritize the client’s goals, financial situation, and long-term success rather than the advisor’s compensation or interests.
5. How do I verify if someone is a real CFP® professional?
You can verify a CFP® professional through the official CFP Board verification database. In addition, you should confirm their credentials, ask about their experience, and review how they are compensated. Therefore, taking these steps helps ensure you are working with a properly certified and qualified financial planner.
