CFP

Certified Financial Planner® or CFP®

 

 

The Certified Finacial Planner (CFP) designation is a certification mark for financial planners conferred by the Certified Financial Planner Board of Standards. To receive authorization to use the designation, the candidate must meet education, examination, experience and ethics requirements, and pay an ongoing certification fee. 

Education requirements 

To earn a CFP designation, candidates must meet several requirements — the first of which is the “educational requirement,” which requires candidates to have a bachelor’s degree or higher from an accredited U.S. college or university.  As a first step to the present CFP certification criteria, students must master a list of nearly 100 topics on integrated financial planning.  The topics cover major planning areas such as:

  • General principles of finance and financial planning
  • Insurance planning
  • Employee Benefits planning
  • Investment and Securities planning
  • State and Federal Income Tax planning
  • Estate Tax, Gift Tax, and Transfer Tax planning
  • Asset Protection planning
  • Retirement planning
  • Estate planning

To master “The Education Requirement,” students are now required to have at least a bachelor’s degree from a regionally accredited U.S. college or university plus additional course training in the above listed topic areas in order to meet the first requirement to sit for the 10 hour examination. A few exceptions to the education requirement exist for a limited number of professionals, including licensed attorneys (i.e., juris doctor holders who are duly licensed with their state bar association(s)), certified public accountants (CPAs), chartered financial analysts (CFA charterholders), and persons holding doctoral degrees in business, finance, accounting, or economics.

International degrees may be substituted for a U.S. degree if they receive equivalency from a third-party organization.

CFP Certification Examination

The CFP Certification Examination is a 10-hour multiple choice exam, divided into one four-hour session (Friday afternoon) and two three-hour sessions (Saturday). The exam includes three major case problems and is designed to assess the student’s ability to apply his or her knowledge of the aforementioned areas to financial planning situations. The exam was set as a requirement in 1993 and at that time CFPs were grandfathered without having to pass this exam. 

Individuals holding professional designations pre-approved by the CFP Board (like PhDs in business and economics, attorneys, Certified Public Accountants (CPA), Chartered Certified Accountants (ACCA), Chartered Accountants (CA), Chartered Wealth Managers (AAFM) ), and Chartered Financial Analysts (CFA) are entitled to register for and take the exam without having to complete the education requirements by using the CFP-board’s challenge status. 

Work experience

After passing the examination, the candidate must demonstrate to have exempt and extensive experience in the financial planning field. The CFP Board defines work experience as “the supervision, direct support, teaching or personal delivery of all or part of the personal financial planning process to a client” and such experience must fall within one or more of the following six primary elements of financial planning:

  • Establishing and Defining the Client Relationship
  • Gathering Client Data and Goals
  • Analyzing and Evaluating the Client’s Financial Status
  • Developing and Presenting Financial Planning Recommendations and Alternatives
  • Implementing the Financial Planning Recommendations
  • Monitoring the Financial Planning Recommendations

Even after the student passes the exam and meets one or more of the six primary elements of financial planning, he or she must also have completed the following:

  • Three years full-time or equivalent (2,000 hours per year) part-time experience in the financial planning field
  • Be approved by the CFP Board during initial certification, which also involves an extensive background check — including an ethics, character and criminal check.

Ethics and Continuing Education

The final components are the ethics and continuing education requirements. Students and certificants are required to adhere to the CFP Board Code of Ethics and Professional Responsibility and to the Financial Planning Practice Standards. The CFP Board has the right to enforce them through its Disciplinary Rules and Procedures. 

To maintain certification, license holders are also required to complete certain continuing education requirements on an on-going basis in addition to paying a licensing fee every two years.

Brochures

CFP Board has developed brochures that provide information about financial planning and guidance for those seeking a competent and ethical financial planning professional. From “What You Should Know About Financial Planning” to “Why You Should Choose a CERTIFIED FINANCIAL PLANNER™ Practitioner” to “Your Rights as a Financial Planning Client,” these brochures are available for download below in pdf format.
 
CFP Board is happy to provide individuals one free complimentary Financial Planning Resource Kit, which contains educational brochures such as “What You Should Know About Financial Planning,” “10 Questions to ask When Choosing a Financial Planner” and “Your Rights as a Financial Planning Client.” To request that a Financial Planning Resource Kit be mailed to you, complete a request form