What is a 'Certified Financial Planner - CFP'

A certified financial planner (CFP) refers to the certification owned and awarded by the Certified Financial Planner Board of Standards, Inc. The CFP designation is awarded to individuals who successfully complete the CFP Board's initial and ongoing certification requirements. Individuals desiring to become a CFP professional must take extensive exams in the areas of financial planning, taxes, insurance, estate planning and retirement.

BREAKING DOWN 'Certified Financial Planner - CFP'

Attaining the CFP designation takes experience and a substantial amount of work. CFP professionals must also complete continuing education programs each year to maintain their certification status.

How to Obtain the Certified Financial Planner Designation

A candidate aiming to earn the CFP must meet requirements in four categories: education, CFP exam, work experience and ethics. The education requirements contain two major components. First, the candidate must verify that he holds a bachelor's degree or higher from an accredited university or college recognized by the U.S. Department of Education. Second, completion of a list of specific coursework in financial planning is required by the CFP Board. Most of this second requirement, besides the capstone course, may be bypassed if the candidate holds one of many accepted financial designations, such as CFA, CPA or a higher degree in business.

All candidates are required to pass the CFP exam, which is a computer-based exam taken by candidates over a three-day period. The exam is 170 multiple choice questions, which include stand-alone questions as well as item-set-style questions. The exam topic weights change regularly but include areas such as professional conduct and regulations, financial planning principles, education planning, risk management, insurance, investments, tax planning, retirement planning, and estate planning. The candidate is tested in these areas as well as his ability to establish client-planner relationships, gathering information, analysis, and developing, communicating, implementing and monitoring recommendations.

As for professional experience, candidates must prove that they have at least three years of full-time professional experience in the industry, or two years of apprenticeship in the industry, which is subject to further individualized requirements. Lastly, the ethics requirements, candidates and CFP holders must adhere to the CFP Board's standards of professional conduct and regularly disclose information about their involvement in a variety of areas, such as criminal activity, government agency inquiries, bankruptcies, customer complaints or terminations by employers. Also, the CFP Board conducts extensive background checks on all candidates. Earning the CFP exam depends on all the above requirements; however, the CFP Board has final discretion on whether to award the designation to an individual or not.

  1. Financial Planner

    A financial planner is a qualified money-management professional ...
  2. Chartered Financial Analyst - CFA

    A professional designation given by the CFA Institute (formerly ...
  3. CFP Franc - XPF

    The currency of four French overseas collectivities that include ...
  4. Series 65

    A securities license required by most U.S. states for individuals ...
  5. Certified Credit Executive - CCE

    Certified Credit Executive (CCE) refers to a designation issued ...
  6. Personal Financial Specialist - ...

    Personal Financial Specialist is a specialty credential for CPAs ...
Related Articles
  1. Financial Advisor

    The CFP Board: Its Role and Mission

    The Certified Financial Planner Board of Standards promotes standards and ethics in financial planning and enforces CFP certification requirements.
  2. Financial Advisor

    The Top 3 Financial Advisor Credentials

    An overview of the top three credentials for financial advisors and what they require.
  3. Financial Advisor

    The Best Training Programs For CFP Exams

    The competition to become a financial planner is hot, and growing hotter. Find out the best way to preparing to land the CFP designation.
  4. Financial Advisor

    The Basics Of CFP Designation Maintenance

    The workload doesn't end with your exam. Find out how to keep up your CFP credential.
  5. Personal Finance

    The CFP Board’s Proposed Changes Explained

    The CFP Board has released proposed revisions to its standards of professional conduct.
  6. Personal Finance

    Studying For The CFP Exam

    Learn the tips and tricks of the trade before heading into this test.
  7. Personal Finance

    Financial Planner: Career Path & Qualifications

    Learn what education and certifications you need to become a financial planner, as well as the future prospects and earnings potential for financial planners.
  8. Personal Finance

    Is Your CFP a Fiduciary Advisor?

    Not all CFPs operate as fiduciaries. Here's how to tell the difference.
  9. Personal Finance

    3 Questions to Ask Potential Financial Advisors

    Your financial advisor is a key component to having enough retirement income, so find the right one.
  10. Personal Finance

    You Can’t Afford Not to Hire a Certified Financial Planner

    Fees charged by financial planners may seem high, but they will increase your wealth.
  1. Where can I look for a financial planner?

    References from trusted friends or family members can help you find a financial planner; however, keep in mind that your ... Read Answer >>
Hot Definitions
  1. Standard Deviation

    A measure of the dispersion of a set of data from its mean, calculated as the square root of the variance. The more spread ...
  2. Entrepreneur

    An Entrepreneur is an individual who founds and runs a small business and assumes all the risk and reward of the venture. ...
  3. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
  4. Perfect Competition

    Pure or perfect competition is a theoretical market structure in which a number of criteria such as perfect information and ...
  5. Compound Interest

    Compound Interest is interest calculated on the initial principal and also on the accumulated interest of previous periods ...
  6. Income Statement

    A financial statement that measures a company's financial performance over a specific accounting period. Financial performance ...
Trading Center