The Importance of the CFP®

When selecting a financial planner, you need to feel confident that the person you choose to help you map out a financial plan has demonstrated their proficiency with the complexities of investments, insurance and taxes. The CFP Board of Standards created the CERTIFIED FINANCIAL PLANNER™ or CFP® designation to aid consumers in selecting a financial planning professional. Before a planner can use the CFP® mark, they must meet the following five rigid requirements.

1. Education

Candidates must acquire theoretical and practical financial planning expertise by completing a comprehensive course of study at a college or university offering a financial planning curriculum registered with the CFP Board of Standards. In addition, CFP® candidates must earn a bachelor’s degree from an accredited college or university.

2. Experience

Before granting the right to use the CFP® mark, the CFP Board requires a minimum of three years’ experience in the financial planning profession. This requirement assures that CFP® practitioners possess financial counseling skills in addition to financial planning knowledge.

3. Examination

In order to use the CFP® mark, candidates must pass a very rigorous examination that tests their ability to apply financial planning knowledge in an integrated format. The CFP Board’s exam covers the financial planning process, tax planning, employee benefits, retirement planning, estate planning, investments and insurance.

4. Ethics

As a final step to certification, CFP® professionals agree to abide by a strict code of professional conduct, known as the CFP Board’s Code of Ethics and Professional Responsibility that clearly defines the ethical responsibilities that a CFP® has to the public and their clients. A CFP® is required to provide their clients with information about their source of compensation and declare any conflicts of interest in writing.

5. Continuing Education

Once certified, CFP® professionals are required to maintain technical competence. Every two years, they must complete a minimum of 30 hours of continuing education, staying current with developments in the financial planning profession. Part of this education must address matters related to ethics and practice standards.

A Final Thought

Most people think that all financial planners are "certified," but this isn’t true. Anyone can call himself or herself a "financial planner." Only those who have fulfilled the certification and renewal requirements of the CFP Board can display the CFP® certification marks. When selecting a financial planner, you need to feel confident that the person you choose to help you plan for your future is competent and ethical. The CFP® certification provides that sense of security by allowing only those who meet the requirements the right to use the CFP® certification marks.


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