Certified Financial Planner (CFP): Meaning, Certification Requirements
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What is a CFP?
A certified financial planner (CFP) is a financial advisor who holds one of the most rigorous certifications for financial planning knowledge. They must pass the CFP exam, have several years of experience related to financial planning and follow strict ethical standards set by the CFP Board of Standards.
Unlike other types of financial advisors, CFPs hold to a fiduciary standard. That means they must act in their client's best interest.
Not everyone needs help with their finances, but for those who do, having a CFP in your corner can be invaluable. If you aren't sure how to organize your finances, navigate investing or balance your financial priorities, a CFP can help.
» Interested in becoming a CFP? Learn the requirements
What does a certified financial planner do?
CFPs can provide services across a broad range of financial planning concerns. They are required to demonstrate in-depth knowledge of risk management, investment, tax, retirement savings and income, and estate planning in order to obtain the CFP certification.
More specifically, CFPs who provide holistic planning can create and maintain a financial plan. Typically, that's based on your financial goals, current situation and appetite for risk. CFPs can also help with:
Planning for retirement.
Saving for short- and long-term goals.
Choosing investments.
Tackling debt.
Some CFPs specialize in certain areas, such as divorce, retirement planning or small-business ownership. Because of this, it’s helpful to have an idea of the services you need before you choose a CFP.
» Learn more: How to choose a financial advisor
How much does working with a CFP cost?
Financial advisors use various fee models. Their fees may vary widely depending on the service they provide, your geographic area and other factors. An overview of typical financial advisor fee ranges is below.
Fee type | Typical cost |
|---|---|
Assets under management (AUM) | 0.25% to 0.50% annually for a robo-advisor; about 1% for a financial advisor. |
Flat annual fee (retainer) | Typically $2,500 to $9,200. |
Hourly fee | $200 to $400. |
Per-plan fee | Typically $3,000, but the cost will vary by service. |
Commission | 3% to 6% of investment transaction amount. |
» Read more about how much a financial advisor costs
How do I find a certified financial planner near me?
The CFP Board has a directory, which makes it easy to find an advisor in your area, check a CFP’s certification status and check for disciplinary actions.
The various designations financial advisors hold can cause some confusion. Some advisors even have multiple designations. Here are a few common designations financial advisors may have:
Chartered financial analyst: CFAs specialize in investment analysis and portfolio management. They often serve as financial advisors for corporations.
Certified public accountant: The CPA certification is common among tax preparers and accountants. If your financial advisor has a CPA, they may be able to help you optimize your tax situation.
Chartered financial consultant: ChFCs complete similar coursework to CFPs. ChFCs may have more training in modern financial planning topics, including behavioral finance, planning for same-sex couples and planning after a divorce. But CFPs have more stringent academic and examination requirements.
CFP vs. CFA
The main difference between a CFP and a CFA is that the testing and certification processes are different, and the CFA designation is typically for people who specialize in investment analysis and portfolio management.
CFP vs. financial advisor
The term financial advisor is an umbrella term that refers generally to the many different types of financial advisors. A CFP is a financial advisor.
Remember, if you have any doubts about your advisor’s CFP status, you can check their status on the CFP Board website. It's also important to consider how exactly your advisor is getting paid. This is determined in part by whether they are a fee-only advisor or a fee-based advisor.
» Dive deeper: Fee-based vs. fee-only advisors
How to become a CFP
On average, it takes between 18 and 24 months to become a CFP. It can cost a minimum of $925 if you already have an undergraduate degree and can bypass the coursework requirement.
You may also have to fulfill professional experience requirements. That can take from 24 to 36 months. Here’s what else you'll need to do.
1. Complete the education requirement
The CFP Board requires completion of specific coursework on financial planning and a bachelor’s degree or higher. Applicants have up to five years from the date they pass the exam to receive their bachelor’s degree. The CFP Board may allow you to skip the coursework if you've completed related courses or already hold certain credentials.
2. Pass the exam
The exam consists of 170 multiple-choice questions to be completed in a total of six hours. According to the CFP Board, an average of 66% of first-time exam-takers passed in 2024.
3. Gain professional experience
Prospective CFPs must have documented professional experience. They can complete either:
6,000 hours of professional experience related to financial planning.
4,000 hours of apprenticeship that meets additional requirements.
These hours have to occur either within 10 years before taking the exam and/or within five years after passing it.
4. Adhere to the ethical standards
To become a CFP, you have to sign the Ethics Declaration. In it, you commit to acting as a fiduciary for your clients. You also must pass a background check conducted by the CFP Board.
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