Certified Financial Planner (CFP): What You Need to Know

CFPs can help you create a comprehensive financial plan — and they have the education and experience to back it up.
Alana BensonSep 13, 2021
CFP: What Is a Certified Financial Planner?

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A certified financial planner is a type of financial advisor who possesses one of the most rigorous certifications for financial planning knowledge. CFPs must have several years of experience related to financial planning, pass the CFP exam and adhere to a strict ethical standard as set by the Certified Financial Planner Board of Standards.

CFPs, unlike some other types of financial advisors, are held to a fiduciary standard, meaning they are obligated to act in their client's best interest.

CFPs can help you create and maintain a . A CFP might start by determining your financial goals and discussing your current financial situation and appetite for risk. A CFP can also advise you on everything from choosing specific investments, saving for a down payment on a home and planning for retirement.

Some CFPs specialize in a certain area, such as divorce or retirement planning, while others tend to work with specific clients, like small-business owners or retirees. Because of this, it’s helpful to have an idea of the services you need before you choose a CFP.

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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.

The 2018 Kitces Research survey on financial planning found that CFPs charge, on average, $1,871 for a comprehensive financial plan, $235 for hourly services and $5,528 for annual retainer services. And while there is no set fee that CFPs charge, it’s usually more than what a non-certified advisor might charge. , some of which offer access to CFPs, typically charge a small percentage of your assets under management, often between 0.3% and 0.9%. (Read more about .)

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.

Fee-only advisors are solely paid by their clients, creating fewer opportunities for conflicts of interest. Fee-based advisors can receive a commission on products they sell, which can sometimes create those conflicts, such as suggesting a worse product over a better one because they would receive a commission. Bound by their fiduciary duty, CFPs have to put their clients’ needs first regardless of their fee structure (though it’s always a good idea to ask any advisor, CFP or not, what their fee structure is, and to work with a if possible).

Some online financial planning services offer access to CFPs for less than what an in-person advisor charges. Check out some of our favorite services that include access to CFPs below.

 offers a directory of all its certified CFPs, which makes it easy to find an in-person advisor in your area. This site also allows you to check a CFP’s certification status and check for any instances of disciplinary action.

A certified financial planner is one of the many . While “financial advisor” is a general term that does not necessarily denote any specific credential, CFPs hold a certification that ensures they have several years of experience and are held to a fiduciary standard.

Remember, if you have any doubts on your advisor’s CFP status, you can check the status on the CFP Board website.

The various designations financial advisors hold can cause some confusion. More often than not, a financial advisor who is a CFP will be able to help you with your financial planning needs, but other advisors may be able to better assist you in certain areas, such as tax advising. Some advisors even have multiple designations, making them more competitive within their field. Here are a few common designations an can have.

Chartered financial analyst: CFAs specialize in investment analysis and portfolio management. While CFPs typically help individual clients with their financial planning, CFAs often serve as financial advisors for corporations.

Chartered financial consultant: While ChFCs are less common than CFPs, the two certifications require similar coursework, and recipients of each are likely headed down the same career path: financial advisory and planning services. ChFCs may have more training in modern financial planning topics, such as behavioral finance, planning for same-sex couples and planning after a divorce, but CFPs have more stringent academic and examination requirements.

Certified public accountant: CPAs are a bit more distinct from some of the other financial advisory certifications. The CPA certification is common among tax preparers and accountants (even though CPA has the word "accountant" in it, not all accountants have CPA certifications). If your financial advisor has a CPA, they may be able to help you optimize your tax situation.

It’s not easy to become a CFP, and for good reason. Helping people navigate their finances is an important job. On average, it takes between 18 and 24 months to become a CFP, and can cost a minimum of $4,000 (if you already have an undergraduate degree). Here’s what else it takes:

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