big family smiling

As Seen In:

Credentials

Why choose a CERTIFIED FINANCIAL PLANNERTM professional?

Choosing a financial planner may be one of the most important decisions you make for yourself and your loved ones. Financial planners can provide you and your family with guidance over your lifetime, or work with you to address specific concerns as needed. A planner can play a central role in helping you meet your life goals and achieve financial well-being. Consequently, take the time to select a financial planner who is competent and trustworthy, one on whom you can depend for professional advice and services. Your future depends on the choices you make.

Credentials are an important criterion for consumers seeking a financial planner.  But financial service providers can obtain more than 100 different credentials.  Some of these credentials take years of study and hard work to earn, but many can be obtained over the course of a weekend.  Clearly, not all credentials are the same—and the distinctions between them can make a big difference when you are looking for a trusted financial adviser.

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 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 following requirements the right to use the CFP® certification marks.

One key factor to keep in mind is the process that goes into achieving and maintaining a credential. In order for a credential to be meaningful, it must be credible. There are few, if any, that are as credible in the financial services industry as the CERTIFIED FINANCIAL PLANNER™ certification (CFP® certification), which is awarded by Certified Financial Planner Board of Standards, Inc. to financial professionals who complete a lengthy and demanding certification process that includes not only education, examination and experience requirements but also actively-enforced ethics requirements that hold CFP® certificants to a fiduciary duty of care; that is putting their clients' best interests first.

To attain CFP® certification, a candidate must first complete a course of study covering nearly 100 financial planning topics.  The topic list is updated every five years based on a survey of the knowledge and skills that practicing financial planners actually use with their clients.  The curriculum for CFP® certification is widely accepted as covering all the topics that allow a financial planner to practice financial planning in a competent and comprehensive manner.  More than 200 accredited institutions of higher learning offer the CFP® certification curriculum.

After completing the educational component, the applicant must pass the rigorous CFP® Certification Examination. This 10-hour, two-day comprehensive examination assesses the applicant's ability to integrate their knowledge of CFP Board's specified topic areas and apply it to "real-life" financial planning situations.  This exam is no walk in the park: The pass rate for test-takers is typically between 55 percent and 60 percent.

Unlike many credentials in the financial services industry that represent educational achievements, the CFP® certification is not an entry-level designation for financial planners just out of school, but one awarded only to financial planners with verifiable experience.  Applicants must hold a qualified bachelor's degree and have spent at least three years delivering all or part of the personal financial planning process to clients.  Just as the CFP® exam requires practical application of financial planning knowledge, the CFP Board's experience requirement ensures that those authorized to display the CFP® marks have demonstrated experience working with clients.

The certification process doesn't end there.  Applicants for CFP® certification must pass CFP Board's Candidate Fitness Standards, which describe conduct that will or may bar an individual from being certified.  They also agree to abide by CFP Board's ethical standards—a Code of Ethics and Professional Responsibility, Rules of Conduct and Financial Planning Practice Standards—which require them to place the interests of their clients ahead of their own.

Unlike most credentialing organizations who claim to have a code of ethics, CFP Board enforces its ethics standards.  Applicants must disclose past or pending litigation or agency proceedings, pass a thorough background check, and undergo a review of any items disclosed or discovered through that process.  CFP Board's established disciplinary procedures provide a rigorous and fair process for investigating questionable conduct and impose discipline where appropriate, up to the permanent denial or revocation of the CFP® certification.  Serious disciplinary actions are made public.  In short, CFP Board's ethical standards have teeth.

Those financial planners who make it through the demanding certification process and attain CFP® certification must also complete 30 hours of continuing education requirements every two years designed to verify their ongoing competency and pass periodic background checks to ensure their commitment to providing ethical services.  This biennial recertification process ensures that the public can trust anyone holding the CFP® certification to provide competent and ethical services that place the client's interest above their own.

This rigorous process of certification and recertification supports CFP Board's mission to benefit the public by granting the CFP® certification and upholding it as the recognized standard of excellence for personal financial planning.  For nearly twenty-five years, the core CFP® certification requirements have been the "4 E's" —education, examination, experience and ethics.  But the specific details of each of those requirements have been strengthened over the years, with each requirement scrutinized in light of the best practices of other professions and industries.  These criteria distinguish in a meaningful way the more than 60,000 professionals around the country who have attained the CFP® certification by demonstrating a commitment to providing competent and ethical financial planning services.

Information for this article was excerpted from CFP Board's Web site, www.CFP.net. Founded in 1985, the CFP Board is a nonprofit certifying organization that owns the CFP® certification marks in the U.S. and benefits the public by fostering professional standards in personal financial planning.