What is a Certified Financial Planner™?


What is a Certified Financial Planner™?

It is currently estimated there are over 300,000 financial professionals in the United States. It often seems there are just as many different titles and designations within the industry as well. Titles like financial advisor, financial planner, broker, registered representative, etc. Then add on the alphabet soup of designations an advisor can earn, some of which can be earned with minimal or no study and a few hundred dollars, and it leaves most people wondering what all these titles and designations mean.

The unfortunate truth is that very few of these titles help you understand what an advisor can actually do for you or what experience and qualifications they possess. The CFP® designation is unique however because it imposes rigorous standards to earn and continue to hold the title, making it widely acknowledged as one of the highest certifications for financial advisors. So, what is a CFP® and, perhaps more importantly, why should you care?

What is a CFP® professional?

A CFP® is someone who is trained to work with you to develop a thorough financial plan to help you reach your short and long-term financial goals – from investing for retirement or college, legacy and estate planning, and everything in between.

What does it take to earn the CFP® designation?

The CFP® certification is owned and awarded by the Certified Financial Planner Board of Standards, Inc., also called the CFP Board. To earn the CFP® credential, which can take on average between 18-24 months, financial professionals must meet a list of requirements, often known as the “Four E’s”.

  1. Education
    CFP® professionals must have a bachelor’s degree or higher from an accredited college or university. The CFP Board also requires all candidates to complete a college-level course on financial planning approved by the Board. The course covers topics such as:
    • General Financial Planning Principles
    • Estate Planning
    • Tax Planning
    • Insurance Planning
    • Risk Management
    • Financial Plan Development
  2. Examination
    CFP® professionals must pass the six-hour comprehensive CFP® Certification Exam. The average pass rate for this difficult exam is only 55 to 60 percent.
  3. Experience
    The CFP board requires 6,000 hours of qualifying experience in the field. The aim is to make sure that applicants have put their knowledge to plenty of practice in everyday situations.
  4. Ethics
    The CFP Board holds all CFP® professionals to the highest of ethical standards. An extensive background check is conducted. Perhaps most importantly, CFP® practitioners, unlike most financial advisors, are held to the fiduciary standard, meaning they are obligated to act in their client’s best interest at all times. This is a crucial distinction.

Why is it important?

Most financial professionals are not held to the fiduciary standard at all times. Instead, most advisors are held to a suitability standard, meaning they are not obligated to act in your best interest, they simply need to provide advice or recommendations that are suitable for you. So if an advisor can get paid more by selling you a certain investment, that advisor doesn’t have to worry about whether or not that investment is the absolute best option for you, the investment simply needs to be “suitable” for you.

All this matters because few things are more important than who you trust with your finances. While money is certainly not the most important thing in life (at least not in my book), having a solid financial plan can give you an opportunity to have a powerful impact on the people and organizations you love most. Think of your family and friends, your church, or a charitable organization you are passionate about. An experienced and well-trained CFP® professional, who is obligated to place your interests first, can listen to you and help you reach your goals and leave a lasting impact on the people who matter most to you.



Brad Lupkes

Brad Lupkes, CFP®
Financial Advisor



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