A Certified Financial Planner (CFP) is a formal designation for professionals who help clients develop financial strategies to meet their goals. CFPs undergo extensive training and must pass board exams to earn the certification, which is awarded by the Certified Financial Planner Board of Standards. Ongoing education is required to maintain CFP status. CFPs can provide guidance during major life changes like marriage, growing a family, new employment, or large windfalls. Their aim is crafting financial plans with clients’ best interests in mind.
Why Work with a CFP
Hiring a CFP makes sense before big purchases like a house, as they identify potential issues. CFPs also manage significant assets well. Though CFPs don’t have specialized expertise in all financial areas, they recognize when to consult other professionals. Earning a CFP involves rigorous education similar to a master’s degree, under supervising CFPs. CFPs undergo background checks and must complete continuing education.
Requirements to Become a CFP
To become a CFP, there is an extensive education program with four segments: core curriculum, ethics, advanced curriculum, and professional education. There is also a national exam and three years of experience. Candidates can take the exam before meeting the experience requirement, then have five years to complete the requirement. A bachelor’s degree in any field is required up to five years after passing the exam.
Mid-career CFPs with 5-10 years of experience average $80,000 annual income, while those with over 20 years average $140,000. CFPs are worth it, providing financial assessment, comprehensive planning, ongoing advice, and expertise in major financial areas. CFP stands for Certified Financial Planner, meaning someone certified by the CFP Board as a financial planning expert.