A certified financial planner, or CFP, is a type of financial advisor who possesses one of the most rigorous certifications for financial planning knowledge.
They 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 (legal) standard, meaning they are obligated to act in their client's best interest.
What does a certified financial planner do? CFPs help clients create and maintain a financial plan. A CFP might start by determining their financial goals and discussing their current financial situation and appetite for risk. A CFP can also advise on retirement planning, saving for short- and long-term goals, choosing investments and tackling debt.
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.
How can you become a CFP?
- 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 Certification Exam in the United States, administered by the CFP Board, is a 170-question, computer-based, 6-hour test (two 3-hour sessions) covering 70+ topics across eight main knowledge domains.
Key areas include General Principles, Risk Management/Insurance, Investment Planning, Tax Planning, Retirement Savings/Income, Estate Planning, and Psychology of Financial Planning.
CFP Exam Syllabus Principal Knowledge Domains (Approximate Weighting): Professional Conduct and Regulation (8%): Ethicsfiduciary standard, and legal compliance. General Principles of Financial Planning (15%): Financial planning process, economic concepts, and behavioral finance. Risk Management and Insurance Planning (11%): Risk assessment, life/disability/health insurance. Investment Planning (18%): Asset allocation, security valuation, portfolio management. Tax Planning (14%): Income tax, business tax, tax mitigation strategies. Retirement Savings and Income Planning (18%): Retirement plans, Social Security, income streams. Estate Planning (10%): Trusts, wills, wealth transfer. Psychology of Financial Planning (7%): Client communication and counseling.
Exam Structure & Details: Format: 170 multiple-choice questions (standalone and scenario-based). Sections: Two 3-hour sections, separated by a 40-minute break. Timing: Offered three times a year (March, July, November). Tools: Permitted financial calculators include HP 10bII/12C/17bII+ and TI BA II Plus.
Join 4M+ learners. Unlock unlimited quizzes, wrong-answer tracking, flashcards + reminders, study guides, and 1-on-1 challenges.