What is a Certified Financial Planner (CFP)?
A CFP is a person who has earned the right to use the CFP designation by taking a series of college level courses, passing a rigorous test, obtaining sufficient work experience, and satisfying an ethics requirement.
As a result, a CFP has a solid understanding of the following financial/tax topics:
- Financial planning
- Estate planning
- Insurance
- Retirement plans (i.e. 401k, 403b, IRAs, Roth IRAs, etc.)
The Certified Financial Planner Board of Standards, Inc. is the organization that awards and oversees the issuance of the CFP designation.
How much does a CFP cost?
Most CFPs are paid based on the assets they manage, also known as Assets Under Management (AUM). The fee for AUM charges usually start at 1% per year on the value of the investments managed and decline for larger portfolios. There are some CFPs who charge by the hour and others who offer flat-rate pricing.
What are the education requirements for a CFP?
To obtain the CFP designation, an individual must complete a series of college level courses, pass the CFP examination, fulfill the experience requirement (either 6,000 hours of professional experience or 4,000 hours of apprenticeship), and satisfy the ethics requirement to act as a fiduciary.
Do CFPs require ongoing continuing education?
Per the CFP Board, CFP registrants are required to complete 30 hours of continuing education (CE) every 2 years. In addition, CFPs are required to complete 2 hours of ethics CEs to maintain their CFP designation. The remaining 28 hours must be within the CFP Principal Knowledge Topics, which cover a very broad range of topics such as: financial planning, insurance, investments, taxes, retirement, estate planning, and the psychology of money. All CEs must be approved by the CFP Board to qualify for credit.
