Earning certification is a great way to show your credibility and expertise as a financial planner to prospective employers and clients. CFPs must pass a certification exam and adhere to a code of ethics in order to maintain their credential. The minimum education and experience requirements are a bachelor's degree and three years of full-time relevant work experience.
Individuals wishing to obtain Certified Financial Planner (CFP) certification must meet the experience and educational standards set forth by the CFP Board of Standards and pass the certification exam. CFP license holders must adhere to a code of ethics while offering their services to clients in order to maintain licensure. Certain professionals automatically qualify to sit for the credentialing examination, including active or inactive Certified Public Accountants and lawyers.
|Required Education||A minimum of a bachelor's degree, but some individuals go on to earn doctorates in their professions|
|Required Experience||Three years of full-time, relevant work experience|
|Exam Requirements||Passage of the CFP certification examination|
|Job Outlook (2014-2024)*||30% for personal financial advisors|
|Median Annual Salary (2016)**||$65,725|
Sources: *U.S. Bureau of Labor Statistics, **PayScale.com
How to Obtain CFP Certification
The Certified Financial Planner Board of Standards proctors the CFP exam three times per year. Three years of full-time relevant work experience is required before applying to sit for the exam. Applicants must also meet a number of educational requirements. A bachelor's degree in any field from an accredited educational institution is required to keep a current CFP license. Individuals may obtain CFP certification without holding a bachelor's degree, but must earn and provide proof of the degree within five years of successfully completing the CFP certification examination. Graduates of the following degrees or professionals with the following designations are automatically eligible for the examination.
- Certified Public Accountant license (inactive okay)
- Doctor of Business Administration
- Chartered Life Underwriter
- Chartered Financial Consultant
- Ph.D. in Business or Economics
- License to practice law (inactive okay)
- Chartered Financial Analyst
The CFP certification exam is 10 hours long and broken down into three segments that cover various topics. As opposed to testing for textbook knowledge, the topics of the CFP exam test the ability of individuals to apply knowledge to real-world business scenarios. Financial advisors who wish to successfully pass the CFP examination must demonstrate proficiency in all areas of tax provisioning and planning. Topics on the examination cover the areas of financial planning, insurance planning, employee benefits planning, investment planning, retirement planning and estate planning.
Requirements for Keeping the CFP Certification
Financial advisement professionals who hold CFP certification status must acknowledge and follow a rigorous code of ethics set forth by the Board of Standards. This code outlines how CFP license holders must conduct themselves while offering their services to clients. Individuals who do not comply with the code can have their certifications revoked by the Board of Standards.
Salary and Employment Outlook Information
According to PayScale.com, the median salary among certified financial planners was $65,725 as of January 2016. The U.S. Bureau of Labor Statistics reports that employment opportunities for personal financial advisors were expected to increase 30% between 2014 and 2024. This rate is significantly faster than the national average for all job sectors.
A 10-hour-long exam may seem daunting, but CFP certification shows potential clients that you're a credible and authoritative financial planner who meets or exceeds standards set forth by the CFP Board of Standards. Requirements to sit for the exam typically include at least a bachelor's degree and three years of relevant experience. Adherence to a code of ethics is necessary to maintain the CFP designation.