What Is a Certified Financial Planner and How to Find One

Questions You Should Ask a CFP Professional

certified financial planner

If you need help making decisions about how to best manage your finances, a Certified Financial Planner may be the answer. In a nutshell, a Certified Financial Planner or CFP is someone who holds professional credentials attesting to their knowledge, expertise and experience in offering financial advice. That's a fairly broad definition of what a CFP does. If you're considering hiring one, here's a closer look at what you need to know.

What Is a Certified Financial Planner?

A Certified Financial Planner is someone who has extensive experience and training in financial planning and is held to strict ethical standards. They must successfully pass the CFP Board's standards with regard to the four E's: education, examination, experience and ethics. The code of ethics requirement ensures they act as fiduciaries, which means always making decisions and recommendations that are in their client’s best interests, not their own.

The CFP Board outlines the requirements for becoming a CFP and is responsible for administering the CFP exam. At a minimum, candidates must have at least a bachelor's degree and three years of relevant full-time financial planning experience. The CFP exam is administered six times per year and involves an exhaustive test covering a wide range of financial planning topics.

What Do Certified Financial Planners Do?

Individual Certified Financial Planners may use different strategies to help their clients, but generally, their services and skills may cover:

  • Analysis of your current situation and preparation of financial reports, such as your net worth.
  • Insurance planning.
  • Maximizing the use of your employer’s retirement benefits program, i.e., your 401k.
  • Investment planning.
  • Income tax planning.
  • Estate planning.

The CFP's job is to help you create a comprehensive financial plan for managing your money. That's different from something like a registered investment advisor, who would exclusively offer advice on investments.

So for example, you might seek out a financial planner to help you decide how much life insurance you need, whether it makes sense to incorporate a trust into your estate plan, how much you should be saving for college for your children and where you could invest money for retirement once you've maxed out your workplace retirement account. A Certified Financial Planner would possess specific knowledge and expertise related to these planning areas.

How to Find a Certified Financial Planner

There are thousands of CFP professionals in the United States and finding the right one for you starts with doing some preliminary research. The first step is ensuring that a CFP you're considering is certified by the CFP Board, which is something you can check on the organization's website.

From there, you can draft a list of questions and topics to discuss when vetting potential CFP candidates you want to work with. Here are some areas to explore when interviewing a potential advisor to handle your money:

  • How do you approach financial planning? Make sure the planner's investing philosophy isn't too aggressive or too conservative for your agenda and needs
  • Describe your client base. Some planners require a minimum net worth or have other parameters for prospective clients. Make sure you aren’t going to be an afterthought.
  • Tell me about your experience. Obviously, the more market cycles the CFP professional has seen, the better.
  • What are your qualifications? Ask about his or her credentials and try to determine if he (or she) really has a passion for finance.
  • Who will handle my account? Some CFP professionals handle all clients directly, while others work with a team. Ask to meet any other team members, and check out their credentials as well.
  • How do you get paid? Planners may receive commissions and/or fees. Make sure all this is detailed in your agreement. Fee-only Certified Financial Planners are paid only by you — they don’t get commissions for selling you into various investment products.
  • How much do you charge? Get a clear estimate of hourly rates, late fees, or commission percentage.
  • Do you see any conflicts of interest? Again, CFP professionals must adhere to a strict code of conduct that requires them to put your needs ahead of all others.

Also, make a point of asking whether a CFP candidate you're interviewing has ever been the subject of disciplinary action for unethical or unlawful actions. The CFP Board, the Financial Industry Regulatory Authority (FINRA), and state insurance and securities regulators are good sources for checking an advisor's credentials. For example, you can use FINRA's Broker Check tool to research the background of a financial professional or advisory firm. Planner Search from the Financial Planners Association is another helpful tool.

Researching Certified Financial Planners can take time but it can be time well spent if you're able to connect with a professional who understands your unique financial situation and needs. Once you've established a working relationship with a CFP, remember to review your progress each year to make sure the person you've chosen is still a good fit.

Article Sources

  1. CFP Board. "CFP Certification: The Standard of Excellence." Accessed January 21, 2020.

  2. CFP Board. "Become a CFP Professional." Accessed January 21, 2020.

  3. U.S. Securities and Exchange Commission. "Financial Planners." Accessed January 21, 2020.

  4. U.S. Securities and Exchange Commission. "Investment Advisers." Accessed January 21, 2020.