Behind the CFP® Designation


“Why am I doing this?” This question crossed my mind more than a few times recently as I detached myself from the real world for hours (days? months?) at a time to study for my CFP® (Certified Financial Planner) Certification Exam. I studied after work until I fell asleep, I studied while I ate lunch, I turned down plans with my friends. I knew it was important for me to get this certification, but why?

As I thought more and more about what becoming a CFP® professional meant to me, I realized that the appropriate question wasn’t “Why am I doing this?” but rather “What does becoming a CFP® professional mean for clients?” This designation won’t automatically mean I am a better financial planner or that I will have a more successful career. What it does mean is that when you see those letters after a person’s name, that professional has fulfilled the rigorous requirements of the CFP® Board that enable them to better serve clients, and that is why we do what we do here at WealthPoint. So what are those requirements? They are known as The Four E’s:

CFP® professionals must complete approved coursework before they can sit for the exam. This includes courses in investing, retirement planning, risk management and insurance, estate planning, tax planning, and so on. Coursework includes learning theoretical concepts and practical application of knowledge (such as developing a comprehensive financial plan). I was able to complete my education requirement while I was in college thanks to my degree from Purdue University, but these programs aren’t exceedingly common yet, so many candidates must take more classes after they have graduated and started working.

Once the education requirements are met, candidates can sit for the exam. The exam content consists of not only the aforementioned subjects, but also the financial planning process itself, along with ethical and regulatory components. The exam was basically a full day of sitting in a testing room, analyzing situations, then applying the concepts I had learned and reviewed extensively. Memorization does not do much good; I had to know how to dissect information that was given to me, discern what was relevant, and successfully apply it to real-life scenarios.

Candidates must complete multiple years of hands-on financial planning work experience in order to become certified. In many cases, including mine, this is at least a 3 year (or 6000 hour) process. During this time, I couldn’t simply twiddle my thumbs at work and wait until I hit 6000 hours; I had to be doing actualfinancial planning work for an actual financial services firm. This can include gathering and analyzing information, developing and presenting financial plans, or monitoring and supporting existing plans.

Perhaps the most important requirement, candidates are obligated to uphold important ethical principles set by the CFP® Board: integrity, objectivity, competence, fairness, confidentiality, professionalism and diligence. A CFP® professional is also required to act as a fiduciary at all times; this means that the professional must provide services in the client’s best interest. Failure to abide by these ethical standards can result in sanctions from the CFP® Board, including suspension or permanent revocation of the certification.

As you can see, CFP® professionals are not one-trick ponies. Anyone can call themselves a “financial planner” but that does not mean they are certified and have met the rigorous standards set by the CFP® Board. CFP® professionals are also required to complete several hours of continuing education on a regular basis, ensuring knowledge of topics and trends within the industry stays up to date. As a client working with a CFP® professional, you can be confident that person has background in various areas of financial planning that enables them to provide comprehensive advice, and someone who is required to act in your best interest. Check out the video at the end of the blog for an example of why it’s good to look for the designation (and for some laughs).

Here at WealthPoint, the CFP® designation means quite a lot to us. We value the dedication and knowledge it takes to become a CFP® professional, and the ongoing education and practice standards that must be met in order to uphold the designation. It also coincides with our belief that the client’s best interest is truly the firm’s best interest, and aligns with our mission to provide comprehensive financial planning and advice.

If you have any questions about the CFP® designation, what it means, or how it enables us to help clients, feel free to contact us. Further information can be found at http://www.letsmakeaplan.org/ and https://www.cfp.net/.

Thanks for reading!


Update – I passed my CFP® certification exam on November 17 and will reach the required number of hours in April of 2017, at which time I will become a CFP® professional. I am very happy A) to have successfully completed this grueling task, and B) to have a social life again.


About the Author: Josh Bentz

Josh Bentz, CFP®, Wealth Advisor, helps clients organize and simplify their financial lives by providing comprehensive, personal financial planning. As a Wealth Advisor, Josh provides comprehensive financial planning for clients. He enjoys getting to know individuals and families so he can give specific, meaningful advice. He believes in being a fiduciary and doing what is in the best interest of clients.