What is a CFP® Professional?

Please join us in congratulating Bautis Financial’s Paraplanner, Kayla Waller, who passed the CFP® exam this July. Waller joined the team in May 2021, after graduating from Virginia Tech, receiving a Bachelor of Science in Business through the CFP® Certification Education option.

By passing the CFP® Exam, Kayla is now one step closer to becoming a CFP® professional. In celebrating her accomplishment, let’s take a look at how admirable this achievement is.

What Is a Certified Financial Planner®?

The CFP® certification is a formal recognition of expertise awarded by the Certified Financial Planner Board of Standards, Inc., representative of expertise in the areas of financial planning, taxes, insurance, estate planning and retirement. Earning the designation involves meeting requirements in four areas: formal education, successfully completing the CFP® exam, relevant work experience and demonstrated professional ethics.

Obtaining the CFP® certification is one of the most difficult and stringent processes in terms of financial advisors. 

The CFP® exam consists of 170 multiple-choice questions that encompasses more than 100 topics related to financial planning, including professional conduct and regulations, financial planning principles, education planning, investments, insurance risk management, tax planning, estate planning and retirement planning. The comprehensive exam ensures a candidate is highly qualified to develop a holistic plan for their client’s finances.

The education requirements consist of two major components; one, a bachelor’s or higher degree from an accredited university or college and two, completion of a list of specific courses in financial planning, as specified by the CFP Board. 

As for professional experience, candidates must have at least three years – or 6,000 hours – of full-time professional experience in the industry.

Candidates must also adhere to the CFP Board’s standards of professional conduct, which includes an extensive background check and disclosing information about their involvement in a variety of areas, such as criminal activity, inquiries by government agencies, bankruptcies, customer complaints and terminations by employers.

Even if CFP® candidates pass the exam and meet all of the above requirements, the CFP Board still has the final discretion of whether or not to award the distinction. Due to these incredible stringent requirements, CFP® practitioners have a vast understanding of financial planning.

What is the Difference Between a CFP® Professional and a Financial Advisor?

While CFP® professionals and financial advisors both provide valuable service when it comes to your money, the terms are not interchangeable. Not only do CFP® professionals hold a certification that ensures they have several years of experience, but they also take a more comprehensive approach to financial planning.

A financial planner takes a holistic view of your financial life into account when developing plans and strategies to help you reach your long- and short-term goals.

A financial advisor looks mostly at investment goals, portfolios and building wealth. 

Not everyone requires the help of a financial professional, but for those who do, working with a CFP® professional can be irreplaceable.