Certified Financial Planner – Definition

Cite this article as:"Certified Financial Planner – Definition," in The Business Professor, updated March 18, 2019, last accessed October 22, 2020, https://thebusinessprofessor.com/lesson/certified-financial-planner-definition/.


Certified Financial Planner (CFP) Definition

A certified financial planner is a professional certification conferred to an individual by the Board of Certified Financial Planner of Standards. CFP certificants have to go through a rigorous assessment and training coupled with a certification program that ensures they are equipped with sufficient knowledge regarding their ability to address various aspects of a client’s financial life.

A Little More on What is a Certified Financial Planner (CFP)

With that said, the would -be, the certified financial planner has to pass a pretty involving certification test set as a bar of exam specifically for financial planners. They also have to spend three years in a learning institution and then complete the same number of years working in a designated field to garner experience.  Certified Financial Planner is also needed to abide by a strict code of ethics that governs everyone in the industry.

How to Obtain the Certified Financial Planner Designation

Financial planning and advising are projected to be one of the fastest growing occupations. Getting a CFP mark may assist an individual in poaching lucrative job positions in the industry. A CFP professional works with clients to establish a comprehensive plan for meeting their long-term financial objective including retirement, college tuition, a home, a startup, and many more. Certified Financial Planner jobs are currently expected to increase up to 25 percent in the next five years thereby making it an iconic career option for the young professionals who aspire to join the financial industry as service providers. Many professionals in this industry work in large financial as well as insurance firms. But others have chosen to establish their own companies. To become a Certified Financial Planner, you must meet specific credible requirements.

  • ¬†¬†¬†¬†¬†¬†¬†¬†Complete a CFP Board-registered education program- Here, one can choose from various options for their education. The CFP Board will be notified immediately the candidate has completed their exam. The coursework providers can also do the notification on your behalf.
  • ¬†¬†¬†¬†¬†¬†¬†¬†Sit for the Certified Financial Planning Exam- One can do this exam once the Board of Certified Financial Planners has been notified of the candidate‚Äôs education completion. These exams are offered three times annually in March, July, and November. The candidate has to take the examinations within five days, at a locally approved examination center that offers CFP designation.
  • ¬†¬†¬†¬†¬†¬†¬†¬†It‚Äôs crucial to note that one can be allowed to register for the examination before they complete their program. However, the CFP Board has to receive notification of the candidate‚Äôs completion of education to verify that the deadline is still valid. Failure to do this one can be charged a $100 withdrawal fee.


  • ¬∑ ¬†¬†¬†¬†¬†¬†¬†¬†Hold a bachelor‚Äôs degree from a certified university in five years- A candidate is eligible to sit for these exams beforehand. However, they need to ensure that they complete their degree in the 5-year window period.


  • ¬∑ ¬†¬†¬†¬†¬†¬†¬†¬†A candidate should exude experience in financial planning. This may be three years of full-time service in the relevant field.



References for Certified Financial Planner (CFP)





Academic Research for Certified Financial Planner (CFP)

  • Use of financial planners by US households, Elmerick, S. A., Montalto, C. P., & Fox, J. J. (2002). Financial Services Review, 11(3), 217. This paper examines the extensive use of certified financial planners in American households. Research indicates that most consumers feel great about their finances but less optimistic regarding their future success because of the economy. With the rising complexity in the current economy, Americans have confirmed that they need financial guidance. They are therefore turning to financial advisors particularly those who have certification from Certified Financial Planner. Majority of citizens have also agreed that these advisors need to put consumer‚Äôs interests first. Key findings from the Board of Certified Financial Planners reflect American‚Äôs perceptions that the government should take additional action to offer protection to American investors.
  • The changing role of the financial planner part 1: From financial analytics to coaching and life planning, Dubofsky, D., & Sussman, L. (2009). Journal of Financial Planning, 22(8), 48-57. This article stems from research based on the transformative roles of a financial planner. It was discovered that about 80 percent of Americans had hired a financial planner to help them engage in some form of financial coaching or planning. The article discloses that in the long run, not all financial planners have embraced the new and emerging role. Most planners assessed the survey do see life planning as well as coaching since it’s a value-added service. Nonetheless, a substantial minority found the concept to be more shocking with the mission. Some clients are wary of the prospective ethical as well as personal complications that could come up when financial planners tread of the life-planning ground.
  • Personal financial planning: Origins, developments and a plan for future direction, Altfest, L. (2004). The American Economist, 48(2), 53-60. In this paper, research focuses on the basic level of personal financial planning and its impact on people’s lives. As such, it’s important for people to understand their need for as well as the value of owning a budget since that’s a roadmap for planning how to spend money annually. At the purest form of personal financial planning, one should receive support from a professional. Creating a detailed report daily will also play a pivotal role in enhancing personal financial planning. It was also noted that when it comes to financial planning, even with creating a sound budget, one can still find themselves lingering in debt.
  • What consumers look for in financial planners, Bae, S. C., & Sandager, J. P. (1997). Journal of Financial Counseling and Planning, 8(2), 9. The research paper investigated some key elements consumers aspire for their financial planners to have. It was discussed that a great financial planner has to gather personal as well as financial data regarding a client. They use the information they have garnered to come with projections that indicate how viable it is for one to attain a commercial objective. The projections are often based on realistic assumptions regarding inflation alongside investment returns. Consumers also prefer to work with a certified financial planner who has vast experience in offering advice on retirement planning, tax planning, and investment planning.
  • Issues in comprehensive personal financial planning, Black Jr, K., Ciccotello, C. S., & Skipper Jr, H. D. (2002). Financial Services Review, 11(1), 1-10. This paper seeks to analyze issues impacting the administration of comprehensive financial planning and the instrumental delivery models. Quite often, a comprehensive financial planning engagement requires up to 15 hours of effort by the planner. The scope of financial planning is, therefore, going to vary considerably among individual clients. The study identifies some of the areas that are often covered in a personal financial planning model including goal setting and spending the time to analyze the wishes of the clients while quantifying these aspects in terms of the available time horizon. It was concluded that clients need a comprehensive personal financial planning model that is well crafted to help them achieve their financial goals.
  • The ethical orientation of financial planners who are engaged in investment activities: A comparison of United States practitioners based on professionalization and ‚Ķ, Bigel, K. S. (2000). Journal of Business Ethics, 28(4), 323-337. In this paper, researchers seek to address the existing conflicts between financial advisers, models of administering benefits, different compensation systems and whether these systems suit the needs of clients or financial planners more. Many customers hire a certified financial planner to manage their assets. There are various models of financial advising as well as multiple structures utilized by different financial advisors. These models are vastly evolving. While there is no perfect fee structure for the job, all models have an aspect of conflicting interests. The only advisor who has no conflicts of interest is the client. Even so, it was concluded that a financial advisor who owns a certified planning certificate has lesser conflicts of interest which imply that they lean more on a client’s side.
  • Ratios and benchmarks for measuring the financial well-being of families and individuals, Greninger, S. A., Hampton, V. L., Kitt, K. A., & Achacoso, J. A. (1996). Financial Services Review, 5(1), 57-70. This paper addresses the daily financial needs of the ordinary citizen including whether it’s possible to measure the financial well-being of a family or an individual. It was discovered that every day thousands of professionals in the financial industry including counselors, coaches, educators, and planners help the common citizen navigate their financial challenges through a broad range of approaches as well as programs. There is a developing consensus that the eventual objective of these efforts is to better the financial well-being of the individuals served. Until now, financial prosperity is lacking a universal definition as well as a form of measurement.
  • The role of universities in the development of the personal financial planning profession, Warschauer, T. (2002). Financial Services Review, 11(3), 201. This paper highlights the role of education centers such as the universities in the industry of financial planning. It was discovered that there is a huge controversy on the input of universities to the professional career of financial planners. As a result, the sector, which is still in its infancy, is still developing since it‚Äôs been subjected to rapid growth and development. Various controversies and regulatory intervention have impacted the financial planning industry and its growth. This paper also examines the implications of the agenda of receiving tertiary education concerning its role in supporting the development of the financial planning industry. It argues that tertiary education has a significant role to play in the sector. However, it’s yet to achieve the objective. This research is also useful for those in the industry of management, operations and academic areas of tertiary education.
  • Financial planners in Australia: an evaluation of gaps in technical and behavioral skills, Jackling, B., & Sullivan, C. (2007). Financial Services Review, 16(3), 211. ¬†This research paper analyses the essence of financial planning including what sets it apart from other professionals. It was noted that this profession remains firmly as well as prominently rooted in the technical skills that other financial planners must master. The study was based on the Australian market, and the analysis concluded that the success of financial planning is rooted in technical skills. As such, other essential skills include technical services, professionalism, client focus, business operations, as well as strategy.
  • The influence of gender on the perception and response to investment risk: The case of professional investors, Olsen, R. A., & Cox, C. M. (2001). The journal of psychology and financial markets, 2(1), 29-36. This article focuses on various gender roles and their impact in the world of finance. The researcher illustrates how women are way too different from men when it comes to assessing their attitude toward money. The paper points out that male investors are risk tolerant as well as self-confident when it comes to money matters. On that note, few studies have also pointed to the fact that there is a connection between these differences especially in the information acquisition behavior of female as well as male investors. It was established that women exude a higher financial risk compared to men. As such, financial decisions represent an essential part of someone’s life such that understanding how people make financial decisions is critical. An investment is the main sacrifice of a particular present value for a future award. Therefore, the investor’s background coupled with past experiences may play a critical role in the decisions one makes during the investment process. The literature supports the fact that male investors often take up high-risk investments.
  • Professional certification opportunities for accountants, Hutchison, P. D., & Fleischman, G. M. (2003). CPA Journal. This paper highlights the role of a certification program and its use in the industry of finance. It also addresses the question of why it’s crucial for certified accountants to earn more than one certificate type in order to practice in the sector. The article offers a list of various certifications including why a practicing accountant needs to register themselves to earn upward mobility. Before pursuing a course in certification, professionals need to consider a few elements including determining whether a specific certification fits in their career objectives, choosing a certification that will increase their chances of getting clients and enhance their opportunities in the sector. One should also consider advancement as well as promotion in the long run.

Was this article helpful?