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• A Certified Financial Planner (CFP) is a trade-industry designation for advisors and other professionals in the financial field.
• CFPs must have a certain amount of experience, pass a rigorous exam, and commit to ongoing financial education.
• CFPs advise their clients on Topics like retirement, investments, tax planning, and risk management.

Working with a Certified Financial Planner (CFP) can often be a good idea if you're in the market for financial guidance. A CFP is one of the most experienced and knowledgeable financial advisors you'll find. They are held to a strict code of ethics and professional standards that have to be continually maintained. CFPs offer their clients a very specific level of expertise.

Here is a closer look at what CFPs do and what you need to know before working with one. 

What is a CFP? 

A CFP is a financial professional who has completed all requirements to earn certification from The Certified Financial Planner Board of Standards, Inc. (CFP Board). This encompasses years of education in 72 financial specialties, thousands of hours of practical experience, and ongoing adherence to high ethical standards and certification requirements. 

CFPs are usually fiduciaries. "A fiduciary is a legal and ethical standard that requires financial advisors to act in their clients' best interest at all times," says Chloe Wohlforth, CFP and partner at Angeles Wealth Management.

This means CFPs are bound to always deliver advice that is in the best interest of their clients. They also take a holistic approach to financial planning, looking at both long-term and short-term goals. 

"Establishing goals will help you keep on track for financial success by holding you accountable," explains Jordan Gilberti, CFP and senior lead planner at Facet. "It serves as a way to measure progress, tweak the plan as needed, and curb spending toward aspects that we may not prioritize as much as reaching our goals."

The cost of working with a CFP can vary greatly depending on what services they offer, how much experience they have, whether they work as part of a firm or as an independent advisor, etc. Because CFPs have a fiduciary responsibility to their clients, they often use a fee-only model for compensation. That means they don't accept commission for products they sell or recommend and charge the client directly for their services. This could be through a retainer, a percentage of earnings, or some other arrangement that is agreed upon by both parties. 

What is financial planning?

Financial planning is what it sounds like: making a plan to reach your financial goals over time.

"The purpose of a financial plan is to achieve personal and professional goals through strategic allocation of resources, management risks, enabling us to live our lives to the fullest," says Gilberti.

Because everyone's goals and resources are different, financial planners can help people use tools like retirement accounts and investments strategically to achieve what they want in the long term.

"The critical step to make sure a financial plan is successful is to make sure that the data going into the plan is accurate," says Wohlforth. "Taking time to identify what expenses truly look like today and then think how those numbers might change in the future is key to the validity of the plan and therefore its successes in keeping clients on course."

You don't have to hire a CFP or another type of financial advisor to make a financial plan, but their expertise means they have a full picture of the tools at your disposal and the smartest way to use them. Some people also like working with a financial planner for sheer accountability. Sure, you could create your own financial plan — but will you?

What does a Certified Financial Planner do? 

CFPs work with individual clients in any number of areas related to personal finance advising and planning. To earn their certification, CFPs have to:

• Complete extensive coursework in financial planning specialties
• Pass a six-hour test that tests them in eight core Topics they are likely to come across in real-life planning situations
• Complete at least three years of financial planning work with actual clients
• Comply with the CFP Board's Code of Ethics and Standards of Conduct    

CFPs may be sole practitioners who solely provide financial planning services, wealth management advice, analysis, or investment and portfolio management. Some are credentialed professionals in a field related to financial planning who choose to earn CFP certification to add to their main practice. You'll often find CPAs, attorneys, insurance agents, and other legal, financial, or business professionals with CFP certification. 

"Often questionnaires are sent to gather information and software is used for data aggregation and analysis. That said, every financial plan must start with a conversation, and then what the output looks like will carry from client to client depending on what type of information is most useful to them," says Wohlforth.

A CFP may provide one or more services related to any of the specialty areas they've studied. Some of these include saving for retirement or college, creating a trust or fund for charitable giving, helping develop financial plans to attain a short-term goal, guiding your investment strategies, assessing risks to your wealth, and other specialties they choose to focus on. 

Specifically, all CFPs have experience with each of the following:

• Professional conduct and regulation: Consumer protection laws, fiduciary responsibilities, ethical obligations, how financial institutions work, and what regulations govern them
• General principles of financial planning: The process of financial planning, cash flow management, working with financial statements, debt management, financial counseling, financing strategies, money concepts and calculations, financial values, attitudes, biases, and behaviors
• Education planning: Analyzing needs, savings options, how financial aid works, strategies around gifts and income tax, and vehicles for financing education
• Risk management and insurance planning: Risk and insurance principles, analysis, and evaluation; health, disability, long-term, life, property, and casualty insurance; annuities; and business insurance needs
• Investment planning: Risk evaluation, investment concepts and measures of returns, asset allocation, portfolio development, diversification, and analysis, tax issues related to investments, valuation of stocks and bonds, and investment strategies (including alternative investments)
• Tax planning: Basics of tax law and calculations, how taxes apply to businesses, trusts, property transactions, and estates, how to reduce and manage liabilities, and how to manage charitable giving
• Retirement savings and income planning: Analyzing retirement needs and advising the best plans for clients, how entitlement programs impact retirement needs, regulatory and distribution considerations, selecting the right plan for a business, and planning to pass a business on
• Estate planning: Tax implications and strategies for transferring property, estate liquidity and taxation, business transfers, how laws and regulations apply to marriages and non-traditional relationships, and trusts

CFP vs. CFA

In your search to find a financial advisor or planner, you will certainly come across many CFPs. You may also find financial pros who are Chartered Financial Analysts (CFAs). This is a certification similar to what CFPs earn. However, the CFA program focuses only on investment analysis, where CFPs have a much broader scope of experience.

CFP vs. Financial planner

Financial planners are financial experts who take your whole financial life into consideration when developing a financial plan and strategies for long-term and short-term goals. They often offer services for tax planning, retirement plans, budgeting, investment guidance, insurance, and more.

Regular financial planners aren't regulated by the CFP Board of Standards and don't have the same ethical and legal obligations that Certified Financial Planners do. In fact, financial planners don't technically need to be licensed to provide finanical planning services. Unlicensed planners must then work with other licensed advisors or consultants to coordinate specific transactions. 

CFPs, on the other hand, offer the same services as financial planners, but they also have the accreditation and ethical obligations to act in their client's best interest. If you want to ensure you're receiving the best advice, a CFP is the way to go. 

If you're mainly focused on investment strategies and portfolio advice, a financial advisor may be a better fit. 

"Investing can be a good way to grow wealth over the long term, and offers the potential for higher returns compared to a typical checking or savings account," says Gilberti. "It is important to consult with a CFP professional to ensure you are choosing investments that reflect your time horizon and risk tolerance."

How to find a CFP

One of the easiest ways to find a CFP in your area is to search on LetsMakeAPlan.org, which is the Certified Financial Planner Board of Standards' consumer site. There, you can input your location, the radius you'd like to search, and the planning services you're looking for. If you already know the name of a CFP and would like to find more information about them, you can search for their last name, as well. 

Search results will show an address, map, year of certification and their current certificate (if applicable), planning services offered, languages spoken, and any disclosures, disciplinary actions, or bankruptcies involving an individual CFP. If you want to verify the credentials of someone who says they are a CFP, you can do so at CFP.net. 

Once you find a CFP you might want to work with, plan on interviewing them to see if they are a good fit for your needs. Consider asking about:

• Education and credentials
• Specific services offered and their experience in these areas
• Their approach/philosophy when it comes to financial planning
• What types of clients they usually work with
• Fee structure and fiduciary responsibilities; does commission play any role in their business?
• Who will be working on your account and personally with you
• Any disciplinary or legal actions associated with the CFP or their firm

Remember, a CFP works for you and you need to feel comfortable with them. Don't feel like you have to hire any one person over another. Go with whoever has the best qualifications to help achieve your goals and the right chemistry to build a long-term professional relationship.

CFP frequently asked questions (FAQs)

Should you hire a certified financial advisor?

If you're in the market for someone to help you with just about anything related to your financial health or future, looking into CFPs in your area might be a good place to start. These professionals are held to a very high standard of education, ethics, and experience that is ongoing to maintain certification. This may deliver you some reassurance that your finances are in good hands. 

That doesn't mean financial planners who are not CFPs are any less qualified to meet your needs. It all comes down to what you want to get out of your relationship with your financial guide and what kind of experience you feel they should have. This is a very personal decision that only you can make. Remember that CFP certification is only one tool to use in researching financial professionals — not the only one.

Details

Last Updated: August 1st, 2023

Almost seven in ten of the 2,926 candidates who took the CFP Certification test in July passed.

The CFP Board stats show that the 67% pass rate was the highest since July 2015 (70%), although the test blueprint has been updated twice since, in March 2016 and March 2022.

Ten states accounted for more than half (1,562) of those taking the test last month – California, Texas, Pennsylvania, Florida, Illinois, New York, North Carolina, Colorado, Ohio and Massachusetts – although the individual states’ pass rates is not reported.

Asked after the test why they wanted to gain CFP Certification, 41% said to demonstrate experience on the job (41%), and 25% said to distinguish themselves as a fiduciary.

Firms showed strong support for their candidates with 77% of test takers saying they had received some financial support from their employer during the examination process.

“As CFP Board continues to foster growth in the financial planning profession, we are committed to providing access to the tools CFP® certification candidates need to prepare for the exam,” said CFP Board CEO Kevin R. Keller, CAE. “Congratulations to candidates from across the country for passing this rigorous exam.”

Prepping for the exam

Exam takers from last month’s round were asked how they prepared for the examination.

The top answers included:

• CFP Board Practice test 1
• the test Candidate Handbook
• the Candidate Preparation Toolkit.

Other resources used included CFP Board supplementary resources and guidance documents, the CFP Board Candidate Forum and webinars.

Level 4 test success – or failure – is a big subject of conversation on LinkedIn among those at the start of their careers in advice.

Many people proudly display images of their test certificates within posts that recall the blood, sweat and tears involved in obtaining those passes.

Some posts are particularly triumphant because success only came after one or two failed previous attempts. The message conveyed is inspirational – ‘FAIL is a First Attempt at Learning’ or ‘failing is not trying again’.

Accepting we are fallible and forgiving ourselves for not performing perfectly is a better approach for mental health

But dusting yourself down after failure and having another go does not always come easily. Candidates need to be mentally prepared to resit an test and will want to avoid making the same mistakes again. So, what should they do to boost their chances of a successful resit?

Frame of mind

It may be tempting to beat yourself up for failing an test and dwell on the could haves, should haves and would haves but this kind of negative thinking is unhelpful.

Writing for the British Psychological Society’s website, BPS Research Direct staff writer Emma Young points out that when dealing with failure it is important to be kind to yourself.

Referencing the work of Kristin Neff – a professor of educational psychology at the University of Texas – Young says those who show self-compassion after test failure ‘go on to study harder for future exams’.

Reflect on the causes of these errors. Were they due to a knowledge gap or time management?

Accepting that we are fallible and forgiving ourselves for not performing perfectly in an test situation is a better approach for mental health.

Wasim Mehmood, wealth planner at Kingswood Group, agrees it is important not to be hard on yourself.

“Whether you’ve passed or not, you have likely put the hard graft in to cover the syllabus and chunky textbook,” he says. “The days building up to the test and the test itself can often be intensive and you’ll likely be well overdue a break, so take some time off. You’re going to have the best chance of learning effectively with a fresh and well rested mind.”

Having a balanced study timetable is also important in terms of maintaining health and performing well in the exam.

Allocate time for studying, rest and personal interests to foster personal development and holistic wellbeing

“Studies show taking breaks during study can Strengthen focus and productivity,” says Sam Kunda, co-founder and managing partner of business consultancy Change Frontier. “Allocate time for studying, rest and personal interests to foster personal development and holistic wellbeing.”

Practical steps

Preparing for a resit is not only about being in the right frame of mind and taking care of yourself – it also involves practical steps, such as refining revision strategies.

Kunda suggests adopting the “3R” methodology – review, reflect and revise. This starts with reviewing your results to see where you lost marks.

Exam boards such as the Chartered Insurance Institute do not deliver test papers back but candidates can see how many marks they got for each learning objective and build a picture of where they lost marks that way.

“Reflect on the causes of these errors. Were they due to a knowledge gap or time management?” says Kunda. “Then revise the areas that need improvement. Studies show that repetition and exposure to the same information Strengthen long-term memory retention.”

Kunda also suggests joining study groups, as research by the University of British Columbia showed people who studied in groups performed better in exams.

People who fail written test papers often debate whether it is worth paying to get them remarked rather than booking a resit

Many commentators say doing plenty of practice papers makes a big difference between passing and failing professional exams but even this is not a panacea.

“It’s easy to get into the habit of doing multiple practice papers and going over the ones you got wrong, but after a while you may find you’ve learnt them by memory and you’re not really learning anything,” says Mehmood.

Instead, he suggests looking at the learning objectives set down in the syllabus and revisiting those sections in the textbooks, e-learning and knowledge checkers.

Remarking and feedback

People who fail written test papers often debate whether it is worth paying to get them remarked rather than booking a resit.

“This might be worthwhile if you were within a mark or two of a pass and it can be especially helpful because you will get feedback from the examiner on where you lost marks, as well as areas you missed,” says Mehmood.

Even if the remark still results in a fail, the feedback you are given can create the basis of revision for the resit.

“Also be aware of how you learn best, whether that’s with textbooks, audiobooks or e-learning – there’s many ways to learn the content,” says Mehmood.

“Some can simply read a textbook and absorb, but we’re all different and recognising the process that works best for you will help you learn more effectively and efficiently.”

It's no secret that many physicians question the value of Maintenance of Certification (MOC) requirements and are concerned about the amount of time, effort, and money the process takes. Now, they and at least two cardiology societies are starting to speak up.

MOC is an initiative from the American Board of Internal Medicine (ABIM) that requires an initial certification that costs thousands of dollars and must be repeated every 10 years. Annual MOC requirements involve tests that cost $220 for the first certificate a physician holds and about $120 for each subsequent one.

Interventional cardiologists (ICs) and other subspecialists have additional fees and requirements.

MOC 'Burdensome,' 'Costly,' 'Complex'

On July 21, hematologist-oncologist Aaron Goodman, MD, an associate professor at the University of California, San Diego, posted a petition on behalf of ABIM diplomates. It calls on ABIM to eliminate the MOC requirement because it is "burdensome," "costly," and "complex and time-consuming." 

As of August 22, the petition had garnered more than 18,000 signatures. 

Goodman recently debated ABIM President and Chief Executive Officer Richard J. Baron, MD, in a Healthcare Unfiltered podcast. Before the debate, host Chadi Nabhan, MD, MBA, tweeted that he could not find a single physician who would defend the MOC and recertification.

The debate touched on Topics such as fees, evidence of value, the certification test format, and the cost and requirements to maintain more than one board certification. Overall, Goodman made the analogy to giving a patient chemotherapy: Because there are harms, he better know that there are also benefits. He cited that the harms associated with MOC include "financial toxicity, time toxicity, and stress toxicity," with the latter being particularly toxic to him personally.

Though the podcast gave both participants ample opportunities to express their views, it's not clear that either participant persuaded the other.

Cardiologists who are unhappy with MOC are speaking up on X (formerly Twitter). IC Matthew Sample, MD, listed five things he's done to Strengthen his practice since IC graduation, for which he received no MOC points.

In response, internist Artem Minalyan, MD, asked, "Hypothetically, if Dr Baron required an IC procedure, I wonder if he would request you to get all your MOC points prior to consenting."

SCAI and HRS Weigh In

Some professional societies have responded to the ABIM's threat to revoke the certifications of cardiologists who don't participate in periodic MOC activities. 

The Society for Cardiovascular Angiography & Interventions (SCAI) published its "Position on ABIM Revocation of Certification for Not Participating in MOC." In it, SCAI states that ABIM diplomates who pass their exams and report procedural volumes as required should be "indisputably" recognized as "certified" for the relevant time frame (eg, 10 years), regardless of whether they participate in any other MOC activities.

SCAI President George D. Dangas, MD, PhD, told theheart.org | Medscape Cardiology that "Many of our members have expressed their frustration surrounding the confusion regarding their MOC requirements, including myself. We felt that this confusion could endanger the certified status of members, which would inevitably impact patient care, which is our greatest concern."

The society has received an "overwhelmingly positive response" to its statement, he said. "Our hope is that ABIM will consider simpler, transparent regulations that are reflective of the feedback received from their constituents." 

In response to the COVID-19 pandemic, ABIM extended the deadline for diplomates whose certificate expired in 2020 or 2021 until the end of 2022; Dangas suggests that ABIM further extend the deadline to enroll in or renew your MOC to the end of 2024 and that ABIM should "develop a recertification program that can be explained in a single slide/page."

Other subspecialty groups are following SCAI's lead including the EP Advocacy Foundation, and the Heart Rhythm Society (HRS).

MOC Alternatives

The ABIM touts the value of MOC on its website, stating: "There is compelling evidence showing that MOC improves value of care without sacrificing quality and that board certified physicians command higher salaries."

Alternative options that are arguably less arduous are available.

In collaboration with ABIM, the American College of Cardiology (ACC) launched the ABIM/ACC Collaborative Maintenance Pathway (CMP) in 2019 as an alternative MOC assessment option. 

The CMP "focuses on one or a small group of Topics within cardiology each year, incorporating learning activities as well as a pre-/post-formative knowledge assessment," Janice Sibley, ACC's executive vice president of Education and Publishing told theheart.org | Medscape Cardiology. The program continues to evolve, she said. 

In 2022, she noted that the ACC increased the flexibility of the CMP by removing the 7-hour learning engagement requirement, allowing users to choose how much time to spend learning in the CMP program. They also extended the performance assessment windows from 7 to 9 days each, covering 2 weekends for each.

She said that to date, more than "6400 learners" are enrolled in the CMP program. 

Though the collaboration seems to make MOC less onerous, some cardiologists think it makes the ACC "complicit."

A certification program that is independent of the ABIM launched in 2015. The National Board of Physicians and Surgeons (NBPAS) is a nonprofit organization led by an advisory board of unpaid physicians (including Medscape's editor-in-chief, Eric Topol, MD). NBPAS seems to be gaining momentum and acceptance. 

Cardiologist Melissa Walton-Shirley, MD, recounted her recertification experience with the NBPAS late last year. She now maintains a "hybrid" certification with both ABIM and NBPAS. Though she wants to support the latter, she found that the alternative certification option still requires an initial ABIM certification and is not recognized in all states or by many insurers and hospitals.

Will MOC ever disappear? Sibley said that the ACC is always looking to Strengthen and enhance their offerings. "It is time to lead a change in the conversation from certification to continuous competency, from punitive to supportive options, from random knowledge testing to focused assessing knowledge gaps and lifelong learning. This will require innovation, technology, and new ways of thinking that offer cardiologists flexibility, relevance, and value and ultimately benefit the patients they serve."

Many physicians, including cardiologists, are hoping that the Goodman petition and further pressure from professional societies may finally translate into action.

Medscape LLC provides educational content including MOC. Medscape's editorial content, including news, features is developed independently of the educational content available on Medscape. 

Follow Marilynn Larkin on Twitter: @MarilynnL.

For more from the heart.org | Medscape Cardiology, follow us on Twitter and Facebook

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