Understanding the certified financial planner (CFP) certification, the steps involved and how long it takes, can help new financial advisors and those looking to progress their career start planning the process. While it typically takes 18 to 24 months to complete, there are many things that could impact the CFP timeline for you. Here’s what you need to know.
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What Is the CFP?
The certified financial planner (CFP) certification is a professional credential for financial advisors that reflects their expertise in comprehensive financial planning. The average person invests approximately 1,000 hours of study over a period of 18+ months preparing for this exam and completing the requirements. This doesn’t include the 6,000+ hours of actual professional experience that you need before taking the exam (or 4,000 hours of apprenticeship that meets specific requirements).
Administered by the Certified Financial Planner Board of Standards (CFP Board) in the United States and similar organizations globally, the CFP certification demonstrates a financial advisor’s expertise in retirement, estate planning, tax, investment, insurance and risk management. This sector-specific knowledge can influence crucial financial decisions, guiding clients toward achieving their financial goals.
How the CFP Certification Process Works
To become a certified financial planner (CFP) in the United States, individuals typically need to follow these general steps:
- Education: Obtain a bachelor’s degree or higher from an accredited college or university. The degree can be in any discipline, although some institutions offer specific financial planning programs.
- CFP board-registered program completion: Complete a CFP Board-registered education program. These programs cover various financial planning topics, meeting the educational requirements set by the CFP Board.
- CFP exam: Pass the CFP Certification Examination. This comprehensive exam assesses your ability to apply financial planning knowledge to real-life situations. It covers areas such as retirement planning, investment management, tax planning and estate planning, among other topics.
- Work experience: Acquire at least 6,000 hours of professional experience related to the financial planning process or 4,000 hours through an apprenticeship program. The experience requirement aims to ensure that CFP professionals have practical knowledge and expertise in financial planning.
- Ethics course: Complete a CFP Board-registered ethics course. This course focuses on the CFP Board’s Code of Ethics and Standards of Conduct, emphasizing professional responsibility and ethical behavior in financial planning.
- CFP board’s fitness standards: Agree to adhere to the CFP Board’s fitness standards, which include background checks and declarations regarding criminal history, bankruptcy, and other matters that could impact your ability to practice as a CFP professional.
- CFP certification application: Submit an application for CFP certification through the CFP Board, including verification of education, examination, experience, and ethics requirements.
- Continuing education: After becoming certified, maintain your CFP status by fulfilling ongoing continuing education requirements. This involves completing a certain number of continuing education credits every two years to stay updated with industry changes and maintain competence.
How Long It Takes to Complete the CFP Process
While on average the completion of CFP certification takes between 12 to 18 months, it is not a race. The journey to CFP certification is a worthy investment in gaining knowledge, skills and professional competence.
A strong foundation in financial planning or a relevant degree could lessen the time spent preparing for the exam. However, those new to this field may face a learning curve, necessitating extra hours to understand and master the material.
As previously mentioned, you’ll need 6,000 hours of professional experience related to financial planning (or 4,000 hours through an apprenticeship program) in addition to taking the required coursework and taking the exam. So the actual length of time for you to complete will depend on where you’re at in your own personal career and how quickly you can meet the requirements on your own, which will vary by person.
Becoming a CFP professional involves a blend of education, applied experience and high ethical standards that will give you a comprehensive understanding of personal financial planning. The length of time it takes for you to complete is typically at least 18 months, but this will depend on your unique situation.
Tips for Growing Your Advisory Firm
- Once you get your new CFP, you’ll want to show it off to as many potential clients as possible. It would be nice to find a way to bring in leads and get you in touch with potential clients as much as possible. SmartAdvisor can make it easier to find leads and connect with them. SmartAdvisor is an online lead-generation tool that takes the guesswork out of finding the right clients for your advisory business.
- Another thing to do after you get your CFP is to list it on your website and deploy some creative social media marketing to make sure that as many potential clients as possible know about your new certification and what it can do for them.
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