When looking for a financial advisor, it can be helpful to know the difference between some of the professional designations you might encounter. Chartered Retirement Planning Counselor (CRPC) and Certified Financial Planner (CFP) are two common professional designations that many financial advisors hold. The requirements for the CFP are more difficult to complete, and a CFP will generally understand a broad range of financial matters, ranging from budgeting and saving to tax and estate planning. A CRPC, by comparison, is typically held by an advisor early in his or her career and will have expertise focused on retirement planning. This article will review the key differences between the CRPC vs. CFP designations for financial advisors.
A financial advisor who holds a certification in a specific area can help you address those needs and goals.
What Is a CFP?
The CFP certificate is one of the better-known and more highly regarded financial advisor certifications. It is overseen by the CFP Board, which requires certificate-holders to possess significant previous educational and work experience and pass a challenging exam. CFPs must also follow a strict code of ethics, including acknowledging the duty to act as a fiduciary for clients.
CFP applicants also have to pass a background check to screen for any previous criminal cases, customer complaints, disciplinary actions or employment problems. Prerequisites include a four-year degree from an accredited university and at least 6,000 hours of prior experience in the financial services business.
CFP applicants also have to complete a separate college-level capstone course in financial planning from a CFP Board-approved provider. Each of several modules in the course has its own exam. This course typically requires another one to three months of study. Some applicants with pre-existing professional licenses, such as attorneys and accountants, can qualify for a shorter capstone course.
Next is the six-hour CFP exam, a notoriously challenging test consisting of 170 questions on a wide range of financial advisory topics. These include creating a financial plan and saving for retirement as well as managing an investment portfolio, protecting assets with insurance and tax and estate planning.
Before getting their CFP certificate, applicants who pass the test have to agree to a code of ethics that, among other things, requires them to adhere to a standard of fiduciary duty. This means they will put their clients’ interests before theirs in recommending investments. Other advisors may follow a less strict suitability standard, which may permit them to recommend investments that generate more profits for them at their clients’ cost.
Many CFPs are fee-only advisors, meaning they are compensated only by fees charged to their clients. Fees may be flat fees for a particular service, such as creating a financial plan, or calculated as a percentage of the investment assets they are managing. Some CFPs may also receive commissions on investments purchased by their clients.
Situations Where a CFP Can Be Especially Helpful
The scope and depth of training that a CFP receives means that such a professional can offer insight and guidance to clients facing numerous financial challenges and questions. Here are a few of them:
- Tax planning
- Estate planning
- Retirement planning
- Insurance planning
- Investment management
What Is a CRPC?
As opposed to a CFP, the CRPC is offered as a certificate to advisors who are starting their careers by the College for Financial Planning, which is part of Kaplan. It focuses on helping advisors become expert in helping their clients prepare for retirement.
CRPC applications have no specific prerequisites for education or work experience. However, they do have to complete a course of study on topics including assessing needs before and after retirement, investment management, Social Security, taxes and estate planning.
The CRPC course is available through the College of Financial Planning. Courses are presented either with live instructors or in a self-paced, on-demand format. The live instruction course lasts approximately six weeks. The college also offers a number of other financial advice designations, and the CRPC course can be used to satisfy the requirements for those certifications, as well.
After completing the coursework, CRPC candidates can sit for the required online exam. This is an 85-question, closed-book, proctored exam that takes three hours.
CRPC designates must agree to follow the College of Financial Planning’s code of ethics, calling for them to meet standards of integrity, objectivity, competency, confidentiality and professionalism. They also have to re-certify every two years, including completing 16 hours of continuing education.
Situations Where CRPCs Can Offer Valuable Help
While there are many types of potential clients and a broad array of situations where a CRPC’s expertise and services can make a material difference, here are three common such situations.
Near retirement
A CRPC can work with a client to create a retirement income plan that takes into account their retirement savings, Social Security benefits, pension plan income, and other sources of income. The advisor can help the client understand how much they can safely withdraw from their retirement accounts each year, how to minimize retirement income taxes, and how to create a sustainable income stream that will last throughout their retirement.
In retirement
A CRPC can help a client who is already in retirement manage their retirement income, including creating a tax-efficient withdrawal strategy, managing their investment portfolio, and adjusting their income plan as their needs and goals change. The advisor can also help the client with estate planning, including creating a plan for passing on their assets to their heirs in a tax-efficient manner.
Concerns over healthcare costs
A CRPC can also help a client understand their options for healthcare coverage in retirement, including Medicare and long-term care insurance. This kind of advisor can also help the client create a plan for paying for healthcare expenses in retirement, taking into account their retirement income and other assets.
CRPC vs. CFP: Key Differences
CRPC vs. CFP Comparison
| Key Areas | CRPC | CFP |
| Professional Focus | Retirement planning | Broad range of financial advisory services from budgeting and saving to funding retirement and estate planning |
| Prerequisites | Six-week college-level retirement planning advisory course | Background check, four-year college degree, 6,000 hours of financial industry work experience, college-level financial planning course |
| Examination | 85-question, three-hour exam | 150-question, six-hour multiple choice exam |
| Conduct code | College of Financial Planning ethics code | CFP code of ethics, fiduciary standard |
| Continuing education | 16 hours every two years | 30 hours every two years |
Bottom Line
There are some key differences when it comes to the differences between a CRPC vs. a CFP. The CFP certificate demonstrates the ability to advise clients on a wide array of financial topics from budgeting to estate planning. Meanwhile, the CRPC is focused on retirement planning. Requirements for the CFP certificate are significantly more extensive and challenging than the CRPC certificate, which is intended for advisors who are early in their careers.
Tips for Finding a Financial Advisor
- Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find a financial advisor who can help you achieve your financial goals, get started now.
- Financial advisors may have many other certificates demonstrating expertise in various aspects of financial advice and planning. All certificate programs are not created equal, with the best calling for extensive education and work experience, while others require only passing a brief exam and paying a fee.
Next Steps
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