How Much Does a CFP® Make?

Earnings estimates for financial advisors holding the Certified Financial Planner™ (CFP®) designation produce figures from less than $50,000 a year to nearly $325,000. The range reflects the impact of experience, geography, industry and other factors on CFP® earning ability. It also depends to a considerable degree on the source of the estimate. The most reliable figure may come from the Bureau of Labor Statistics, which put average annual earnings for all personal financial advisors at $99,580.

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What Is a CFP®?

A CFP® is a financial advisor who has completed the requirements to earn the Certified Financial Planner® certificate from the CFP® Institute. Like other personal financial advisors, CFPs® counsel clients on investments, taxes, liabilities, insurance, cash flow and related topics to help people reach their financial goals. Some CFPs® also buy and sell financial assets for their clients.

Of the many certificates and designations available to financial advisors, the CFP® designation is one of the most widespread and highly regarded. To earn one, CFPs® must possess a four-year college degree and then complete a further program of college-level study and rigorous testing. In addition, they must have 6,000 hours of experience working in the field. Finally, they must agree to follow a stringent code of ethics, including meeting the fiduciary standard of duty to act only in their client’s best interests.

Many CFPs® are fee-only advisors who receive no commissions when selling financial products and are compensated by fees billed to their clients. Fees may be hourly, fixed or based on a percentage of assets under management. Other CFPs® are fee-based advisors, meaning they receive a mix of commissions and fees.

CFP® Pay Estimates

Estimated earnings of CFPs® vary depending on how the estimate was performed. Some estimates rely on small samples, while others don’t focus on CFPs®. Experience and location also have a powerful influence on earnings.

A survey by the Aite Group is one of the biggest that looked specifically at CFPs.® ¹ It found that the average CFP® with less than nine years of experience earned an average of $145,666. Those with 15 years or more of experience reported $296,967, the highest earnings of any estimate of CFP® pay. However, this estimate was based on a survey of just 183 CFPs®, a small number compared to more than 93,000 CFP® holders reported by the CFP Board.

The Bureau of Labor Statistics has a much larger sample, drawing from a twice-yearly survey covering a total of 1.1 million business establishments of all types. ² However, this sample covers all 830 occupations in addition to personal financial advisors. And BLS does not single out CFPs® among the 263,030 personal financial advisors for whom BLS reports earnings figures. Also, BLS does not include self-employed financial advisors, and many CFPs® are, in fact, self-employed.

With that in mind, BLS’s mean annual wage of $150,670 for personal financial advisors is an average from a range that starts at $48,730 for the lowest-earning 10 percent and extends to $239,200 for the highest-earning 10 percent of advisors.

The states where personal financial advisors earned the most included New York, averaging $205,870, and Alaska, with $226,650. The District of Columbia was also high-paying, with an average income of $161,110 for financial advisors. At the metropolitan level, New York-Newark-Jersey City, led with a $213,810 average, followed by San Francisco and the Bay Area, at $169,110.

CFP® Requirements

Earning the CFP® designation requires completing a combination of education, examination, professional experience and ethical standards established by the CFP Board. These requirements are designed to ensure that CFP® professionals have both the technical knowledge and practical experience needed to provide comprehensive financial advice.

The first requirement is education. Candidates must hold a bachelor’s degree from an accredited college or university. In addition, they must complete coursework through a CFP Board–registered education program. These programs cover key financial planning topics such as investment planning, retirement planning, tax planning, estate planning and insurance.

Candidates must also pass the CFP® exam. The exam is designed to test a candidate’s ability to apply financial planning knowledge to real-world situations. It consists of 170 multiple-choice questions delivered in two three-hour sections. The questions include both standalone scenarios and case studies that require candidates to analyze a client’s financial situation and recommend appropriate strategies.

Professional experience is another key requirement. Candidates must complete either 6,000 hours of professional experience related to financial planning or 4,000 hours through an apprenticeship pathway that involves more direct supervision.

Finally, CFP® candidates must agree to follow the CFP Board’s code of ethics and standards of conduct. This includes meeting the fiduciary standard when providing financial advice and completing a background check before certification is granted.

CFP® Continuing Education

CFPs® must complete continuing education requirements in order to maintain their certification. These requirements help ensure that CFP® professionals stay informed about changes in financial planning practices, tax laws, investment strategies and regulatory requirements.

The CFP Board requires certificants to complete 30 hours of continuing education every two years. Of those hours, at least two hours must focus specifically on ethics and professional standards. Ethics coursework reinforces the fiduciary responsibilities that CFP® professionals have when providing financial advice to clients.

Continuing education courses may cover a wide range of financial planning topics. Common areas include retirement income strategies, tax-efficient investment planning, estate planning techniques, insurance planning and updates to financial regulations. Many CFP® professionals complete these credits through professional conferences, online courses or industry training programs.

CFP® professionals must report their continuing education credits to the CFP Board during each two-year certification cycle. Failure to meet the continuing education requirement may result in the certification being suspended until the requirements are fulfilled.

These ongoing education requirements help maintain the credibility of the CFP® designation and demonstrate that certified professionals remain committed to staying current with developments in the financial planning profession.

Bottom Line

Certified financial planners can expect to earn an annual income of anywhere from less than $50,000 to nearly $325,000, depending on a variety of factors including experience, location and industry. CFPs® in the securities business make the most, followed by those working for lenders. Cities on the East and West coasts pay more than other places. Earning a CFP® can significantly boost the amount an advisor earns.

Tips for Financial Advice

• A CFP® or other financial advisor can help you with budgeting, borrowing, investing, planning, taxes and more handling an inheritance. 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 have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
• Earning a CFP® can have a significant effect on advisors’ ability to earn. CFPs® make an average of 46% more revenue per year than other professionals who lack the certificate.

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