Lastly, the ethics requirement consists of a background check and a standards code. Before granting you the certification, the board reviews any potential violations, like previous misconduct. This is to ensure that you adhere to the standards of the CFP Board. Being able to follow the rules of conduct and exhibit professionalism are keys to being a successful financial advisor. Holding a CFP certification proves to clients that you are knowledgeable in financial planning and have achieved the high standards enforced by the CFP Board.
An advisor with either designation can certainly give thorough advice. The biggest difference between the two is the process of becoming certified. The education portion for a ChFC is lengthier, comprising of nine college-level courses. But at the core, it is a similar education to the CFP education. Courses focus on financial planning, covering topics like investing , insurance planning and retirement planning.
There are also courses that focus on planning with different types clients, such as divorcees or special needs families. These courses are self-paced and can be done online. Held online or live, these review sessions are a highly effective way to prepare for the big exam.
Holding the highest level of academic accreditation, The College has educated approximately one in five financial advisors across the United States.
Learn more at TheAmericanCollege. Skip to main content. Both designations provide a valuable core of financial planning knowledge through seven shared courses. The American College of Financial Services. Certified Financial Planner Board of Standards.
Basic financial planning, insurance planning, income taxation, retirement planning, investments, estate planning fundamentals. About where they spend their dollars, about how they insure and manage potentially catastrophic risks, how they manage their debt, and what they do with their accumulated assets.
And so if you're going to work with a client who spent 20, 30, plus years accumulating their entire life savings before coming to you for advice, I think the least you can do is spend a few months studying for the CFP exam to make sure you can pass it and that you know what the heck you're talking about before you give actual real-world advice to people about stuff they spent a lifetime accumulating. Like, I'm not trying to be overly melodramatic here, but I do view what we do as financial planning as a sacred duty.
You're guiding people about what to do with their life savings that once they retire is literally all they have to rely on for the rest of their life. And so in the end, all the CFP exam really is is a way to start verifying that you really actually learned and internalized all that stuff that you learned in your CFP classes and textbooks and tries to affirm that you can actually apply it properly with clients.
Now, to be fair, the CFP test isn't perfect and no one I know has ever gotten a perfect score on the exam, so you won't know everything, passing the exam doesn't mean you're perfect, but simply put, studying for the CFP exam is a great way to practice and at least do your best to try to make sure you know what the heck you're talking about before you give advice in the real world.
Because if you're not confident enough to be certain you can answer those questions on a controlled test, I don't know why you think you know enough to give someone advice about what to do with their life savings that they spent a lifetime accumulating. Now, that being said, it's also worth recognizing from just a more practical perspective, the CFP marks are also just a far better known and recognized designation by consumers in the first place, driven in large part by the fact that the CFP Board has been conducting a public awareness campaign for years to help promote the CFP marks.
Now, ultimately, as I said, the primary reason you should get a designation is simply to learn so you know what you're talking about and can fulfill your sacred duty to clients by actually giving good accurate advice, but it doesn't hurt to get a designation that consumers are actually familiar with and recognize as well, for which the winner hands down is simply CFP marks over the ChFC designation. It may not be universally recognized, but the CFP marks are far more recognized by consumers, literally 5X the consumer recognition, and far more adopted by advisors.
Now, notwithstanding all of this, a lot of people advocate that the ChFC is a better designation because it does literally have more courses and covers more material. I mean, it is the CFP coursework plus two more. You just add two more courses later. Which means all you need to do is take a break for a little while, go prepare for the CFP exam, sit for it and pass it, check that box, get that designation, and then go and add the last two courses to have your ChFC as well.
That was actually the pathway that I pursued. I completed my CFP coursework, sat for the exam, earned the marks, and then just went back to the American College and continued the classes. I ultimately got my ChFC and then my CLU designation as well, and then stayed enrolled at the minimum course load even further and got a few more degrees and designations as well.
Because the reality is that as more and more advisors get their CFP marks, having your CFP marks isn't even actually going to differentiate you in the future. Instead, the problem down the road is going to be not having CFP certification will differentiate you, and not in the good way. It'll make people wonder like all these other advisors have CFP certification, you don't, what's going on there? Like, that's what happens when CFP certification continues to get this growing level of public awareness.
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