What is a CFP?

A CFP (Certified Financial Planner) is a credential awarded by the CFP Board to planners who complete an approved education programme, pass a rigorous exam, log thousands of hours of relevant experience and commit to a fiduciary standard when giving financial advice.

Section 01

What the credential actually requires

  • Education: a bachelor's degree plus a CFP Board-registered financial planning programme
  • Exam: a 170-question, six-hour exam covering planning, tax, retirement, estate, insurance and investments
  • Experience: 6,000 hours of professional experience, or 4,000 hours through an apprenticeship
  • Ethics: a background check and a binding commitment to act as a fiduciary on financial advice
  • Continuing education: 30 hours every two years, including two hours of ethics
Section 02

Why the fiduciary part matters

A fiduciary must act in your best interest. The alternative standard — suitability — only requires that a product is not unsuitable, which leaves room to recommend the version that pays the adviser most.

CFP Board rules extend the fiduciary duty to all financial advice given by a CFP professional, not only to portfolio management. If a CFP breaks it, you can file a complaint with the Board, which can revoke the credential.

Section 03

What a CFP costs

Key takeaway

Fee-only planners are paid by you alone. Fee-based planners can also earn commission on products — legal, but it introduces the conflict the fiduciary rule exists to manage.

  • Assets under management: typically 0.50%–1.25% a year, falling as the balance rises
  • Flat annual retainer: commonly $2,000–$10,000 depending on complexity
  • Hourly: roughly $200–$500 an hour for focused questions
  • One-off plan: about $1,500–$5,000 for a full written financial plan
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Section 01

How to verify and choose one

  • Check the credential and any discipline history on the CFP Board's public verification tool
  • Check the firm's Form ADV, which discloses fees, conflicts and disciplinary events
  • Ask directly: are you a fiduciary at all times, and how are you paid?
  • Ask what you get each year — plan updates, tax coordination, rebalancing, meetings
  • Prefer someone who works regularly with situations like yours, not just your asset level
Section 02

FAQ

What does CFP stand for?

Certified Financial Planner. It is a professional credential issued by the CFP Board in the United States for comprehensive financial planning.

Is a CFP a fiduciary?

Yes. CFP Board standards require CFP professionals to act as fiduciaries whenever they provide financial advice to a client.

How much does a CFP cost?

Key takeaway

Common structures are 0.50%–1.25% of assets a year, a $2,000–$10,000 annual retainer, $200–$500 an hour, or $1,500–$5,000 for a one-off written plan.

What is the difference between a CFP and a financial advisor?

"Financial advisor" is a general job title with no required credential. CFP is a specific certification with exam, experience, ethics and continuing education requirements behind it.

Is a CFP worth it?

For a straightforward situation, a low-cost index portfolio and a written plan may be enough. Where equity compensation, business income, blended families, or retirement withdrawal sequencing are involved, good planning usually pays for itself in tax alone.

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Start with monthly take-home income, then list fixed obligations such as housing, insurance, minimum debt payments, and essential services. Estimate variable expenses using recent bank and card records rather than memory alone. A budget spreadsheet or budgeting software can organize the figures, but the underlying process is the same: subtract planned outflows from available income and adjust until the plan is workable.

The 50 30 20 rule groups spending into broad categories, but it is a guideline rather than a requirement. Housing costs, family needs, debt, and local expenses can make different allocations more practical. When planning on a budget, include irregular costs such as repairs, annual premiums, and gifts by setting aside a monthly amount. An emergency fund is separate from predictable sinking funds and is intended for unplanned financial disruptions.

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