How To Become a CFP - Certified Financial Planner Explained

Becoming a Certified Financial Planner is no easy task. The requirements for CFP certification are arduous and take years for financial planners to meet. In this video, we'll be breaking down exactly what goes into becoming a CFP and how to meet the requirements for certification.

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A CFP or Certified Financial Planner is the premier designation for financial planners. Working with a certified financial planner assures you that the person sitting across from you is competent and is bound by a stricter ethics standard than your standard financial advisor.

In order to become a CFP, there are 4 requirements that all CFP candidates need to fulfill. These are the education requirement, the exam requirement, the experience requirement, and the ethics requirement. While there is not a strict order that they need to be fulfilled in, typically the education requirement comes first and is followed by the exam and experience requirements that are sometimes completed simultaneously. The ethics requirement is an ongoing commitment to a high ethical standard that always needs to be maintained.

In order to meet the CFP education requirement, you'll need to go through a CFP Board registered program that covers the core topic areas of financial planning. Many colleges now offer CFP Board certified degrees that allow students to have completed the education requirement upon graduation. Personally, that's what I was able to do at UW Madison so that immediately upon graduation OI was ready to sit for the exam.

The CFP Exam was hands-down the hardest exam I have ever taken. Cumulatively, I spent over 500 hours studying for this exam (which probably adds up to more time than I spent on studying all throughout college). The exam is 6 hours long and contains 170 questions ranging from taxes, to ethics, to investments, to estate planning, and a whole lot of other financial topics. After passing the exam, you'll need to start racking up experience in the field before you can start calling yourself a CFP.

Meeting the CFP Experience Requirement consists of accumulating over 6,000 hours of work in the field. This equates to about 3 years working full-time. If it weren't for this pesky requirement, I'd already be able to call myself a CFP, but because I haven't accumulated enough hours yet, I can't use the marks yet.

Last is the ethics requirement. Being a CFP, you are held to a higher ethical standard than other financial professionals. As a CFP, you are required to put the best interests of your clients above your own. While some would argue this is just common sense (myself included), just because someone holds themselves out as a "financial advisor" doesn't mean they have to only think about what is best for you. They might be swayed to make recommendations based on which products make them the most commissions. Not great.

Once you have met all 4 of these requirements (and paid some money to the CFP Board), you can now legally hold yourself out as a CFP, add the letters to the end of your LinkedIn profile, and get to work!

I hope you found this video helpful and if you are considering going down the path of becoming a certified financial planner, I am wishing you all the best!

TIMESTAMPS

0:00 – Intro

2:10 – How To Become A CFP

2:20 - Education Requirement

4:22 – Exam Requirement

6:57 – Experience Requirement

10:06 – Ethics Requirement