What is CFP Certification?

What is CFP Certification

CFP (Certified Financial Planner) is a prestigious international certification for employees in the financial sector.

Certificates are issued by organizations – members of the Financial Planning Standards Board (FPSB). The FPSB members are 24 national organizations, which have been delegated powers in terms of accepting and considering applications, organizing exams and issuing certificates. In the USA, it is the Certified Board of Financial Planning Standards (CFP Board), in the UK – the Securities and Investment Institute (CISI). There are no representatives from the CIS among the FPSB members. You can view the entire list of organizations in the Internet.

What does CFP give?

Having a certificate means that a specialist is a professional in the field of finance, has specialized higher education, at least 2 years of work experience, constantly improves his/her educational level.

Certificate:

  1. is the equivalent of a license to operate in terms of financial management in the country – member of the FPSB;
  2. allows you to add a CFP mark to your signature;
  3. makes the holder a member of the CFP.

Who is CFP suitable for?

CFP certification is in demand among financiers, auditors, accountants, investment management consultants, financial risk managers, analysts, tax managers. Most of the applicants are residents of the USA, Canada, Australia, Western Europe, and East Asia.

In some countries, CFP is not popular, given that it is necessary to study and pass exams abroad and in a foreign language (usually in English). On the other hand, CFP status is required for those planning their activities in America, Europe or East Asia.

Requirements for applicants

For initial certification, a candidate must meet three categories of requirements (education, experience and ethics) and pass an exam.

Education

  1. A candidate must have a bachelor’s degree or higher or equivalent from an accredited university. The accreditation must be recognized by the Ministry of Education of the country in which the application is being made. International diplomas can be substituted for the bachelor’s degree of the respective country if they are validated by an independent assessment agency – a member of the National Association of Credential Evaluation Services (NACES);
  2. A candidate must take a course at a college or university on a program registered with the FPSB, with the writing of a term paper. The course focuses on topics such as property, insurance, tax planning and investment activities.

Holders of international qualifications CPA, ACCA, CFA have the right to register and take the exam without taking the course.

Exam

This is a 6-hour exam divided into two 2-hour sessions with a 40-minute break in between. The exam consists of 170 questions: tests, self-help questions, case studies, mini-cases.

Experience

The candidate must prove experience in financial planning:

  • 3 years (minimum 2000 working hours per year) or 2 years in operation;
  • apprenticeship experience (activities under the direct supervision of a professional from the FPSB).

Ethics

The application for certification has a separate section on ethics. The candidate must provide information on all precedents of bankruptcy, liquidation, internal and external investigations during his/her activity.

How much does the CFP cost and how long does it take to become a CFP?

From the moment of successfully passing the exam, the candidate has 5 years to confirm work experience, a bachelor’s degree and submit a package of documents to the national FPSB center. Therefore, the minimum period for obtaining a certificate is 5.5 years, taking into account the passage of the FPSB course (4-8 weeks) and preparation for the exam.

The cost of a CFP depends on which national organization the applicant is undergoing training under the auspices of which national organization. For example, in the cost of a 4-8 week Keir CFP course varies between $695-1285. Plus registration fees and fees for teaching materials ($100-200). More details can be found on the CFP Board website.

The cost of the final exam in the United States is $100. In addition, CFP holders pay an annual fee. In the US, this amount is $325.

Differences between CFP and other training

CFP has a number of alternatives:

  • ACCA is a popular qualification among auditors, tax officers, financiers, accountants. The main focus is on a detailed study of taxation, financial accounting, law, IFRS;
  • CIMA — focused on financiers and senior managers. The main goal is the development of management skills;
  • CFA – certification for professionals in the field of investment and financial analysis. CFA is chosen by employees of hedge funds and securities markets, brokerage and dealer companies, specialists in the banking, credit, insurance industry;
  • CPA – qualifications are of high value to financial accounting professionals. The main focus is on the study of ISA and IFRS, taxation. This training is required for those planning to work as a financier or accountant in America;
  • CIPA – international certification for accountants and tax professionals;
  • MBA is a prestigious degree for managers of various levels. Value is largely determined by the prestige of the business school, accreditations and faculty.
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