Why Work with a CFP®

| November 16, 2018

The tricky thing about this industry is that it is hard to understand who is qualified and who is not. Just check out this commercial the CFP Board put out a few years ago - click here.  Experience is good for an advisor to have, but doesn’t mean their advice is in your best interest or quality advice at all.  Working with a CFP is probably one of easiest filters you can apply to your advisor search process because it automatically filters for experience, education, and an ethics requirement.

What is the History of the CFP designation?

CFP stands for CERTIFIED FINANCIAL PLANNER and it is arguably the most recognized certification in the financial planning industry.  The designation is awarded by the Certified Financial Planner Board of Standards and has been around since 1985. It was formed by a group of financial professionals who wanted to raise the standard of education and ethics in our industry. There have and always will be bad actors but if you are working with a cfp I like to think your probably for avoiding people like that is much higher b/c of the tremendous amount of effort and work someone needs to put into passing the test and agreeing to the ethical standards of the CFP board.

How does an Advisor Qualify?

When I was studying back in 2004-2006, it was a two year program where you had 5 classes and each class had an exam to pass and then you would sit for the big two day test. Back then the two day test was on a Friday/Saturday and it was only offered in the spring and fall. And of course, in the fall it was offered on Michigan/Ohio state weekend, so I had to miss the 2005 game. The one where Ohio State QB Troy Smith came from behind to win in Ann Arbor. ugh. Anyway,  I took classes with the College for Financial planning in Denver, but there are others who offer the curriculum, including many undergrad programs which didn’t exist when I was in college at Michigan. While technically not a masters degree, I view it as a similarity.

What doesn’t it Mean?

Just because someone has the designation doesn’t mean they are a great investor, or offer great service, or have access to great technology. It just means they have met all requirements such as passing the exam, etc. I think it is a great starting point for filtering who are considering working with.  Generally when speaking with a CFP, you’re going to find they have a lot of industry experience (at least a few years) and they are well rounded with understanding most aspects of planning - investments, taxes, estate planning, insurance planning, and of course, retirement planning.


CFP is not the same thing as CFA. At Peak, our business model is where we are the CFP and we partner with outside CFA’s. We develop your plan 100% in-house and then when we determine what the investment needs are for the client, we partner with appropriate third-party institutional strategists through our UMAX platform. We like to say we have over 100 CFA’s on our bench. The CFA (Chartered Financial Analyst) is more heavy on the accounting and security analysis topics for investment management whereas the CFP is more about financial planning. There is certainly a little overlap but the CFA is more more intense on the investment management area. In my opinion, the investment management portion of the CFP exam is surprisingly limited.