Certified Financial Planners Board of Standards, Inc.

Abbreviation	CFP Board
Founded	1985
Type	Non-profit
Legal status	501(c)(6) 501(c)(3)
Purpose	Certification and standards-setting in the profession of financial planning in the United States
Professional title	Certified Financial Planner professional; CFP professional
Headquarters	Washington, DC formerly: Denver, CO
Area served	United States
Members	95,073 certificants (as of 12/31/2022)
Key people	Kevin R. Keller, CEO
Affiliations	Financial Planning Standards Board (FPSB) Foundation for Financial Planning (FFP)
Employees	110
Website	www.cfp.net

Certified Financial Planner Board of Standards, Inc., an American 501(c)(6) nonprofit organization, sets and upholds standards for financial planning and administers Certified Financial Planner certification - widely recognized by the public, advisors, and firms as the standard for financial planners - so that the public has access to the benefits of competent and ethical financial planning. CFP certification is held by more than 95,000 people in the United States.^[1]

History

CFP Board was founded in 1985 as a non-profit organization created by the College for Financial Planning, which initially created the Certified Financial Planner certification program in the early 1970s.^[2] Originally known as the International Board of Standards and Practices for Certified Financial Planners, Inc. (IBCFP), the organization was granted 501(c)(3) status by the Internal Revenue Service.^[3] IBCFP was renamed the Certified Financial Planner Board of Standards, Inc. in 1994.

In 1987, CFP Board registered the first 25 institutions to offer financial planning education programs based on an approved curriculum.^[2] Four years later, the organization introduced a comprehensive CFP Certification Examination to test individuals’ ability to integrate and apply the knowledge gained from the financial planning curriculum.^[2]

After more than 20 years of operations in Denver, CFP Board in 2007 moved its office to Washington, DC. In 2019, CFP Board celebrated the 50th anniversary of the financial planning profession by convening a roundtable meeting of leaders from across the financial advice ecosystem to develop a shared vision for the future of the financial planning profession.

In 2021, CFP Board's latest Practice Analysis Study introduced a new Principal Knowledge Topic domain called the Psychology of Financial Planning.^[4] This study would also introduce the Financial Planning Competency Framework which defines the areas in which a planner must be competent to effectively serve today's financial planning client. CFP Board defined the three competency clusters as Interpersonal, Leadership, and Technical. The interpersonal cluster requires advisors to have competency in consulting clients, emotional intelligence, and coaching. The leadership cluster requires competency in client advocacy, advisor integrity, and professionalism. Finally, the technical cluster includes competency in financial needs analysis, financial advice, and technological savvy.^[5] The following year, CFP Board published the groundbreaking book, The Psychology of Financial Planning.^[6] Also in 2022, the Center for Financial Planning surpassed the milestone of more than $1 million awarded in scholarships since the launch of its first scholarship program in 2016.^[7]

In 2023, CFP Board announced its establishment of a new 501(c)(6) nonprofit professional organization, stating that the change would provide more flexibility for the organization to promote the benefits of financial planning careers and CFP certification.^[8] The organization also announced that it changed the name of its original 501(c)(3) organization to CFP Board Center for Financial Planning. The Center for Financial Planning previously existed as a distinct initiative within CFP Board that launched in 2015.^[2]

CFP Board Center for Financial Planning

CFP Board founded the Center for Financial Planning to address systemic challenges in the financial planning profession. CFP Board Center for Financial Planning's mission is to advance competent and ethical financial planning and expand CFP professional diversity for the benefit of the public.^[9]

CFP Board Center for Financial Planning develops and implements programs and initiatives in three priority areas:^[10]

• Talent Pipeline: Attracting, onboarding and training new and younger financial planners.
• Diversity & Inclusion: Raising awareness of financial planning careers among underrepresented populations, and changing recruiting, training and retention practices to build a more diverse workforce.
• Knowledge for Practice: Establishing financial planning as a recognized academic discipline in colleges and universities, in addition to sharing research and best practices with financial planners to support outstanding client service.

CFP Board Center for Financial Planning programs are primarily funded by corporate sponsorships and gifts from individual donors.

CFP certification worldwide

In 1990, CFP Board established the International CFP Council. The Council worked to promote the professionalism of financial planning services worldwide and to ensure that such services are offered ethically and competently.^[2]

In 2004, CFP Board sold ownership rights to the CFP marks outside the United States to a new entity, Financial Planning Standards Board Ltd. (FPSB).^[11] A nonprofit, international standards-setting body, FPSB manages, develops and operates certification, education and related programs for financial planning organizations so that they may benefit and protect the global community by establishing, upholding and promoting worldwide professional standards in personal financial planning. FPSB uses the CFP, Certified Financial Planner, and CFP (with flame logo) service marks outside the United States.^[12]

As of February 2023, FPSB has members and associate members from 27 territories around the world, including CFP Board, which joined FPSB in 2008.^[13] Collectively, FPSB members have authorized more than 213,000 individuals to use the CFP marks in their respective countries and regions.^[14]

CFP Board’s certification requirements

CFP Board awards CFP certification in the United States to individuals who meet its initial and ongoing certification requirements. Initial certification requirements include the “4 E’s”:^[15]

• Education: Candidates for CFP certification must complete coursework addressing these major personal financial planning areas: Professional Conduct and Regulation, General Principles of Financial Planning, Risk Management and Insurance Planning, Investment Planning, Tax Planning, Retirement Savings and Income Planning, Estate Planning, Psychology of Financial Planning, and Financial Plan Development.^[16] More than 300 institutions across the United States offer educational programs that satisfy CFP Board's education coursework requirement and qualify individuals to take the CFP Certification Examination.^[17] Candidates for CFP certification must also hold a qualified bachelor's degree.
• Examination: The comprehensive CFP exam covers topics including the financial planning process and principles, tax planning, income and retirement planning, estate planning, risk management, insurance and psychology of financial planning. It is a 170-question, multiple-choice test that consists of two 3-hour sections completed in one day.^[18] Changes took place to the exam in 2021 when CFP Board updated their Principal Knowledge Topics informed by a nationwide study. The results of the 2021 Practice Analysis Study would prompt CFP Board to make changes to the exam beginning in March 2022.^[19] The updated exam would see Education Planning consolidated in the curriculum and the addition of the Psychology of Financial Planning to the Principal Knowledge Topics.^[19] This new topic incorporates an understanding of client and planner attitudes, values, biases, behavioral finance, sources of financial conflict, counseling principles, general principles of effective communication, and critical events with significant consequences.^[4] The CFP exam is offered three times a year at more than 50 locations across the United States. Remote testing options may also be available.^[20] Approximately 3,000-4,000 individuals take the exam each year, and the pass rate for each exam administration has varied from 56% to 70% over the past decade.^[21]

• Experience: Candidates for CFP certification must complete either 6,000 hours of professional experience related to the financial planning process or 4,000 hours of apprenticeship experience that meets additional requirements(such as being completed under the direct supervision of a CFP professional).^[23]
• Ethics: As a condition of certification, CFP professionals must demonstrate ethical fitness for CFP certification, agree to abide by CFP Board's Code of Ethics and Standards of Conduct (Code and Standards), provide certain disclosures to CFP Board, and consent to a background check.^[24]

CFP certification must be renewed annually by completing ongoing certification requirements, including continued adherence to CFP Board's Code and Standards and completion of at least 30 continuing education hours every two years.^[25]

CFP Board's CFP certification program was accredited by the National Commission for Certifying Agencies (NCCA) in 1995 and was the first such accreditation for a non-health-related certification in the U.S.^[2]

CFP Board's certification requirements are amended from time to time. In March 2010, CFP Board adopted a new “Financial Plan Development Course” requirement. Future applicants must take a new course that demonstrates the ability to deliver professional and competent financial planning services to the public.^[26] This "Capstone" course requirement took effect for all students with matriculation dates after January 1, 2012, and for those who apply for "Challenge" status after March 2012;^[27] with changes announced in December 2014.^[28]

Code of Ethics and Standards of Conduct

Individuals who hold CFP certification commit to CFP Board to uphold the standards outlined in the Code of Ethics and Standards of Conduct (Code and Standards).^[29]

CFP Board adopted its first code of ethics in 1986. Since then, it has periodically revised the organization's professional and ethical standards. In 2008, CFP Board's Board of Directors adopted a set of revisions that included a non-negotiable fiduciary standard of care for financial planning services.^[30] This meant that CFP professionals were required to commit to CFP Board, as part of their certification, to act as a fiduciary, and therefore in the best interests of their client, when providing financial planning or material elements of financial planning.^[31]

CFP Board adopted its current Code and Standards in 2018. The cornerstone of these updated standards was the expansion of a CFP professional's fiduciary duty, which now applies at all times when a CFP professional is providing financial advice.^[2] Other key changes included more detailed standards for disclosing and managing material conflicts of interest, more comprehensive practice standards for the financial planning process and enhanced reporting requirements. The Code and Standards became effective on October 1, 2019, with CFP Board initiating enforcement of the revised standards on June 30, 2020.^[32]

CFP Board enforces the Code and Standards through a peer-reviewed process outlined in its Procedural Rules. The process includes:

• Written notice of the allegations and potential grounds for sanction.
• An opportunity to present documents, witnesses and arguments at a hearing before CFP Board's Disciplinary and Ethics Commission.
• The right to be represented by counsel of the respondent's choice.
• A written order from CFP Board's Disciplinary and Ethics Commission that sets forth the basis for the decision.
• The right to appeal to an Appeals Commission.^[33]

Disciplinary actions taken by CFP Board, in order of increasing severity, include private censures, public letters of admonition, suspensions, and permanent revocations.^[34]

CFP Board and the public

In 2006, the Board hosted its first Financial Planning Clinic in the Los Angeles area, allowing participant to attend workshops and hold private consultations with volunteer CFP professionals at no cost. After 2006, CFP Board hosted additional Financial Planning Clinics in Boston, Chicago, Detroit, Las Vegas, Miami, Oakland, San Francisco and Washington, D.C.^[35] The organization ended this program in 2010.

Through its current partnership with the Foundation for Financial Planning, CFP Board encourages CFP professionals to participate in pro bono service.^[36] CFP Board's Pro Bono Initiative connects expert CFP professionals to those people, families and communities in crisis or need. Together with the Foundation for Financial Planning, CFP Board provides CFP professionals with the training (CE credit eligible), resources and tools they need to be successful pro bono volunteers. The Foundation for Financial Planning then matches CFP professionals with volunteer opportunities.

In 2011, CFP Board launched its first public awareness campaign.^[37][38] The campaign used paid national advertising (a mix of TV, radio and online ads), social media and public relations efforts to promote the benefits of working with a CFP professional. CFP Board has continued to execute similar campaigns every year since, launching its latest iteration in March 2023.^[39] The organization has spent more than $150 million on the campaign over the last 10 years.^[40]

As part of these public awareness efforts, CFP Board launched a consumer education website called LetsMakeAPlan.org in 2011.^[41] The website provides financial education content for consumers at various stages of life, explaining what financial planning is, how the financial planning process works and the different types of financial advisors. The website also has a search tool that allows consumers to find a CFP professional near them.

Since CFP Board's structure changed to two affiliated organizations, the mission of CFP Board of Standards has evolved from “benefit the public by granting the CFP certification and upholding it as the recognized standard of excellence for competent and ethical personal financial planning” to “credential competent and ethical financial planners, uphold CFP certification as the recognized standard and advance the financial planning profession.” The organization's board of directors and senior leaders have stated that “the public benefit of CFP Board’s work remains paramount.”^[8]

Certifications, designations and degrees

The CFP mark is a "Board Certification" or professional designation offered to those who meet the requirements for certification (including passing the CFP exam). CFP Board does not award degrees or a diploma; however, CFP Board works with degree-granting educational institutions worldwide. CFP Board has a registered provider system of colleges that offer approved financial planning courses. Those Registered Programs that offer CFP educational courses are listed on CFP Board's website.^[42]