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Do I need a CFP?

You need a registered adviser or a broker for the account you are opening. A CFP mark is an added planning standard. The letters do not replace Form ADV.

The short answer

You need the registration that matches the account. An advisory account belongs with a firm on Form ADV. A brokerage recommendation belongs with a person you can find on BrokerCheck. A CFP mark is an added standard for planning, run by CFP Board. Prefer the letters when you want a written household plan and you want that group's rules on top of the license. The letters do not replace the filing, and they do not set the fee.

CFP Board also publishes a fiduciary standard for CFP professionals when they give financial advice. That is the certifying group's rule. It is not the government license. CFP vs CFA compares the two marks. This page is whether you need the CFP mark at all.

You are trying to buyThe check that matters firstWhere the CFP mark helps
A written plan for the householdFirm on IAPD, scope in the contractA common standard for planning work
Someone to manage the portfolioForm ADV Item 5G and Item 5EOptional. A CFA charter is the other mark people cite for analysis
A product a broker sellsBrokerCheck and Form CRSThe mark does not change the brokerage standard
A tax returnA CPA or another tax preparerA CFP is not a substitute for the person who signs the return

What to do

  1. Write the deliverable. If it is a plan, the CFP mark is worth checking. If it is only a fund portfolio, do not pay extra, in time or in fee, for letters you will not use. Advisor vs financial planner splits those deliverables.
  2. If they say CFP, look up the person on cfp.net. A line on a website is not the directory. If the directory does not show them, ask why before you go on.
  3. Open the firm on Search and on IAPD. The RIA is the firm. The person is an adviser there, a broker, or both. How to check registration is the order.
  4. Open BrokerCheck if the person has a CRD for brokerage. A CFP professional can also be a broker. The mark does not close that file.
  5. Read Item 5E and the fee section. The letters do not cap the percent. Get the dollars from the cost page method: rate times your balance, labeled as arithmetic, not as a typical fee.
  6. If the job is investment analysis of a portfolio you already understand, ask whether a CFA charter is the mark they actually hold, and confirm it with CFA Institute. If the job is the tax return, ask for the tax preparer. Do not stack letters in place of the person who does that job.

What to look for on Best Investors

  • Designations on the person page. Treat them as a claim you verify at the issuer. CFP at cfp.net. CFA at CFA Institute.
  • Item 5G(1). Financial planning services are the checkbox closest to the reason people look for a CFP. A Yes still needs your name in a contract.
  • Item 5B(2) and Item 6A. A planning mark and a broker registration can sit on one person. The advice firm reports that overlap here.
  • The firm page before the biography. The biography is where the letters are marketed. The firm page is where the duty and the fee method are filed.

Common mistakes

  • Hiring the letters and skipping IAPD. The mark is not the registration.
  • Refusing a planner who is not a CFP when the registration is clean and the deliverable is clear. The letters are a plus for planning work, not a law that a plan must carry them.
  • Assuming every CFP is fee-only. Commission work can exist beside the mark. Item 5E(5) and the brochure are the check. Fee-only vs fee-based explains the labels.
  • Treating CFP Board's fiduciary standard as if it rewrote the brokerage account. On a brokerage recommendation to a retail customer, Regulation Best Interest is still the government rule. Get the account type in writing. The fiduciary check is the email.
  • Using "CFP" as a search word and never reading Item 11. The mark and a disclosure can both be true. Read the disclosure.

Related questions

What does the CFP exam cover that the license does not?

The mark is education, an exam, experience, and an ethics requirement set by CFP Board, aimed at planning. The license is the registration that lets the firm give advice for pay, or the person sell securities. You can have either one without the other. Check the one you are relying on.

Is a CFA better?

It is better for the job it was built for: investment analysis. It is not a better planning mark, and it is not a better registration. Pick the mark that matches the deliverable, then pick the registration that matches the account.

Do I need a CFP to make a financial plan for myself?

No. You need the plan to be specific enough that you will follow it. Hire a CFP, or any registered adviser, when you want a second person to put the numbers in a document and sign their name to the advice.

Are the letters a reason to pay 1%?

No. One percent of $500,000 is $5,000 this year, as arithmetic of that quote, not as a standard price for a CFP. Pay for the work. The letters are a screen, not a rate card.

Limits

This page does not say you must or must not hire a CFP. It is not legal or investment advice, and Best Investors is not CFP Board or the SEC.

We do not award the mark, and we do not update cfp.net. If that directory and a biography disagree, believe the directory until the person explains the mismatch. Form ADV is what the firm filed. If our copy and IAPD disagree, use IAPD.

Sources

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