The Pros and Cons of Chartered Financial Analysts and Certified Financial planners

What is a Certified Financial Planner (CFP)? 

Planning for a successful financial life is an uphill battle for many. Despite having a good income source, we end up having nothing at the end. The problem extends when we get into a situation where we are in serious need of money. The problem occurs due to the inefficiency and illiteracy of our finances.

So, are we going to face the same situation throughout our lives? No!

Because you have certified financial planners, or CFPs, who plan your finances for you. 

A CFP, or Certified Financial Planner, is a person who has knowledge of financial planning. They master the areas of financial planning, taxes, insurance, real estate, and retirement savings. The Certified Financial Planner Board of Standards brands and awards them.

  • To get recognition from CFP, they must pass the exam and adhere to the code of ethics designed by the board.

  • A CFP candidate must possess either 6000 hours of professional planning experience or 4000 hours of apprenticeship experience under the direct supervision of a CFP professional.

  • The ethical code of conduct of the CFP board determines that a CFP must make decisions keeping in mind the interests of their clients. 

What does a certified financial planner do?

A CFP is proficient in risk management, investment, tax, retirement, income, and estate planning. They make a plan to reach your financial goals. They discuss your current financial objectives and your risk tolerance. They suggest retirement planning, saving, investing, and managing debts. 

Some CFPs even hold a specialty in retirement planning, long-term investment, etc. 

A financial planner follows three specific duties or fiduciary duties:

  • Duty of Loyalty

  • Duty of Care

  • Duty to follow client instructions

CFP vs. CFA: Are they the same?

CFP stands for Certified Financial Planner, and on the other side, CFA means Chartered Financial Analyst.

CFAs are professionals who are recognized by the CFA Institute. They are specialists in investment analysis and wealth management. They are experts in financial research, portfolio management, investment consulting, risk analysis, and risk management. They work for large investment firms. They also conduct economic investigations for businesses other than the investment industry.

Who is eligible for CFP certification?

A person who meets the criteria mentioned below is eligible for CFP certification. 

  • Formal Education: A candidate must hold a bachelor’s degree or higher from a recognized university or college.

  • CFP exam: A candidate must pass a CFP exam or have financial designations like chartered financial analyst, certified public accountant, or Master of Business Administration.

  • Professional work experience: A candidate must have at least 6,000 hours of full-time professional experience in a similar industry or 4,000 hours of apprenticeship experience under a CFP. 

  • CFP Board’s standards of professional conduct: A candidate must always adhere to the standards of professional conduct designed by the CFP Board. CFP boards conduct a background check on all the candidates before certification. 

How much does a CFP cost?

Due to the cost associated with hiring a CFP, many people don’t prefer to choose a certified one. 

  • According to a survey conducted by Kitces Research in 2020, the CFPs charge, on average, $1,800 or $2,500 for a comprehensive financial plan, $250 for hourly service, and $4,000 for a flat-fee service.

  • According to Fobes, a survey conducted in 2018 revealed that Financial planners charge $235 per hour; for a comprehensive plan, they charge an average of $1,871. The average fee you pay to a financial planner in a year is $5,528. 

Who should choose a CFP?

 CFPs might not be a cost-effective option for many, but having one makes sense, especially for those who find it challenging to manage their finances. 

  • They help you craft a budget. If your financial goals are high, but you need more money, CFPs are the best choice.

  • If you have a complex financial life, like a business, massive debt, or multiple investments not providing good returns, you better choose a CFP.

Where can I find a CFP? 

To find a CFP, take advantage of the online financial advisor database. The Certified Financial Planner Board of Standards helps you find the right CFP. 

How does a CFP earn money?

CFPs earn money based on their status. Some are fee-only, and some are fee-based CFPs.

  • Fee-based: Some receive commission. Sometimes, you pay the commission if your CFP is also a broker, and sometimes, the insurance companies might pay for recommending their product. 

  • Fee-only: Their income is dependent on the relationship with the clients. They make sure all their recommendations and advice work in your favor. 

CFA vs. CFP: Differences and Which is Right for You? 

We often get confused between CFA and CFA; which is better? 

They are both different. A CFP is a certified financial planner, while a CFA is a chartered financial analyst. They hold various certifications according to their qualifications.

  • CFP works with individuals, like retail clients, and helps them achieve their financial goals. They make a plan for their clients for investing, retirement, or debt repayment. 

  • CFA works for large corporations. They deal with financial reporting, analysis, and portfolio management. They trade in financial products like derivatives and mutual funds.

If you are an individual, you have the choice of a CFP, as they are experts in financial planning and can make a comprehensive plan for you to accomplish your financial goals. 


A certified financial planner (CFP) is a professional who plans for their finances. They are experts in investment, retirement savings, debt management, etc. To become a certified financial planner, they go through a process of acquiring a high level of education, professional work experience, and standards of professional conduct. People often need clarification on CFA and CFP. They both are different and possess distinct knowledge in the field. One is concerned with the finances of individuals. At the same time, the other is more interested in analysing the finances of giant investment firms.

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Olivia Johnson 29 Oct, 2023


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