Untangling the Confusion: CFPs vs. Financial Advisors

January 12, 2024

Most of us are familiar with the term financial advisor. Then there’s the term financial planner, which has also become more well-known in recent years. But what about a CFP® or a Certified Financial Planner? Some may not understand the difference between a financial advisor and a financial planner, let alone a CFP®. So, let’s simplify and clarify what these terms mean, and what sets CFPs apart from other financial professionals.

First off, a financial advisor is any professional who helps you manage your finances. This can include insurance agents, investment brokers, financial planners, and more. They’re often paid a commission based on the products or services they sell. However, a financial planner is typically more comprehensive and works with clients to develop a financial plan that incorporates all aspects of their finances, including investments, taxes, retirement, and estate planning.

So where does a CFP® come into play? The main difference between a CFP® and a financial advisor or planner is the level of education and experience required to use the title. A CFP® must complete coursework approved by the CFP Board and pass a rigorous exam covering a wide range of personal finance topics, including investments, taxes, retirement, insurance, and estate planning.

To become a Certified Financial Planner (CFP®), professionals must not only possess the necessary knowledge and skills, but also adhere to a strict code of ethics. This code sets the standards for ethical conduct and professionalism in the financial planning industry. CFPs are required to act in the best interests of their clients, providing objective and unbiased advice. It sounds odd to say, but other financial advisors are not held to this ethical standard.

CFP®s also specialize in creating comprehensive financial plans that help clients achieve their long-term financial goals. While financial advisors may provide investment or insurance advice, CFP®s can offer advice on all aspects of personal finance, including investments, taxes, insurance, retirement, and estate planning. CFP®s are trained to look at the big picture and work with clients to develop a customized plan that considers their unique goals and situation.

In summary, while financial advisors and planners can offer valuable advice on specific aspects of personal finance, a CFP® goes beyond to provide comprehensive financial planning services and adheres to a strict code of ethics. They have completed stringent education requirements and can provide a deeper level of expertise to help clients achieve their long-term financial goals. When working with a CFP®, clients can feel confident that they’re receiving unbiased advice and personalized recommendations based on their specific needs and objectives.

Ready to take control of your financial future? Contact us to speak to a Certified Financial Planner (CFP®) who is dedicated to helping you achieve your long-term financial goals.

Live free of financial stress.