What's the Difference Between a CFP and ChFC?

What Is a CFP?

CFP stands for Certified Financial Planner. A CFP® professional is someone who has met the CFP Board’s extensive requirements to earn the right to put the initials “CFP” after his or her name. It signifies that he or she has taken courses in personal finance, completed years of qualifying work experience in financial planning, passed a comprehensive examination covering all aspects of financial planning, and demonstrated an understanding of ethics. CFPs specialize in all areas of personal finance, from determining how much money you need to retire comfortably to helping you choose the right life insurance policy. CFPs best work with people who already have some investment knowledge and want to give their financial affairs over to someone else. Most CFPs are also Chartered Financial Consultants (ChFC) or an equivalent designation, which means they have gone that extra step toward specialization in issues like taxes, real estate, and insurance.

What Is a ChFC?

A ChFC stands for Chartered Financial Consultant. To become a Chartered Financial Consultant one must meet additional stringent requirements beyond earning the CFP®, including completing college-level coursework in specialized areas such as investments, tax strategies for business owners, insurance products and risk management tools, and meeting the experience requirements. ChFCs specialize in financial planning for individuals and businesses. They can help you with issues such as retirement planning, estate planning, risk management, and more. ChFCs work best with clients who have a significant amount of investment knowledge and want to give their financial affairs over to someone else.

Similarities Between CFP and ChFC

Both the Certified Financial Planner (CFP) designation offered by the Certified Financial Planner Board of Standards, Inc., and the Chartered Financial Consultant (ChFC) designations offered by The American College are widely recognized as marks of excellence in personal financial planning. In addition, both require many hours of study and professional experience before candidates may sit for the exams that lead to certification. Both designations require significant knowledge, work experience, and education in financial planning. The designation holder must pass both a comprehensive competency exam covering all aspects of financial planning as well as an ethics exam. Both designations indicate that their holders have proven expertise in personal financial planning.

Differences Between CFP and ChFC

The most significant difference between the CFP and ChFC designations is that the ChFC designation requires college-level coursework in specialized areas such as investments, tax strategies for business owners, insurance products, and risk management tools. The CFP Board does not require this level of coursework, but it does require CFPs to have a certain amount of work experience in financial planning and to pass a comprehensive exam on all aspects of personal finance. In terms of the volume of coursework, a CFP is to undergo seven courses while a ChFC candidate is to complete nine courses. A comprehensive board exam is also required for a CFP after completing all required coursework. On the other hand, a ChFC has exams to take at the end of each course. Another key distinction is that the ChFC designation is geared more toward working with clients who have significant investment knowledge, whereas the CFP designation is available to anyone who meets the certification requirements, regardless of the level of investment expertise.

The Bottom Line

Both the CFP and ChFC designations are widely recognized as marks of excellence in personal financial planning. They indicate that their holders have proven expertise in personal financial planning and have met stringent requirements in terms of education, experience, and ethics. If you are looking for a designation that indicates greater specialization in investment planning, then the ChFC may be a better choice for you. If you are looking for a designation that is more broadly based and available to anyone with the requisite knowledge and experience, then the CFP is a better option.

Coursework refers to college-level classes that help you meet certification requirements. These classes may be in specific areas, like investments or risk management, or cover all aspects of personal finance.
A comprehensive board exam is an exam designed to test your knowledge of all aspects of financial planning after you have completed your coursework.
Yes, there are many financial advisors who do not have any of the designations mentioned in this article. However, these designations can indicate that the advisor has met certain requirements in terms of education and experience, and has passed an ethics exam.
As stated above, the knowledge required for each designation varies. While both designations indicate expertise in personal financial planning, if you have a greater interest in investment strategies, a ChFC may be a better choice for you. On the other hand, if you are looking for a more broadly-based certification that is available to anyone who meets the requirements, then the CFP is a better option.
Yes, it is possible to obtain both the CFP and ChFC designations. However, this would require meeting all the requirements for both designations, including completing the required coursework and passing the corresponding exams.

True Tamplin, BSc, CEPF®

About the Author
True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.