ChFC vs. CFP®: What’s the Difference?

Financial advisors can pursue a variety of professional designations to demonstrate their knowledge and expertise, and the Certified Financial Planner™ (CFP®) and Chartered Financial Consultant (ChFC) are two prominent options. While the credentials cover many of the same financial planning topics, they have different requirements, governing organizations and areas of emphasis.

Consider finding your own financial advisor if you’re looking for help with your specific financial situation.

What Is a CFP®?

The CFP® designation remains the most widely known certification for financial planning. It is awarded by the Certified Financial Planner™ Board of Standards. There are four requirements to receive the designation: education, a comprehensive exam, work experience and ethics. Here is an explanation of each of the four “E’s”.

• Education: CFP® professionals receive a rigorous education in financial planning. You must hold at least a bachelor’s degree from an accredited college or university to begin the initial coursework in a CFP Board-approved program. Then you must complete approved courses that cover topics including retirement, estate planning and insurance. The education doesn’t stop once you’re certified. To maintain the certification, you must complete 30 continuing education (CE) programs every two years (this requirement rises to 40 hours in 2027).
• Exam: After the education portion, you must take a CFP® exam. This exam is taken in multiple parts over a single day, and covers financial planning, professional conduct and ethics. Passing this exam shows that you’re qualified to develop financial plans, provide useful recommendations and handle client-advisor relationships.
• Experience: You must also complete 6,000 hours of professional experience related to financial planning or 4,000 hours through an apprenticeship that meets CFP Board requirements to earn the certification.
• Ethics: Lastly, the ethics requirement consists of a background check and a standards code. Before granting you the certification, the board reviews any potential violations, like previous misconduct. This is to ensure that you adhere to the standards of the CFP Board. Being able to follow the rules of conduct and exhibit professionalism are keys to being a successful financial advisor.

Once you meet the “four E’s” you may receive your CFP® certification. Holding a CFP® certification demonstrates to clients that you are knowledgeable in financial planning and have achieved the high standards enforced by the CFP Board.

What Is a ChFC?

In 1982, the ChFC designation was introduced as an alternative to the CFP®. It’s awarded by the American College of Financial Services in Bryn Mawr, Pennsylvania. The ChFC may be lesser known than the CFP®, but it still stands as a distinguished certification in financial planning. The biggest difference between the two is the process of becoming certified.

The education portion for a ChFC is lengthier, comprising eight college-level courses. But at the core, the education is similar to the CFP® coursework. Courses focus on financial planning, covering topics like investing, insurance planning and retirement planning.

These courses are self-paced and can be done online. Rather than a single, comprehensive exam, the ChFC requires candidates to pass eight exams held at the end of each course.

You can enroll in the program at any time, although you need at least three years of financial planning experience (or a related profession) in order to receive the credential. You must also agree to a professional pledge and follow a code of ethics.

Like the CFP®, you must continue to earn CE credits to maintain your designation. This involves taking courses and participating in programs to keep you current on financial planning practices.

CFP® vs. ChFC: What’s the Difference?

In practice, Certified Financial Planners (CFP®) and chartered financial consultants (ChFCs) aren’t all that different. The differences lie more in what’s required to earn each certification. The ChFC designation requires more coursework, but both credentials require candidates to study the same basic topics.

A CFP® is required to take seven courses, while a ChFC must take eight courses, one of which focuses on contemporary applications of financial planning. While a CFP® professional must take a comprehensive board exam after completing all coursework, the ChFC requires candidates to pass a proctored exam at the end of each course (eight in total). However, both must have a minimum level of professional experience and uphold the high ethical standards required by each issuing organization.

Financial advisors who work in financial planning may hold either credential, and some may even hold both. The coursework overlaps so much that a CFP® candidate who has earned the ChFC credential is exempt from the CFP Board’s coursework requirement.

Ultimately, both CFP® practitioners and ChFC charter holders can advise clients on how to achieve their financial goals and manage their finances.

ChFC vs. CFP®: Which One Is Better for Financial Planning?

Naturally, you might wonder which type of certification makes an advisor more qualified in financial planning. From a client standpoint, there is not much of a difference between advisors with these two different certifications. Some financial advisors even have both designations. Both issuing organizations maintain high standards and the CE requirement shows that both advisors adapt to the times. Because the CFP® is more common, you are more likely to find someone with a CFP® designation than a ChFC designation.

That said, the CFP Board and the American College feel that the differences between their designations do exist. For example, the CFP Board stresses that it holds its designees to a fiduciary standard, while the American College does not. (Keep in mind that ChFC charter holders who are registered as investment advisers with the SEC are already held to a fiduciary duty.)

It also argues that its comprehensive exam requires CFP® practitioners have a deeper and better command of the subject matter. On the other hand, the American College asserts that its coursework is more up-to-date and that it requires the additional course of modern day financial planning.

How to Compare a CFP® and ChFC

A CFP® or ChFC designation demonstrates that an advisor has completed extensive education and met professional standards, but those credentials alone don’t tell you whether the advisor is the right fit for your financial needs. Two advisors with different designations may provide similar services, while two advisors with the same designation may have very different areas of expertise.

One of the first questions to ask is what types of clients the advisor typically serves. Some advisors focus on retirees building retirement income strategies, while others primarily work with business owners, executives or young families. An advisor who regularly works with clients in situations similar to yours may be better equipped to address the financial decisions you’re facing.

It’s also important to understand how the advisor is compensated. Some CFP® and ChFC professionals charge a flat planning fee or an annual percentage of assets under management, while others may earn commissions on certain insurance or investment products. Understanding the fee structure can help you compare costs and better understand how the advisor delivers their services.

Finally, ask what services are included in the relationship. Some advisors primarily manage investment portfolios, while others provide ongoing retirement, tax, estate, insurance and cash flow planning. The designation reflects an advisor’s qualifications, but the scope of services, experience and planning approach often have a greater impact on whether they’re the right long-term partner for your financial goals.

If you’re choosing between a CFP® professional and a ChFC and their qualifications, services and fees are otherwise similar, the decision may come down to personal fit. Consider which advisor you feel most comfortable speaking with, who communicates clearly and who seems to understand your goals and concerns.

Bottom Line

From a client standpoint, the differences between a ChFC and CFP® may be relatively minor. Both designations require financial planning education and professional experience, although their certification requirements differ. When choosing an advisor, it may be more useful to consider the individual’s experience, services, fees and approach to financial planning rather than focusing only on which designation they hold.

“ChFC and CFP credentials cover much of the same material, and either may be a good indicator that your advisor has a firm foundation of knowledge in financial planning,” said Brandon Renfro, CFP®.

Brandon Renfro, CFP®, RICP, EA provided the quote used in this article. Please note that Brandon is not a participant in SmartAsset AMP, is not an employee of SmartAsset and has been compensated. The opinion voiced in the quote is for general information only and is not intended to provide specific advice or recommendations.

Tips for Finding a Financial Advisor

• Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
• Talk to at least three advisors before choosing one. That way, you’ll have enough context about fees and strategies to make an informed decision.
• Ask if they are bound by a fiduciary duty to put their clients’ interests before their own. This is always the case for CFPs®, who are also fee-only financial advisors. Advisors who are also brokers or insurance agents tend, instead, to be required only to recommend what’s suitable.

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