What is a Certified Financial Advisor?

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  • Written By: A. Gabrenas
  • Edited By: Jacob Harkins
  • Last Modified Date: 10 January 2020
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A certified financial advisor is an individual who has received special training to help people manage money. An advisor can often help people budget for major life goals, such as buying a home and retiring. He or she may also help people decided how and where to invest a client's money and what types of insurance to buy. While certification is not required to be a financial advisor, it is a helpful certification.

Most financial advisors have received an undergraduate degree, often in a finance-related subject such as business, accounting or economics. Once a person has this degree, he or she can usually become a financial advisor without any further training or certification. Certification, however, often makes the person more marketable in the job field and the private sector.

One of the most common and well-known types of certification for financial advisors is the Certified Financial Planner®, or CFP, certification. Advisors from countries all around the world may train and test for this certification. The process is fairly involved and generally has several steps.


Typically, to begin the process of becoming a certified financial advisor, a candidate must first meet certain prerequisites. For example, he or she usually must gain several years of work experience in financial advising or a similar field. Then, the advisor must usually meet certain education requirements beyond the basic undergraduate degree, such as completing a certain set of financial planning classes or obtaining a graduate degree in fields such as law and business.

Once these prerequisites are met, advisors can usually go on to take the official CFP® certification test. This test generally lasts several hours and covers a wide range of topics, including budgeting, retirement planning, income tax planning and investing in stocks and bonds. Once an applicant passes the exam, he or she must usually undergo a background check. Upon successful completion of that and payment of required fees, an individual will usually be granted CFP® certification and become a certified financial advisor.

The job of a certified financial advisor may be quite varied. Some may work for financial organizations, such as banks, while others may work privately as a fee-based advisor. In addition to advising people about insurance and investing matters, some certified financial advisors may also sell insurance or stocks and bonds. Generally, additional licenses or certifications are required to sell such products. Advisors can also help with everyday spending habits and short-term savings goals.



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