When it comes to building a successful career in financial planning, choosing the right certification can play a crucial role in shaping your future.
The ChFC (Chartered Financial Consultant) and CFP (Certified Financial Planner) are two of the most respected credentials in the financial planning industry, each offering a distinct approach to financial planning.
But how do they differ, and which one aligns better with your career goals?
In this article, we’ll outline into the key differences between CFP vs ChFC, helping you understand which certification might be the best fit for your aspirations. Let’s break it down and guide you through the decision-making process.
Overview of CFP and ChFC
What is a CFP?
A CFP (Certified Financial Planner) is a prestigious professional designation recognized globally for individuals who specialize in providing personal financial advice. The designation is run by CFP Board in the US, and managed by Financial Planning Standards Board (FPSB) in 27 countries outside the US.
The CFP certification focuses on developing comprehensive financial plans for individuals and families, covering areas such as retirement planning, estate planning, tax management, and investment strategies.
To become a CFP, candidates must meet specific education requirements, pass a rigorous exam, and gain relevant work experience in financial planning. Please refer to our article on the “4Es” of CFP requirements for more details.
For professionals dedicated to providing comprehensive, client-centric financial planning, the CFP designation is often considered the benchmark. It’s a powerful credential for those looking to establish deep, lasting relationships with clients in the financial advisory space
What is a ChFC?
A ChFC (Chartered Financial Consultant) is a professional designation awarded by The American College of Financial Services, an online university. It is designed for individuals who want to specialize in comprehensive financial planning, offering expertise in areas like retirement planning, estate planning, tax strategies, and investment management.
To earn the ChFC designation, candidates must complete a series of 8 college-level courses and pass the respective courses’ exams. A minimum educational prerequisite of high school diploma is sufficient to obtain a ChFC, which differs from CFP certification.
Key differences between CFP and ChFC
Education requirements
One of the key differences between CFP vs ChFC is the educational requirements.
The CFP designation requires a bachelor’s degree (in any field) and the completion of a CFP Board-Registered Program. This ensures standardized coursework covering the 6 core areas of financial planning.
The ChFC, while strongly recommending a bachelor’s degree, does not mandate it. Instead, candidates must complete a series of 8 college-level courses covering similar financial planning topics.
While both paths demand significant study, the CFP’s degree requirement and structured program provide a more standardized and comprehensive educational foundation.
Curriculum and focus areas
Both the CFP and ChFC designations provide a strong foundation in financial planning, but their curricula differ in focus and structure.
The CFP curriculum is designed to prepare professionals to deliver comprehensive financial planning services directly to individuals and families. It covers a broad range of personal finance topics, from retirement and estate planning to tax strategies and investment management, emphasizing a client-centered approach and the financial planning process itself.
The CFP Board mandates specific knowledge areas and requires coursework at a CFP Board-Registered Program, ensuring a standardized level of knowledge and testing candidates’ ability to integrate knowledge across all areas.
The ChFC curriculum, while covering similar core areas, offers more flexibility in course selection and often explores advanced financial planning techniques and specialized topics in greater depth.
This makes the ChFC a good choice for those seeking expertise in specific areas, such as retirement income strategies or business planning, and who may work in consulting or financial institutions.
While both designations require a strong understanding of financial principles, the CFP emphasizes client interaction, the financial planning process, and holistic planning, while the ChFC emphasizes advanced technical knowledge and offers more flexibility in curriculum.
Exam requirements
The CFP and ChFC certifications both require rigorous testing, but their exam structures reflect their different focus.
The CFP certification culminates in a comprehensive, 6-hour exam covering all core financial planning topics. This exam not only tests knowledge of individual areas like retirement planning or investment management but also the ability to integrate that knowledge in a client-focused context.
The ChFC program, on the other hand, assesses knowledge through a series of 8 exams taken at the end of each required course. These individual exams often delve into specialized areas of financial planning, allowing candidates to demonstrate deep expertise within specific niches.
Thus, while both certifications require a strong understanding of financial principles, the CFP exam consists of one comprehensive exam testing breadth, integration, and client application; whereas ChFC has a series of exams testing depth and specialized knowledge within individual financial planning subjects.
Experience requirements
The CFP and ChFC designations both require three years of experience in the financial services industry, but the type of qualifying experience differs.
For the CFP, candidates must demonstrate 6,000 hours (or three years) of professional experience in financial planning activities directly involving clients. This client-facing experience must include developing and implementing personalized financial plans, covering areas like retirement, estate planning, investments, and insurance.
The ChFC, while also requiring three years of experience, allows for a broader range of qualifying roles. Direct client interaction is not a mandatory component for all ChFC experience. Experience in areas like financial analysis, wealth management, insurance, or retirement planning can be accepted, even if it doesn’t involve direct, comprehensive planning for individual clients.
Thus, while the CFP is often the preferred path for those primarily focused on direct client interaction and holistic planning, the ChFC offers a pathway for those in roles requiring specialized expertise or work within financial institutions, even if they also work directly with clients.
Ethics and Continuing Education (CE)
Ethical conduct and continuing education are crucial for both CFP and ChFC designations, but their approaches differ.
CFP professionals are held to the CFP Board’s Code of Ethics and Standards of Conduct, a comprehensive set of rules that includes a fiduciary duty, requiring CFPs to prioritize their clients’ best interests.
CFPs must also complete 30 hours of continuing education every 2 years, including specific ethics coursework, ensuring they stay current with regulations, tax laws, and best practices.
ChFC professionals are expected to uphold ethical principles and are subject to The American College’s Code of Ethics. However, the ChFC does not have a separate, formally defined fiduciary standard like the CFP.
While continuing education is required for ChFCs, the requirements are less structured and specific compared to the CFP’s 30-hour mandate.
Therefore, while both designations value ethical behavior, the CFP has a more formalized and rigorously enforced ethical framework, including a fiduciary standard, and more specific continuing education requirements.
Career opportunities
The CFP and ChFC designations provide a strong foundation for a range of careers in the financial services industry. Many career paths are accessible with either designation, including roles such as financial planner, wealth manager, investment consultant, retirement planner, estate planner, and insurance advisor.
However, the emphasis within these roles and the typical client focus can vary.
CFPs, with their training in holistic financial planning, often focus on providing comprehensive financial advice to individuals and families. They help clients navigate various life stages and financial goals.
ChFCs, with their in-depth knowledge of specialized areas, may focus on specific client segments, like high-net-worth individuals or business owners, or work in areas like advanced retirement income planning, business valuations, or complex insurance strategies. They might work in consulting roles, within financial institutions, or directly with clients. The ChFC’s specialized expertise makes them well-suited for situations requiring advanced technical knowledge.
Exam difficulty and recognition
When comparing recognition and difficulty, the CFP and ChFC have distinct characteristics.
The CFP designation generally enjoys broader, global recognition among the public and within the financial services industry. This greater visibility is likely attributable to the CFP’s longer history, the CFP Board and FPSB’s marketing and public awareness campaigns, and the designation’s emphasis on client-facing financial planning roles.
The ChFC is well-respected within the financial planning industry, but it typically has less recognition outside of financial services industries.
Perceptions of difficulty are subjective, but the CFP exam, a comprehensive, 6-hour test covering all aspects of financial planning, is often considered more challenging. This is partly due to the exam’s emphasis on integrating knowledge from different financial disciplines.
The ChFC, with its series of end-of-course exams, allows candidates to focus on mastering individual subjects before moving on. However, both designations require substantial preparation and a deep understanding of financial planning principles.
CFP vs ChFC: Summary of key differences
| Category | CFP (US only) | ChFC |
|---|---|---|
| Minimum Educational requirements | Bachelor’s degree. See details on full CFP requirements here. | High school diploma or equivalent |
| Study Areas | 7 core topics: Financial Planning Process, Risk Management and Insurance Planning, Investment Planning, Tax Planning, Retirement Savings and Income Planning, Estate Planning, and Professional Conduct. | Similar core topics, with potential for specialization in areas like retirement income strategies, business planning, or wealth management. |
| Number of exams | One comprehensive, 6-hour exam with 170 multiple-choice questions (stand-alone, scenario, case study). | Series of exams, one per course (typically 8 courses). Format typically includes multiple-choice and written assessments, but can vary by course. |
| Exam Frequency | For US: 3x a year in March, July, and November. Other countries’ rules vary. See CFP exam dates article for more info. | ChFC exams are generally available through the course provider at any time during the year. |
| Exam Format | Multiple choice questions only: featuring stand-alone, scenario, and case study based questions. | Multiple choice questions and written assessments. |
| Pass Rates | The range of CFP pass rates since 2022 is 62-68%. | The range of ChFC pass rates varies, typically around 65%-75%. |
| Fees and Costs | Standard route costs $4,000-$11,000 all in. Accelerated route (coursework exemption except Capstone) is around $2,000-$4,000. See CFP exam cost article for more details. | Course fees typically range from $5,000-$7,000 depending on the provider. |
| Study Hours Needed | Around 250-300 hours. | Around 300 hours for the full program. |
| Experience Requirements | 6,000 hours professional experience in financial planning activities directly involving clients, or 4,000 hours apprenticeship experience. | Typically requires 3+ years of experience in the financial services industry (client-facing not required for all experience). |
| Ethics | Adherence to CFP Board’s Code of Ethics and Standards of Conduct, including fiduciary duty. | Adherence to The American College’s Code of Ethics. No formally defined fiduciary standard like the CFP Board. |
| Career Focus | Holistic financial planning for individuals and families. | Specialized financial planning, consulting, institutional roles, or client-facing roles. |
| Exam Difficulty | Often perceived as more challenging due to the comprehensive nature and emphasis on integrating knowledge across all financial planning areas. | May be perceived as less challenging due to the course-by-course exam structure, but still requires significant study and expertise within each subject. |
| Recognition and reputation | Generally greater public and industry recognition; often considered the “gold standard” for financial planning. | Respected within the US financial planning industry, but less widely known among the general public. |
CFP or ChFC: Which designation is right for you?
Choosing the right financial planning designation depends on your career goals and learning style.
- CFP – The Holistic Planner: The CFP is often the preferred choice for those who want to build long-term relationships with individual and family clients, providing comprehensive financial guidance. The CFP Board’s rigorous curriculum and emphasis on the financial planning process equip CFPs with the skills to analyze client situations holistically and develop tailored strategies. The CFP’s global recognition also offers career advantages, especially in client-facing roles.
- ChFC – The Specialized Expert: The ChFC is a strong option for professionals who want to develop deep expertise in specific areas of financial planning. The flexible curriculum allows for specialization in areas like retirement income strategies, business planning, or wealth management. This makes the ChFC well-suited for those working in consulting, financial institutions, or those who work with high-net-worth individuals or businesses requiring specialized knowledge. Worth noting that if you don’t currently (or plan to) have a Bachelor’s degree, ChFC has a lower barrier to entry to start a financial planning career.
- Accelerated Path to CFP for ChFC Holders: By the way, the ChFC designation can provide a significant advantage for those who later decide to pursue the CFP. The CFP Board offers an accelerated path for certain designations, including the ChFC. This allows ChFC holders to be exempt from the CFP Board-Registered Program coursework requirement, saving both time and money.
Hope you found the thorough comparison above helpful. Which qualifications did you decide to go for and why? Let me know in the comments below!
Meanwhile, you may find these related articles of interest:
