This article examines the key differences between a Certified Financial Planner (CFP) and a Financial Advisor, highlighting their respective credentials, responsibilities, and professional standards. The Financial Advisor Training Institute (FATI) offers a streamlined 14-week* program that equips you with the essential skills to start your career as a Financial Advisor. Whether you’re aiming to become a Financial Advisor or pursuing specialized credentials like the CFP, FATI’s results-focused training will give you the foundation needed to succeed in this growing industry.
Understanding the Core Differences Between CFPs and Financial Advisors
The terms Financial Advisor and Certified Financial Planner (CFP) are often used interchangeably, but they can represent different levels of qualification and responsibility. The distinction matters because it directly impacts the types of financial guidance a client might receive from you and the career path you might choose as a professional.
- Regulatory Oversight: While the title Financial Advisor is broad and largely unregulated, the CFP is a protected designation that requires certification through the CFP Board. According to LegalZoom, “The term Financial Advisor is unregulated and refers to a professional who can help people manage their finances and make smarter moves with their money.” [1]. Although the term Financial Advisor may be unregulated, the licensing and registrations required to be a full-blown Financial Advisor is very regulated.
- People can hold themselves out to be a Financial Advisor if they are only a licensed life insurance agent. People can hold themselves out to be a Financial Advisor if the only possess a Series 65 registration and are a Registered Investment Advisor but that is a small minority of those who call themselves a Financial Advisor. The norm, in today’s world, is that a REAL Financial Advisor holds a state life insurance license, holds the SIE registration as well as the Series 7 and 66 registrations.
- Education Requirements: There are two components to the education requirement for CFP’s.
As part of earning your CFP® certification, you’ll need to complete college or university-level coursework through a CFP Board Registered Program. You’ll become well-versed in these major personal financial planning areas: Professional Conduct and Regulation, General Principles of Financial Planning, Risk Management and Insurance Planning, Investment Planning, Tax Planning, Retirement Savings and Income Planning, Estate Planning, Psychology of Financial Planning, Financial Plan Development (Capstone Course).
You must verify that you hold a bachelor’s degree or higher from an accredited college or university (accreditation must be recognized by the U.S. Department of Education at the time the degree is awarded) to fulfill the second part of the CFP® certification education requirement. The degree may be in any discipline, and must be completed either before you pass the CFP® exam, or within 5 years after you pass it.
Exam
Passing the CFP® exam demonstrates that you’ve attained the knowledge and competency necessary to provide comprehensive personal financial planning advice. The CFP® exam is a 170-question, multiple-choice test that consists of two 3-hour sessions over one day. The exam includes stand-alone and scenario-based questions, as well as questions associated with case studies.
Experience
The experience requirement prepares you to provide personal financial planning to the public without supervision. You can fulfill the experience requirement either before or after you take the exam. You need to complete 6,000 hours of professional client-facing experience related to the financial planning process.
Fiduciary Responsibility: CFPs are legally bound to a fiduciary standard, meaning they must always act in their clients’ best interests. Some non-certified financial planners operate under only a suitability standard, which is less stringent. “CFPs are legally required to uphold their fiduciary duty. This means they must put your interests ahead of their own, even if it means they’ll earn less money in the long run.” [1]
Ethics
The ethics requirement is the final step on your path to CFP® certification. It indicates you’ve agreed to adhere to high ethical and professional standards for the practice of financial planning, and to act as a fiduciary when providing financial advice to your client, always putting their best interests first.
Scope of Services: CFPs typically provide more detailed, holistic financial planning services that cover retirement, tax, estate, and investment planning. Whereas Financial Advisors may focus on specific areas, such as investment management or insurance products, they potentially offer more limited guidance.
Education requirements for a Financial Advisor can include:
Life and Health Insurance License
While the use of insurance products by many Financial Advisors can vary greatly, state timeframes to formally register you varies. To accommodate, this is the first license you will obtain.
To sell or implement insurance products, your Financial Advisor’s education requirements will include a state insurance license exam. You’ll need to learn more about insurance products and state procedures prior to taking an exam to be a Financial Advisor who can also work with insurance products. While rules and regulations vary by state, once you’ve passed your state-specific licensing exam, you will be able to work on behalf of an insurance company or sell its products.
Securities Industry Essential Registration
Securities Industry Essential (SIE) is the first securities exam you will encounter as you work toward becoming a Financial Advisor. Administered by the Financial Industry Regulatory Authority (FINRA), the SIE tests your basic understanding of financial products, industry terminology, laws and regulations, markets, and their functions, among other topics.
You’ll need a passing score of 70% on this 85-question, multiple-choice exam.
Before you learn more about what is a Series 7 license and other certifications, you must pass the SIE exam.
Series 7
Once you’ve successfully completed the SIE registration, your next step will be to take the Series 7 exam. So, what is a Series 7 registration?
Known as the most challenging exam for Financial Advisors to attain, the Series 7 is administered by FINRA. It will not only test you on what you know about general securities but also measure your readiness to sell complex financial products.
The Series 7 exam requires that all test takers have sponsorship.
To attain the requirements for a Series 7 registration, you will need to get at least 72% of the 125 multiple-choice questions correct. If you’re successful, you’ll gain the ability to sell bonds, futures, individual stocks, options, and packaged securities.
Series 66
Now that you know more about what is a Series 7 license, the next exam you’ll want to consider is the Series 66 exam. So, what is a Series 66 registration?
The Series 66 exam is administered by NASAA and covers a range of topics — from investment vehicle characteristics to economic factors, laws, and regulations to unethical business practices and much more. You will need to get at least 73 questions — out of 100 — correct in 150 minutes or less to successfully earn a Series 66 license.
To be used as a co-requisite of the Series 7, it also must be sponsored by a FINRA member firm.
The Series 66 exam, officially known as the NASAA Uniform Combined State Law Examination, is a securities license that allows individuals to act as investment advisor representatives (IARs). While the license itself doesn’t automatically make someone a fiduciary, it requires adherence to a fiduciary standard, meaning they must act in the best interests of their clients.
Financial Advisors: Overview and Responsibilities
Financial advisors serve as trusted partners who help clients navigate investments, savings, retirement planning, and various financial decisions. They explain complex financial concepts clearly and create strategies customized to individual goals and risk profiles. Their core duties include:
- Client Relationship Management: Building strong, trustworthy relationships to encourage open communication about finances.
- Financial Analysis and Planning: Evaluating clients’ financial situations, including income, expenses, assets, and liabilities, to develop actionable plans.
- Investment Portfolio Management: Choosing and monitoring investments aligned with the client’s objectives and tolerance for risk.
- Guidance Across Financial Areas: Offering advice that may also include insurance, tax strategies, and estate considerations, depending on their expertise and licensing.
Certified Financial Planners (CFPs): Overview and Responsibilities
CFPs represent a highly credentialed segment of financial advisors who provide holistic financial planning. Certified through rigorous education, examination, and ethical standards, CFPs are legally bound by fiduciary duty to act in clients’ best interests. Their responsibilities encompass:
- Holistic Financial Planning: Integrating all aspects of a client’s financial life, including investment management, retirement, estate planning, insurance, taxes, and more.
- Fiduciary Responsibility: A legal requirement to prioritize clients’ interests above their own or their firm’s profits.
- Certification and Ethics: Meeting demanding education and experience benchmarks, passing the CFP exam, and adhering to a strict code of ethics that includes ongoing education and background checks.
Key Skill Differences Between CFPs and Financial Advisors
The skill requirements for CFPs typically extend beyond those of a Financial Advisor, reflecting a broader scope of practice and higher standard of care. Both roles share foundational skills, but CFPs must develop more advanced capabilities to fulfill their fiduciary obligations and deliver the detailed planning services their certification represents.
- Technical Knowledge Depth: CFPs require more extensive knowledge across tax planning, estate planning, retirement analysis, and investment management, while a financial advisor may specialize in fewer areas; FATI’s curriculum provides the essential technical foundation that can be built upon for either career path.
- Analytical Capabilities: CFPs typically require stronger analytical skills to develop detailed, integrated financial plans that address multiple aspects of a client’s financial life; FATI helps develop these skills through practical, case-based learning scenarios.
- Ethical Standards Application: “At all times when providing Financial Advice to a Client, a CFP® professional must act as a fiduciary, and therefore, act in the best interests of the Client” [3]; FATI emphasizes ethical decision-making throughout its training program.
- Communication Skills: Both roles require excellent communication abilities, but CFPs often need to explain more complex strategies and their interrelationships; FATI‘s training includes specific modules on client communication and relationship management.
- Conflict Management: CFPs must be particularly skilled at identifying and managing conflicts of interest, as required by their fiduciary standard; “When providing Financial Advice, a CFP® professional must make full disclosure of all Material Conflicts of Interest with the CFP® professional’s Client that could affect the professional relationship”[3]; FATI prepares graduates to navigate these ethical challenges.
Launch Your Financial Advising Career with FATI
FATI offers a fast-track, 14-week* program designed to launch your financial advising career without requiring years of formal education. Created by industry professionals, the curriculum provides essential knowledge in investment products, client relationships, and regulatory compliance, complemented by hands-on training through case studies and simulations that reflect real-world advisor experiences.
More than just instruction, FATI transforms students into confident, job-ready professionals. Graduates step directly into financial services roles with a clear path toward specialization and advanced certifications, such as the CFP.
Career Paths After Completing Your Financial Advisor Training
The financial services industry offers high-potential career paths for well-trained professionals, ranging from entry-level advisory roles to specialized positions that can evolve into long-term careers. After completing your training with FATI, here are some standout paths to consider:
- Financial Advisor / Consultant: Step directly into advisory roles at banks, brokerages, or independent firms. You’ll apply FATI’s real-world training to build client relationships and provide expert guidance on investments, retirement planning, and broader financial strategies.
- Investment Representative: Work with retail or institutional clients to develop and execute investment plans. FATI’s emphasis on product knowledge, analytics, and compliance equips you to meet client goals while navigating regulatory requirements.
- Insurance Agent / Financial Services Representative: Deliver comprehensive financial solutions that blend insurance products with long-term planning. Leverage FATI’s training in needs analysis and strategic development to protect and grow clients’ wealth.
These roles mark just the start of your journey. As you gain experience and pursue certifications like the CFP, with exam prep support from FATI, you’ll have the opportunity to specialize, rise into leadership roles, and make an even greater impact across the financial services industry.
Start Your Journey Today
Understanding the differences between a CFP and a Financial Advisor clarifies the career path options available to you in this rewarding field, from entering as a financial advisor to potentially pursuing the prestigious CFP certification. Take the first step toward your financial advising career by exploring FATI’s 14-week* Financial Advisor program, your direct route to a profession that offers both personal satisfaction and financial rewards.
*Program length when completed in normal time.
[1] https://www.legalzoom.com/articles/certified-financial-planner-vs-financial-planner-whats-the-difference
[2] https://stcroixadvisors.com/certified-financial-planner-fiduciary-whats-the-difference/
[3] www.cfp.net/ethics/code-of-ethics-and-standards-of-conduct