Certified Financial Planner (CFP)

What it is:

Certified Financial Planner (CFP) is a professional designation attained by a person who has successfully completed the requirements of the Certified Financial Planner Board. 

How it works/Example:

To become a CFP, an individual must first fulfill an investment-education requirement. This can be done by either completing a CFP Board-sponsored education program, or by obtaining certain other degrees or professional credentials, such as a: 

The individual must then pass the CFP examination: a three-session, 10-hour exam. The CFP Board administers the multiple-choice exam three times a year throughout the United States -- generally on the third Friday and Saturday of March, July, and November.

In addition to the education and examination requirements, the individual must have at least three years of full-time work experience in financial planning, as well as a bachelor's degree.

Why it Matters:

The CFP is a respected designation that denotes a person is a competent, professional and ethical financial planner. CFPs must adhere to a code of ethics and professional responsibility, and every applicant must pass a background check before obtaining his or her designation. 

Those who obtain the CFP designation usually go on to provide professional financial advice to individuals. However, the CFP designation also gives an advantage to people in a broad range of industries and employment.

The CFP is largely a domestic designation, although its more than 70,000 designees live in dozens of countries. The CFP Board is actively working to internationalize the credential through the development of foreign training programs. 

Best execution refers to the imperative that a broker, market maker, or other agent acting on behalf of an investor is obligated to execute the investor's order in a way that is most advantageous to the investor rather than the agent.