Not all financial professionals are created equal. That's why it's important to know the two most common types are financial advisors and Certified Financial Planners™, better known as CFPs®, that you may typically run across when searching for an advisor.

What’s a financial advisor?

A financial advisor is an expert in financial planning, investment management, and other areas of financial services, such as estate planning.

Advisors mainly help clients achieve their financial goals, whether short-term planning for a new home or long-term planning for retirement. Some financial advisors advise clients on a broad range of topics, while others focus on a specific niche. One key difference to note, financial advisors are not required to be a fiduciary like CFPs^® are–more on that below.

What’s a Certified Financial Planner™?

A Certified Financial Planner™ (CFP^®) is an advisor who has received an accredited designation that demonstrates an in-depth knowledge of financial planning. These advisors meet rigorous education, training, and ethical standards. Only those who have fulfilled these requirements can call themselves CFP^® professionals. All  CFP^®s are financial advisors, but not all advisors are CFP^®s.

To become a CFP^®, an advisor must complete a multi-year and multi-step process, which includes taking educational courses and meeting additional requirements once they obtain their designation. Also, the advisor must pass the CFP^® Board exam, have at least two years of real-life financial planning experience, and commit to following a code of ethics and standards set forth by the CFP^® board. If they don’t abide by the ethical standards, they risk losing their certification.