CFP vs. CLU vs. ChFC: Which Financial Credential Is Right for You?

You may come across different professional designations that represent different areas of financial expertise. A Certified Financial Planner (CFP) focuses on comprehensive financial planning, a Chartered Life Underwriter (CLU) specializes in life insurance and estate planning, and a Chartered Financial Consultant (ChFC) offers broad financial advice similar to a CFP, but with added flexibility in course selection. Choosing the right credential depends on your career goals and the clients you aim to serve. In this article, we explain how each differs, including the curriculum and career opportunities.

Exploring the CFP Curriculum

The CFP mark is offered and governed by the Certified Financial Planner Board of Standards in Washington, DC. The CFP designation is perhaps the most widely recognized credential in the field today, due largely to the amount of exposure it has received from the media.

This credential is generally the designation of choice for those who wish to offer fee-based financial planning and traditionally has been more heavily pursued by those in the tax, legal or investment professions. Insurance agents who obtain this designation can use it to provide comprehensive financial plans for clients and show them how their various insurance needs fit into such plans.

CFP Curriculum

The CFP curriculum contains five core courses that cover the following planning topics:

• Investment planning
• Insurance planning
• Estate planning
• Tax planning
• Retirement planning
• Education planning
• Ethics and the financial planning process

There are approximately 70 conceptual topics related to financial planning that are covered in this material. Once all coursework is successfully completed, including The Capstone course, a comprehensive financial plan development course created to enhance your knowledge, skills and abilities. candidates must pass a rigorous,six-hour exam. Once the candidates pass the exam, they must also pass a background check and pay an entrance fee before receiving their certifications.

Once you become a CFP, you'll have to renew your certification on a regular basis. This is required every two years. To re-certify, you have have to pay a fee of $455 along with a completed application, and complete 30 hours of continuing education—28 hours in financial planning and two hours in approved ethics.

Advantages of Earning a CFP Certification

Becoming a CFP takes a lot of hard work and commitment. But there are a lot of benefits to those who pursue this designation. First of all, it gives you the ability to help your clients meet their financial goals. It also provides you with a boost in your income—becoming certified can give you the potential for a higher salary.

Understanding the Chartered Life Underwriter (CLU) Designation

The CLU is widely considered to be the most respected insurance designation in the industry. This designation was created in 1927 by the American College in Bryn Mawr, Pennsylvania. The CLU has traditionally been pursued by agents who wish to specialize in life insurance for business or estate-planning purposes.

Delving into the CLU Curriculum

The current course curriculum for the CLU includes four required courses. They include the following:

• The Tools and Techniques of Life Insurance Planning
• Legal Aspects of Life Insurance
• Fundamentals of Estate Planning
• Planning for Business Owners and Professionals

In addition to the four required courses, individuals must also enroll in one of five elective courses. These can be chosen from such subjects as the following:

• Financial Planning: Process and Environment
• Fundamentals of Insurance Planning
• Income Taxation
• Planning for Retirement Needs
• Investments

CLU Program Structure and Flexibility

Students are able to do coursework online. One of the main benefits of this course of study is that you're allowed to complete coursework at your own pace. Students are given about 18 months to complete the program.

Chartered Financial Consultant (ChFC): Insights into Advanced Financial Planning

The Chartered Financial Consultant (ChFC) credential was introduced in 1982 as an alternative to the CFP mark. This designation is also available through the American College. This designation has the same core curriculum as the CFP designation that focus on various areas of personal financial planning. But the biggest difference is that it does not require candidates to pass a comprehensive board exam, as with the CFP.

Due to the number of courses that overlap both the ChFC and CFP, the ChFC and CLU marks are often taken by individuals seeking in-depth knowledge of both financial planning and insurance, but who wish to avoid a lengthy board exam. Some of the areas the program outlines are:

• Behavioral Finance
• Small Business Families
• Financial Planning for LGBTQ Clients
• Helping Families with Special Needs Dependents

Choosing the Right Financial Certification for Your Goals

There really is no right answer to this question. The answer lies in your preferred area of focus. If you want to focus more exclusively on life insurance, then the CLU designation provides the most complete curriculum for you. If you prefer to focus on comprehensive financial planning, then one of the other two credentials are a better fit.

It should be noted that none of these designations are considered to be inherently superior to the others. The CFP designation requires less coursework but forces its students to learn the material in a way that allows them to proactively apply it in the board exam. The CLU and ChFC credentials require more coursework but have no comprehensive exam. The following chart can help you understand the differences and similarities between the three designations.