Fitness Standards for Candidates

CFP Board requires all candidates to demonstrate ethical fitness before becoming certified. The Fitness Standards establish specific character and fitness requirements that candidates must meet. These standards also apply to former CFP professionals seeking reinstatement after suspension or revocation.

Understanding the Fitness Standards is essential for CFP exam candidates because the exam frequently tests these concepts. The standards categorize adverse conduct into three tiers with different consequences for certification eligibility.

The Three Categories of Adverse Conduct

CFP Board evaluates applicants based on three categories of conduct that may affect certification eligibility:

The DEC (Disciplinary and Ethics Commission) reviews fitness petitions and determines whether to grant certification, grant with conditions, or deny.

Conduct that Presents an Absolute Bar

Certain conduct permanently bars an individual from ever obtaining CFP certification. No petition or appeal can overcome an Absolute Bar. This includes:

Felony Convictions:

• Theft, embezzlement, or other financially-based crimes
• Tax fraud or other tax-related crimes
• Any degree of murder or rape
• Violent crimes within the past five years

Professional License Actions:

• Revocation of a financial professional license (securities representative, broker-dealer, insurance, accountant, investment adviser, financial planner)
• Exception: Administrative revocation for non-renewal (failure to pay fees) does not constitute an Absolute Bar

Exam Tip: The key distinction is between revocation (Absolute Bar) and suspension (Presumptive Bar requiring petition). Revocation of a financial license is permanent; suspension allows the possibility of certification through petition.

Conduct that Renders an Applicant Currently Ineligible

Some conduct creates a presumptive bar to certification. Unlike an Absolute Bar, candidates in this category may petition the DEC for a fitness determination. The DEC will deny certification unless the candidate can demonstrate fitness.

Presumptive Bar Conduct Includes:

Petition for Fitness Process:

1. Candidate signs the Pathway to CFP Certification Agreement
2. CFP Board staff notifies candidate of requirement to file a Petition for Fitness
3. Candidate submits written petition with relevant documentation
4. DEC reviews petition and issues an order

Possible DEC Outcomes:

• Grant the Petition for Fitness (approve certification)
• Grant with Private Notice or Public Notice
• Deny the Petition and impose Temporary Bar or Permanent Bar

Bankruptcy and Fitness Standards

Bankruptcy is frequently tested on the CFP exam. The treatment depends on the number of bankruptcies and when they occurred:

One Bankruptcy:

A single bankruptcy does not automatically bar certification, but the candidate must demonstrate they are no longer exhibiting inability to manage financial affairs responsibly.

Two or More Bankruptcies:

Bankruptcy Reporting Requirements:

• Report to CFP Board: Within 30 calendar days of filing
• Report to clients: Within 90 days, with location of relevant public websites

Public Disclosure of Bankruptcy:

• Disclosed on CFP professional's public profile on CFP Board's website
• Included in periodic press releases by CFP Board
• Remains visible for 10 years from the disclosure date

Other Adverse Conduct

The third category includes conduct that may reflect adversely on fitness but does not create an Absolute Bar or Presumptive Bar. Candidates with this conduct may need to provide additional information but are not automatically barred:

• Customer complaints
• Arbitrations and other civil proceedings
• Felony conviction for non-violent crimes more than 5 years ago
• Misdemeanor convictions
• Employer investigations or terminations

The Character and Fitness Review Process

CFP Board conducts character and fitness review as part of the certification process:

Step 1: Ethics Declaration When applying for certification, candidates must complete an ethics declaration disclosing any relevant conduct, including:

• Criminal history
• Civil proceedings
• Regulatory actions
• Bankruptcies
• Customer complaints

Step 2: Background Verification CFP Board verifies the information through:

• Criminal background checks
• Review of regulatory databases (CRD, IARD)
• Court records
• Other public sources

Step 3: Determination Enforcement Counsel reviews the information and determines:

• No bar exists (candidate proceeds to certification)
• Conduct presents an Absolute Bar (candidate cannot certify)
• Conduct requires Petition for Fitness (candidate must petition DEC)

Step 4: DEC Review (if applicable) If a Petition for Fitness is required:

• The Hearing Panel reviews the petition
• Panel recommends to the DEC whether to grant or deny
• DEC issues final order (grant, grant with notice, or deny)
• Candidate may appeal to the Appeals Commission

Burden of Proof

The candidate bears the burden of proving fitness by a preponderance of the evidence. This means the candidate must show it is "more likely than not" that they possess the ethical fitness for certification.

Reinstatement After Suspension

Former CFP professionals seeking reinstatement after suspension of more than one year must:

1. File a written Petition for Reinstatement
2. File no earlier than 6 months before suspension ends
3. File no later than 5 years after suspension began
4. Submit to DEC and Hearing Panel review

Critical Timeline: If a suspended CFP professional fails to file a Petition for Reinstatement within 5 years of the suspension start date, they are deemed to have permanently relinquished CFP certification.

May 2025 Procedural Rule Updates

CFP Board adopted updated Procedural Rules effective May 23, 2025, which refined the fitness determination process:

Single Bankruptcy Cases:

• Candidates with a single bankruptcy (no longer demonstrating inability to manage financial affairs) may attain certification with a Caution or Public Notice
• The specific outcome depends on how long ago the bankruptcy occurred and whether the individual was providing professional services at the time

Multiple Alcohol/Drug-Related Offenses:

• Candidates with multiple misdemeanor convictions involving alcohol and/or drug-related offenses may attain certification with a Caution
• Requirement: The most recent offense must be seven or more years ago

These updates maintain the integrity of CFP certification while streamlining the adjudication process for certain categories of cases.

Key Fitness Standards Comparison