Broker Check

What does it mean to be a CFP® professional?

February 11, 2019
Share |

 

Many clients have wondered what the designation, CFP®, next to my name means or may have seen it somewhere, next to another advisor's name.  Some may not know what it is designating or why certain advisors would choose to have it.  In this week's blog, I am going to go over this financial designation: 

A CERTIFIED FINANCIAL PLANNER™ professional or CFP® practitioner is a financial professional who meets the requirements established by the Certified Financial Planner Board of Standards, Inc. While others may call themselves financial planners, only those who demonstrate the requisite experience, education, and ethical standards are awarded the CFP® mark.

What are the requirements?

In order to obtain the CFP® mark, an applicant must:

  • Hold a bachelor's degree from an accredited college or university
  • Complete a CFP® Board-registered education program
  • Pass the 10-hour CFP® certification exam
  • Have at least three years of qualifying full-time work experience in financial planning
  • Pass a professional fitness standards and background check

Once appointed, a CFP® professional must meet continuing education requirements every other year in order to maintain the certification.

What does a CFP® professional do?

A CFP® professional is trained to develop and implement comprehensive financial plans for individuals, businesses, and organizations. He or she has the knowledge and skills to objectively assess your current financial status, identify potential problem areas, and recommend appropriate options. You're also working with someone who's demonstrated expertise in multiple areas of financial planning, including income and estate tax, investment planning, risk management, and retirement planning.

How can a CFP® professional help you?

A CFP® professional can help you create a personal budget, control expenses, and develop and implement plans for retirement, education, and/or wealth protection. A CFP® professional can offer expertise in risk management, including strategies involving life and long-term care insurance, health insurance, and liability coverage. He or she often can help with your tax planning or manage your asset portfolio based on your goals.

Specifically, a CFP® professional can help you:

  • Establish financial and personal goals and create a plan to achieve them
  • Evaluate your financial well-being with a thorough analysis of your assets, liabilities, income, taxes, investments, and insurance
  • Identify areas of concern and help you address them by developing and implementing a financial plan that emphasizes your financial strengths while reducing your financial weaknesses
  • Review your plan periodically to accommodate your changing personal circumstances and financial goals

Questions to ask

Here are some questions you may ask during an initial meeting concerning the CFP®:

  • What is your education? What schools did you attend and what degrees have you earned?
  • What licenses do you hold? Are you registered with the SEC, FINRA, or the state?
  • Are you affiliated with any professional groups or organizations? Do you execute securities trades through a broker-dealer? Who is it?
  • Does your practice concentrate in a particular area? What types of clients do you work with?
  • What type of products and services do you offer? Are you limited as to the products and services you can offer me?
  • How are you compensated for your services?
  • Have you ever been disciplined by any government board or regulatory agency?

Is a CFP® professional right for you?

The financial world has become a very complex place. Even if you're used to handling your own financial affairs, the time may be right to consult a CFP® professional who can review your financial health and offer suggestions that may help you reach your financial goals.

For example, are you familiar with all the different investment opportunities that might be available to you? Are you on track to meet your financial goals such as saving for your child's college education, securing enough income for a comfortable retirement, or protecting your assets against risks and lawsuits? A CFP® professional can offer the analysis you need to help answer these and other important financial questions.

 

Note:Certified Financial Planner Board of Standards Inc. owns the certification marks CFP® and CERTIFIED FINANCIAL PLANNER™ and federally registered CFP (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.