Certified Financial Planner
The education, experience, and other requirements for receiving and maintaining professional designations vary greatly. For some designations, like the Certified Financial Planner designation, a financial professional may need to study and pass several rigorous exams – after working in a designated field for several years – to receive the title. In other cases, an individual is required to sit through a short class, pay a fee, and he or she is instantly an ABC or XYZ, or whatever. For this reason, investors need to be very careful not to assume that just because a person has some letters after their name, that they are an expert in handling your financial needs. Some designations represent legitimate expertise, while others are merely marketing tools. For more information on the meaning of various designations, visit the NASD’s website at www.finra.org , click on the “Investor Information” tab, and do a search for “understanding professional designations”. You will be able to type in the letters of the designation you would like to find out more about the issuing organization, prerequisites and education requirements, continuing education requirements, and exams that must be passed. Here are a few good designations to look for: CFP: Certified Financial Planner. The Certified Financial Planner designation is the most comprehensive financial planning designation that a professional can earn. It requires that a candidate complete a series of courses approved by the Certified Financial Planner Board of Standards. Each course requires the passing of a final exam, and then a comprehensive final exam must be passed at the end. A CFP has studied all areas of financial planning including: retirement planning, estate planning, investments, insurance, & taxes. Candidates must also have 3 years of personal financial planning experience and a Bachelors degree, or have 5 years of personal financial planning experience. Another big benefit of working with a Certified Financial Planner is that they are required to act as a fiduciary for their clients. This means that they must do what is in the best interest of their client no matter what. This reduces the risk of an advisor selling something to a client that may not be in the clients’ best interest, all because the advisor was thinking about how they would be compensated. A Certified Financial Planner is required to complete 30 hours of continuing education training every two years. You can learn more about the CFP designation by visiting the board of standards website at
www.cfp.net.
Here are a few designations you might want to be CAUCIOUS of: CSA – Certified Senior Advisor. This designation is issued by the Society of Certified Senior Advisors. There are 3 options to fulfill the education/experience requirements to obtain this designation. Option 1: Take a 3-1/2 day class or its self-study equivalent AND have one year of paid work experience working with seniors OR 50 hours of volunteering with seniors in the last 3 years. Option 2: Have two years of paid work experience working with seniors OR 100 hours of volunteer experience with seniors in the last 3 years. Option 3: Have a certificate or degree in a field related to working with seniors from an accredited college or university. WMS – Wealth Management Specialist. This designation is issued by Kaplan University/Dearborn Financial. A high school diploma or a GED is the only prerequisite or experience required for this designation. A 3-month self study course, followed by a certification exam will earn you this designation. There are no continuing education requirements needed to maintain your status as a ‘wealth management specialist’. It is important to interview advisors that you are considering hiring, and meet them in person if you can. Find out how long they have been in practice and the number and types of companies they have worked for. Don’t let the term ‘Financial Planner’ fool you. Many advisors use this generic term, but it doesn’t mean anything. Ask the planner what qualifies them to offer financial planning advice. It’s also very important to understand how the advisor will be paid for the services they perform. This could be from commissions, flat fees, hourly fees, asset management fees, or a combination of any of these. Also, ask them if they have ever been publicly disciplined for any unlawful or unethical actions in their professional career. Several government and professional organizations, such as the NASD (or FINRA), your state insurance department, and the CFP Board keep records of the disciplinary history of financial planners and advisors. Some states and most large insurance companies are no longer allowing licensed agents to use certain designation and titles. This is a good indicator of the kind of trickery that's been going on for the last several years. We'll most likely see more of this to come. By doing a little homework, you will be able to find a financial advisor who truly has the expertise you’re looking for, and you’ll avoid getting mixed up with the wrong letters of the alphabet. If you would like more information about building a career in the personal financial planning community, CLICK HERE. Go From Certified Financial Planner page back to Home Page.
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Finding a Certified Financial Planner is not as hard as it used to be. But these days it seems that everyone in the financial services industry has some letters displayed after their name, indicating that they hold some sort of professional designation. There’s CPA, CFP, CLU, ChFC, PFS, CMFC just to name a few. Like alphabet soup, there are lots of letters and they don’t really seem to spell anything. Many people don’t understand what these designations mean – such as “Senior Specialist” or “Retirement Advisor” – or what is required to obtain and keep the various designations.
