You may hear the terms financial planner or wealth advisor thrown around when looking for an expert to help you with your personal finances. Though anyone can call themselves a financial planner, less than 1% of the U.S. population hold the CERTIFIED FINANCIAL PLANNER™ CFP® Certification. To understand the benefits of working with a CFP® professional instead of a generic financial advisor, it’s important to understand what it means to hold the CFP® certification.
What is the CERTIFIED FINANCIAL PLANNER™ CFP® certification?
The certification is widely considered the gold standard of financial planning. It requires extensive education and experience, as well as adhering to ethical standards.
Why should you work with a CERTIFIED FINANCIAL PLANNER™ practitioner? Is working with a CFP® professional worth it?
The short answer: yes. Why? CFP® professionals must meet strict requirements and regulations, making them the best of the best when it comes to financial planning.
Professionals holding the CFP® Certification are highly educated and trained.
Two of the biggest components of the CFP® certification are education and experience. To complete the qualification, candidates must first earn a bachelor’s degree from an accredited college or university. The other piece of the education requirement calls for a CFP-board registered program, such as a master’s program in financial planning. Some professionals, such as Certified Public Accountants (CPAs) or attorneys, may skip this step due to their own educational requirements.
In addition to their education, experience is also crucial for CFP® candidates. In order to earn the designation, candidates must complete 6,000 hours of professional experience related to financial planning or 4,000 hours of apprenticeship experience that meets additional requirements.
They use their education and experience, along with rigorous studying, to take a comprehensive examination covering professional conduct, risk management, tax planning, retirement savings, and more.
So, when you work with a CFP® practitioner, you know that they have robust knowledge and in-depth experience to help you.
CERTIFIED FINANCIAL PLANNER™ practitioners are in the know about the latest developments in financial planning and wealth management.
To maintain the designation, CFP® practitioners must complete 30 hours of continuing education (CE) annually for every two-year reporting period. This training must include the CFP Board Code of Ethics CE program, while the rest of their hours can focus on the board’s Principal Knowledge Topics. This includes professional conduct and regulation, general principles of financial planning, risk management and insurance planning, investment planning, tax planning, retirement savings and income planning, estate planning, and psychology of financial planning.
This commitment to continuing education ensures your CFP® practitioner is in the know about the latest financial developments. When you’re looking for someone to help you plan for the future, you need a lifelong learner.
Professionals with the CFP® certification are committed to ethical standards.
There are four E’s that make up the CFP® certification process: education, experience, examination, and ethics. CERTIFIED FINANCIAL PLANNER™ practitioners are not only required to complete biannual training on ethics; they are required to always act as fiduciaries. A fiduciary advisor acts in the client’s best interests, not their own, as part of their Duty of Loyalty. They also must perform their duties with integrity and honesty, as outlined in the CFP Bord Code of Ethics. They should avoid conflicts of interest, but if any arise, they are required to fully disclose those with their clients. The complete CFP Board Code of Ethics is available on their website.
These strict standards ensure that your CERTIFIED FINANCIAL PLANNER™ Practitioner is always working in your best interests.
At Kassouf Wealth Advisors in Birmingham, Alabama, our team of CERTIFIED FINANCIAL PLANNER™ practitioners are ready to help you make the best decisions possible for your situation, armed with extensive education and training while maintaining a commitment to lifelong learning and ethical standards. As one of Alabama’s most established financial planning and wealth management firms, we are ready to help you create the right financial plan for you. Contact our team to get started.