The Value of a Certified Financial Planner™ Professional

Most people think that all financial planners are "certified," but this isn't true. Anyone can call himself or herself a "financial planner." Only those who have fulfilled the certification and renewal requirements of CFP Board can display the CFP® certification marks.

Choosing a financial planner may be one of the most important decisions you make for yourself and your loved ones. Financial planners can provide you and your family guidance over your lifetime, or work with you to address specific concerns as needed. A planner can play a central role in helping you meet your life goals and achieve financial well-being. Consequently, take the time to select a financial planner who is competent and trustworthy, one on whom you can rely for professional advice and services. Your future depends on the choices you make.

Individuals certified by the CFP Board have taken the extra step to demonstrate their professionalism by voluntarily submitting to the rigorous CFP® certification process that includes demanding education, examination, experience and ethical requirements. These standards are called "the four E's," and they are four important reasons why the financial planning practitioner you select should display the CFP® certification marks.

When selecting a financial planner, you need to feel confident that the person you choose to help you plan for your future is competent and ethical. The CFP® certification provides that sense of security by allowing only those who meet the following requirements the right to use the CFP® certification marks.

CFP® Certification Requirements: the four E's

Education: CFP® professionals must develop their theoretical and practical financial planning knowledge by completing a comprehensive course of study at a college or university offering a financial planning curriculum approved by CFP Board. Other options for satisfying the education component include submitting a transcript review or previous financial planning-related course work to CFP Board for review and credit, or showing the attainment of certain professional designations or academic degrees.

Examination: CFP® professional must pass a comprehensive one-day, 6-hour CFP® Certification Examination that tests their ability to apply financial planning knowledge in an inte¬grated format. Based on regular research of what planners do, the exam covers the financial planning process, tax planning, employee benefits and retirement planning, estate planning, investment management and insurance.

Experience: CFP® professionals must have three years' experience in the financial planning process prior to earning the right to use the CFP® certification marks. Alternatively, an indi¬vidual working to attain CFP® certification may meet the experience requirement through fulfilling a more rigorous two-year apprenticeship under the direct supervision of a CFP® professional. This hands-on experience guarantees that CFP® professionals have practical financial planning knowledge, so you can count on them to help you create a realistic financial plan that fits your individual needs.

Ethics: When it comes to ethics and professional responsibility, Certified Financial Planner™ professionals are held to the highest of standards. CFP Board's Code of Ethics outlines CFP® professionals' obligations to uphold principles of integrity, objectivity, competence, fairness, confidentiality, professionalism and diligence. And the Rules of Conduct require CFP® professionals to put your interests above their own and to provide their financial planning services as a "fiduciary" - acting in the best interest of their finan¬cial planning clients. CFP® professionals are subject to CFP Board sanctions if they violate these standards.

How does CFP Board's Code of Ethics benefit me?

CFP® professionals agree to adhere to CFP Board's ethical standards, which require them to put your interest ahead of their own at all times. The Code of Ethics states that CFP® professionals are to act fairly and diligently, with integrity and with services that are objective and based on your needs. They are required to provide you information about their sources of compensation and conflicts of interest in writing.

Ongoing certification requirements

Once certified, CFP® practitioners are required to maintain technical competence and fulfill ethical obligations. Every two years, they must complete a minimum 30 hours of continuing education to stay current with developments in the financial planning profession and better serve clients. Two of these hours are spent studying or discussing CFP Board's Code of Ethics or Practice Standards. In addition to the biennial continuing education requirement, all CFP® practitioners voluntarily disclose any public, civil, criminal or disciplinary actions that may have been taken against them during the previous two years as part of the renewal process.

What else should I remember when selecting a planner?

As more people call themselves "financial planners," finding the right professional to address your financial planning needs isn't always easy. It's important to take your time when choosing a financial planner, and before making a decision, become familiar with the planner's business style and understand the level of services he or she provides.

CFP® | Certified Financial Planner™ |
Certified Financial Planner Board of Standards, Inc., owns the certification marks above in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.