Certified Financial Planner Professional™: How They Differ From Financial Planners

By Mark Stevens, CFP®

Anyone can call themselves a financial planner. However, only those who meet the requirements of the Financial Board of Standards, Inc can call themselves a Certified Financial Planner Professional™ or CFP® professional. When you work with a CFP® professional, you know you are getting someone with certified education, experience, and ethical standards. Let’s look quickly at the requirements needed to become a CFP® professional, why you might want to use one, and how to find one that suits your needs.

CFP® Professional Requirements

Becoming a Certified Financial Planner Professional™ is not easy. The Financial Board of Standards, Inc requires that each CFP® professional have the following:

  • Bachelor’s degree from an accredited college
  • CFP® professional education program
  • Pass the 10-hour certification exam
  • 3 years of qualifying, full-time financial planning experience
  • Pass a background check for professional fitness standards

But that is not all. To remain in good standing, CFP® professionals must complete continuing education requirements every two years.

What Does a CFP® Professional Actually Do?

A CFP® professional is trained to help individuals as well as businesses and organizations. This training has given them the ability to look at your current financial situation to determine what is working and what is not, as well as give you ideas for options to fix any problems or meet your goals.  The required training has given a CFP® professional the ability to help with such things as:

  • Taxes and tax planning
  • Investment planning
  • Risk management
  • Retirement planning

How Does a CFP® Professional Earn a Living?

Many people wonder how CFPs® are compensated. There are several different ways, including:

  1. Commissions – Receives a commission when clients buy or sell investments, purchase insurance, or buy an annuity
  2. Charging hourly rates – Has an hourly rate for completing services
  3. Charging a flat fee – Has a flat fee for completing services
  4. Combination of fees and commission – Charges a flat rate for a portion of services, such as creating a financial plan, and then receives a commission for selling certain products

When choosing a CFP® professional, be sure to consider all their fees and commissions, as well as the fees related to the products you put into your investment portfolio.

Can a CFP® Professional Help Me?

A CFP® professional is equipped to help you in a number of ways, depending on your circumstances and the goals you have:

  • Budgeting 
  • Retirement planning and implementation 
  • Education planning and implementation
  • Wealth protection planning and implementation
  • Risk management strategies like insurance coverage
  • Tax planning
  • Manage your asset portfolio
  • Analyze assets, liabilities, income, taxes, investments, and insurance and address needs
  • Plan reviews to assess changing circumstances and goals

In all areas, a CFP® professional will help you identify and build on your financial strengths and reduce your financial weaknesses. 

How Do I Choose the Right CFP® Professional For Me?

It is really important to find a CFP® professional that you trust and respect. Think about it – you’ll be sharing a lot from personal goals to specific financial information.  Because of the CFP® professional standards, you can know that someone with the CFP® professional designation will have the right education, experience, and integrity. However, this doesn’t mean that every CFP® professional is right for you. For instance, if you need someone for retirement planning, then you won’t want to hire a CFP® professional who works mainly with small businesses! The best way to find a CFP® professional is through recommendations from friends, family, or coworkers. Once you have some recommendations in hand, be sure to ask for the following:

  • Form ADV – This form is filed with the US Securities and Exchange Commission (SEC) and states information about the CFP® professional such as education, business, disciplinary actions taken, services, fees, and investment strategies.
  • Disclosure document – This must be provided when you enter into an agreement with a CFP® professional. Always read this and any agreement contracts carefully.

Finally, you should be prepared to interview the potential CFP® professional to determine if they are the right fit. Here are some potential questions to consider:

  • What schools did you attend, what degrees did you earn, and what further education have you completed?
  • What licenses do you have?
  • In which agencies are you registered? (Such as SEC, FINRA, or your state)
  • Do you use a broker-dealer for securities trades? If so, who is it?
  • Who is your typical client? Do you concentrate on a specific area of financial planning?
  • What products and services can you offer to me? Are there products and services you cannot offer?
  • Can you tell me about your compensation structure? Does it include a commission for products you might sell to me?
  • Has any regulatory agency been required to discipline you for your actions?

Is a CFP® Professional a Good Choice For You?

Unless you have the same education and experience as a CFP® professional, the answer is yes. Financial planning is very complex and has lots of moving parts. It would be very difficult, if not impossible, for someone who doesn’t do this type of work fulltime, and who doesn’t seek after continuing education, to keep up with the regulatory changes and understand the nuances of individual situations. For those seeking financial health now and in the future or for those seeking specific financial goals such as sending children to college, leaving loved ones a legacy, or living a happy, fun-filled retirement, a CFP® professional can offer suggestions to help you along the way. Click here to contact me and find out how a CFP® professional can answer your financial questions and guide you toward your financial goals. 

Hi, I’m Mark Stevens, CFP®, owner of Stevens Wealth Strategies – an independent wealth management firm based in Atlanta, GA.