There are many different financial advisor designations. However, the CERTIFIED FINANCIAL PLANNER™ (CFP®) designation is one of the most popular and is the standard in the industry for financial planning.
Why is it important?
As mentioned in a previous post, financial advisor designations aren’t everything, but they are important in showing an advisor’s seriousness and commitment to the profession. The CERTIFIED FINANCIAL PLANNER™ (CFP®) designation has become very popular – there are currently more than 100,000 professionals with the designation. It has become the standard in the industry for financial planning. I think having a standard in the industry is important in making financial advising a career, instead of a job that people can quickly and casually fall into. The industry is maturing and becoming more professional, and I think the CFP® designation is a meaningful part of that.
The CFP® designation is not required to give advice from a legal/regulatory standpoint. However, I have heard of firms making it a requirement for new advisors to give advice to their clients. I think this is a great thing in making expectations and a career track clear for young advisors – if they want to advance in their careers and move from supporting another advisor to giving advice themselves, they must go through the CFP® certification process.
Certification process
The CFP® certification process has several different parts:
Education. There are two different education requirements:
Bachelor's degree. A bachelor’s degree is required, however the degree can be in anything.
CFP® coursework. CFP® coursework covering a variety of financial planning topics is required.
Exam. After completing the CFP® coursework, there is a comprehensive exam.
Experience. There is a relevant experience requirement of 6,000 hours (3 years). However, if the experience is especially comprehensive, it may qualify as “apprentice experience” and a shorter requirement of 4,000 hours (2 years).
Ethics. A candidate must agree to certain ethics standards.
If you have any comments, questions, or ideas for future posts, please let me know
I hope you found this post helpful and educational. If you have any comments, questions, or ideas for future posts, please let me know. You can reach me directly via email at crawford@ulmerfinancial.com.
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