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Choosing a Certified Financial Planner (CFP)

Choosing a Certified Financial Planner (CFP)

By Amit Bhawani

What is a Certified Financial Planner (CFP)?

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A Certified Financial Planner, or CFP, is a financial professional who meets the requirements established by the CFP Board of Standards.

To become a Certified Financial Planner, the board requires the following:

  •  A Bachelor’s degree, or higher
  • Complete a CFP Board-Registered Education Program.
  • Pass the CFP Certification Examination, a 10 hour exam
  • Have at least three years of work experience in personal financial planning
  • Pass a background check
  • Pay certification fees

Once they become a CFP, financial professionals are required to report Continuing Education requirements every other year, to insure they are keeping up with changes in the industry.

How does a CFP compare to other financial professionals?

There are many different types of financial professionals, and the “alphabet soup” of designations may be confusing.

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CFPs are trained to develop comprehensive financial plans for individuals, businesses, and non-profit organizations. It is their responsibility to objectively assess your financial situation, troubleshoot problem areas, and recommend appropriate options. A good CFP should be confident in all areas of financial planning and the way various strategies can be used to create a comprehensive plan suited to your needs.

How do I pay for a CFP’s services?

There are two ways that CFPs can be compensated. First, they may take a commission from a product or service that they sell you. Second, they may ask that you pay a flat or hourly fee for their services. Some financial professionals use a hybrid of fees and commissions. Be sure to talk about this with your planner before agreeing to engage his or her services.

How do I choose a CFP to work with?

You will be working very closely with your financial planner on every aspect of your wealth management, so it’s important that you are completely confident with the CFP you choose to work with. – Talk to your friends and family to see what their experiences are, it’s a good place to get started.

– Feel free to do some internet searches on prospective planners – you should be able to tell a lot by a person’s, or firm’s, online presence.

– Don’t hesitate to check with the various regulatory boards to see if there has ever been a complaint lodged against the planner. You can check CFP.net, as well as Finra.org, and Sipc.org.

– Finally, give the CFP a call. If you set up a meeting, or even just start out with a long phone conversation, it will give you a good idea of whether this is the planner for you.

Amit Bhawani writes on different topics ranging from technology to Financial Planning and gives advices through different articles on choosing professional financial planners at financialplanners.com who can help you make better decisions with your money.

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