Today professionals that have earned their CFP certification, ( a certified financial planner ) have a myriad of challenges facing them in their daily practices. The financial advisory business can be an incredible challenge for many who work in it, even when business is going well. Those who are able to successfully manage their clients’ expectations can improve retention and their bottom lines.
Recruiters and prospective employers recognize the CFP® certification as the most desired designation in this growing field. According to a recent study by Aite Group, it turns out that getting the CFP marks really are good for business, with the average solo CFP generating 40% more revenue, the average experienced solo CFP generating 80% more revenue, and financial advisor teams generating 44% more revenue when they include at least 1 CFP professional. In turn, this results in the average CFP professional generating 14% to 33% more income than non-CFP advisors, even after controlling for years of experience.
Whether you are searching for a good career path or just curious about the different financial planner career options, earning your Certified Financial Planner certification will add credibility to your career path.
So, how does one earn their CFP Certification and become a Certified Financial Planner?
The CFP® certification process, administered by CFP Board, identifies to the public that those individuals who have been authorized to use the CFP® certification marks in the U.S. have met rigorous professional standards and have agreed to adhere to the principles of integrity, objectivity, competence, fairness, confidentiality, professionalism and diligence when dealing with clients.
CFP Board is a non-profit organization acting in the public interest by fostering professional standards in personal financial planning through its setting and enforcement of the education, examination, experience, ethics and other requirements for CFP® certification.
The CFP Board’s mission is to benefit the public by granting the CFP® certification and upholding it as the recognized standard of excellence for competent and ethical personal financial planning.
The CFP® certification marks identify professionals who have met the high standards of competency and ethics established and enforced by CFP Board. CFP Board’s Standards of Professional Conduct require CFP® professionals to act in their clients’ best interests.
The CFP Board conducted a nationwide consumer survey among upper-income households. That survey reflects the public’s growing demand for financial planners who adhere to rigorous standards. Of those surveyed:
- 85% considered successful completion of a certification examination “very important” or “extremely important.”
- 95% felt financial planners should adhere to professional practice standards.
- 97% said the most important standard for financial planners was adherence to a professional code of ethics.
Following widespread interest in the CFP® certification program from individuals and organizations around the globe, CFP Board facilitated the establishment of the International CFP Council in 1990 to promote the professionalism of individuals and organizations offering financial planning services and to ensure that such services are offered in an ethical and competent manner throughout the world.
As of November 2011, FPSB has members and associate members from 24 territories around the world, including CFP Board, which joined FPSB in 2008. Collectively, FPSB members have authorized approximately 140,000 individuals to use the CFP® marks in their respective countries and regions. More information on FPSB is available at www.fpsb.org.
To become certified, you are required to meet the following initial certification requirements (known as the four “Es”):
The first step to CFP® certification is to acquire the knowledge required to deliver professional, competent and ethical financial planning services to clients, as outlined in the major personal financial planning topic areas identified by CFP Board’s most recent Job Analysis Study.
CFP Board’s coursework component requires the completion of a college-level program of study in personal financial planning, or an accepted equivalent (through Challenge Status or Transcript Review), including completion of a financial plan development (capstone) course registered with CFP Board.
You must also have earned a bachelor’s degree (or higher) from a regionally-accredited college or university in order to obtain CFP® certification. The bachelor’s degree requirement is a condition of initial certification; however, it is not a requirement to be eligible to take the CFP® Certification Examination and does not need to be met before registering for the examination. CFP Board does not grant equivalencies or exceptions to the bachelor’s degree education requirement.
After you must have successfully met the education coursework requirement, you will be eligible to register for the CFP® Certification Examination. The CFP® Certification Examination assesses your ability to apply your financial planning knowledge, in an integrated format, to financial planning situations (See the Job Task Domains). Combined with the education, experience, and ethics requirements, it assures the public that you have met a level of competency appropriate for professional practice.
Because CFP® certification indicates to the public your ability to provide financial planning without supervision, CFP Board requires you to have three years of professional experience in the financial planning process, or two years of apprenticeship experience that meets additional requirements. Qualifying experience may be acquired through a variety of activities and professional settings including personal delivery, supervision, direct support or teaching.
CFP® professionals agree to adhere to the high standards of ethics and practice outlined in CFP Board’s Standards of Professional Conduct and to acknowledge CFP Board’s right to enforce them through its Disciplinary Rules and Procedures. When you have completed the education, examination and experience components of the CFP® certification process, you will be directed to complete a CFP® Certification Application on which you will be asked to disclose information about your background, including your involvement in any criminal, civil, governmental, or self-regulatory agency proceeding or inquiry, bankruptcy, customer complaint, filing, termination/internal reviews conducted by your employer or firm. CFP Board conducts a detailed background check for all candidates, including review of any disclosures made on the CFP® Certification Application. Matters that may or will bar you from obtaining certification are investigated in accordance with CFP Board’s Disciplinary Rules and Procedures. Authorization to use the CFP® marks will not be approved until the background check and any investigation are concluded successfully.
CFP Continuing Education Path
Certified Financial Planner Recertification
Once a CFP has been authorized to use the CFP® marks, they must meet CFP Board’s renewal standards to continue to use them. Part of the re-certification process requires a CFP to complete 30 hours of continuing education (CE) accepted by CFP Board every two years. XTRAcredits offers continuing education courses qualified towards the re-certification needs of the 30 hours of the required continuing education credits.
At XTRAcredits, Certified Financial Planners can depend on accessing continuing education credit course catalogue for on-demand and live events to meet their recertification continuing education needs.
CFP Ethics Update for 2018:
CFP® professionals are required to complete a CFP Board Ethics CE Program (“Ethics Program”) every two years. Ethics Programs are renewed on a 2-year cycle, with learning objectives and content updated in every even-numbered year.
CFP Board is responsible for the curriculum development of CE Ethics Programs. Sponsors choosing to offer an Ethics Program must follow instructions for requesting CFP Board’s Ethics CE curriculum. The updated instructions will be available in early 2018.
CFP Board will review each request before providing the Ethics Sponsor with the course content and related material.
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More about the CFP Board: Applicants for CFP® certification are required to satisfy CFP Board’s Fitness Standards for Candidates and Professionals Eligible for Reinstatement, which describe conduct that will always bar an individual from becoming certified and conduct that is presumed to be unacceptable and will bar an individual from becoming certified unless the individual successfully petitions CFP Board’s Disciplinary and Ethics Commission for consideration. CFP Board encourages all individuals pursuing CFP® certification to review the Fitness Standards for Candidates and Professionals Eligible for Reinstatement before addressing the other certification requirements.
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