Working with a CFP®
It is important to realize that all financial planners are not “certified.” Only those who have fulfilled the certification and renewal requirements of the CFP Board can display the CFP® certification marks showing that they have completed the rigorous CFP® certification process. The standards of this process, called “the four Es,” include education, examination, experience, and ethical requirements, and they represent four important reasons why it is important for the financial planning practitioner you work with to be a CFP®. You need to feel confident and secure that you have chosen a competent, ethical professional for the development of your customized financial plan.
- Education: CFP® professionals must develop their theoretical and practical financial planning knowledge by completing a comprehensive course of study at a college or university with a financial planning curriculum that has been approved by the CFP Board. Other options for satisfying the education requirements include showing the attainment of certain professional designations or academic degrees or submitting a transcript review or previous financial planning-related course work to the CFP® Board for review and credit.
- Examination: CFP® practitioners must pass a comprehensive two-day, 10-hour CFP® Certification Examination that tests their ability to apply financial planning knowledge in an integrated format. This exam is based on research regarding the work planners do, and the exam covers the financial planning process, tax planning, employee benefits, retirement planning, estate planning, investment management, and insurance.
- Experience: Before earning the right to the CFP® certification marks, CERTIFIED FINANCIAL PLANNER™ professionals must have at least three years of experience in the financial planning process to demonstrate that they have financial counseling skills in addition to financial planning knowledge.
- Ethics: As a final step to certification, CFP® practitioners agree to abide by a strict code of professional conduct known as the CFP® Board's Code of Ethics and Professional Responsibility. This strict code defines their ethical responsibilities to the public, clients, and employers. A background check is also done by the CFP® Board during this process, and each individual must disclose any legal proceedings or investigations that are related to their professional or business conduct.
Through the Code of Ethics, CFP® practitioners agree to put your interests first and act fairly and diligently when providing you with financial planning advice and services. The Code of Ethics states that CFP® practitioners are to act with integrity, offering you professional services that are objective and based on your needs. They are required to provide you with information about their sources of compensation and conflicts of interest in writing.
Once CFP® practitioners are certified, they are required to maintain technical competence and fulfill ethical obligations. Another requirement is that every two years, they must complete a minimum of 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 the CFP® Board's Code of Ethics or Practice Standards. In addition to the biennial continuing education requirement and as part of the renewal process, all CFP® practitioners must voluntarily disclose any public, civil, criminal, or disciplinary actions that may have been taken against them during the previous two years.
