Three-fourths of Millionaire investors want their financial advisor to have professional certifications.
According to Spectrem’s quarterly report Advisor Relationships and Changing Advice Requirements, 75 percent of Millionaire investors want their financial advisor to have a professional certification such as a Certified Financial Planner.
Certified Financial Planner is an official designation from the national Certified Financial Planner Board of Standards, which administers a CFP certification process that includes extended education, examinations, and years of experience in financial planning and ethical requirements, known as the “Four Es.”
A Certified Financial Planner has done a lot of work to get where he or she is today. A CFP is required to take courses in estate planning, insurance, investing, retirement and taxes, as well as a 10-hour, 285-question exam. They must pass the CFP’s ethical requirements, and serve a two-year apprenticeship under an established CFP.
The advantage of a CFP is that he or she can answer almost any question, up to a point. They are like a general practicioner in medicine. They have as much or more general knowledge than any other kind of financial planner. The CFP title is considered the most prestigious title among financial planners.
The education tenet of being a CFP requires study at a college or university offering a financial planning curriculum approved by the CFP Board. It is possible to use previous financial planning-related coursework that has to be approved by the CFP board, or showing the attainment of certain professional designations or academic degrees.
The examination passed by CFPs is a two-day, 10-hour test that challenges their ability to apply financial planning knowledge in a precise manner, just as active CFPs do. The test covers financial planning, tax planning, employee benefits, retirement planning, estate planning and insurance.
The CFP board also requires three years of practical experience in the financial planning field. Meaning CFPs have already practiced counseling clients on financial issues, as well as have the knowledge that will allow them to pass the test.
Finally, a CFP is required to agree to abide by a strict code of conduct related to the job. The CFP Board’s Code of Ethics and Professional Responsibility states that a CFP has ethical responsibilities to the public, clients and employers. The CFP also conducts a background check on the prospective certified financial planner, and the candidate must disclose any investigations or legal proceedings from a professional standpoint that they have deal with.
Kent McDill is a staff writer for Millionaire Corner. McDill spent 30 years as a sports writer, working for United Press International and the Daily Herald of Arlington Heights, Ill. From 1988-1999, he covered the Chicago Bulls for the Daily Herald, traveling with them every day through the nine-month season. He also covered the Bulls for UPI from 1985-88, and currently covers the team for www.nba.com. He has written two books on the Bulls, including the new title “100 Things Bulls Fans Should Know And Do Before They Die’, published by Triumph Books. In August 2013, his new book “100 Things Bears Fans Should Know And Do Before They Die” gets published.
In 2008, he resigned from the Herald and became a freelance writer. The Herald hired him to write business features and speeches for the Daily Herald Business Conferences and Awards presentations.
McDill also writes a monthly parenting column for the Herald’s Suburban Parent magazine.
McDill is the father of four children, and an active fan of soccer, Jimmy Buffett and all things Disney.