Often, letters and designations appear after financial professionals’ names and may be confusing to understand. According to a Kiplinger.com article, 5 Key Credentials to Seek in a Financial Advisor, there are more than 100 different financial advisor certifications and designations! What’s even more confusing is that sometimes, the designation and accreditation of the agency granting them have little to do with financial planning or financial advice.
That is not the case with the Certified Financial Planner (CFP®) Designation, which Kiplinger references as one of the key credentials to seek in a financial advisor. Here, we decode the CFP® designation, so you understand its significance to advisors and their clients:
What does the CFP® designation mean?
The Certified Financial Planner (CFP®) certification is the standard of financial planning excellence since financial professionals who use the designation have completed education, experience requirements, and ethics standards set by the CFP Board. CFP® certified advisors have also committed to serving their clients as fiduciaries. In working with a CFP®, you should feel confident that regardless of life changes, they have your best interest in mind and are committed to the highest standards in financial planning.
How does an advisor obtain the CFP® designation?
There are two main parts to the CFP® requirement: completing the CFP board-approved coursework and a bachelor’s degree in any discipline from an accredited college or university. As part of earning the CFP® certification, the financial professional need to complete college or university-level coursework through a CFP Board Registered Program in these significant personal financial planning areas:
- Professional Conduct and Regulation
- General Principles of Financial Planning
- Risk Management and Insurance Planning
- Investment Planning
- Tax Planning Retirement Savings and Income Planning
- Estate Planning
- Psychology of Financial Planning
- Financial Plan Development (Capstone Course)
It’s essential to note that only advisors who have met the CFP Board’s entrance requirements, passed the national exam, and completed ongoing renewal requirements of the CFP® board can display the designation’s marks.
What positions does a CFP® hold?
While every CFP® certified advisor has their areas of expertise, they often work in these unique positions:
- Financial planner- Create holistic plans to help their clients with their unique goals.
- Wealth management advisor- Develop one-on-one relationships with their clients to construct investment portfolios.
- Investment manager- Selects and manages investments on behalf of a firm and its clients.
- Financial analyst- Performs research and analysis and or manages investment options, making recommendations to advisors.
- Portfolio manager- Manages client assets and portfolios in accordance with the firm’s guidelines and contributes to research and analysis of investment opportunities and firm investment philosophy.
- Client services advisor- Prepares financial plans for review and implementation, participates in client meetings, and works on follow-ups for clients.
Source: CFP Board
At Harbor Financial Group, our team of CFP® certified advisors and wealth managers provides exceptional service with a clearly defined process designed to help you manage and preserve wealth.
