Eddie is one of the founders and a financial planner at Wela, and in 14 days he’ll be taking a test to become a CERTIFIED FINANCIAL PLANNER™ professional. We sat down with Eddie to learn what this means, and why he believes it’s helpful for people looking to hire a financial planner. Q: Let’s start with the basics. What is required to just be a normal financial planner?
Eddie: Generally speaking, the main requirement for working in financial planning is passing the various licensing exams that FINRA requires (Series 7, Series 63, Series 65, etc.). These exams are required for anyone providing financial advice or service, and essentially ensures that people charging for financial advice and service know what they’re doing. After that, it’s a matter of getting a job with a firm and building experience.
Q: So how if that different from someone with a CERTIFIED FINANCIAL PLANNER™ certification?
Eddie: To be a CFP® (or CERTIFIED FINANCIAL PLANNER™) practitioner means that on top of the normal regulations and standards in the industry, you’re also held to the Certified Financial Planner Board of Standards Inc.’s (CFP Board) code of ethics and standard of conduct. You can be reprimanded by this board if you don’t uphold the requirements of the CFP® mark. While many financial planners are held to a fiduciary standard, meaning that they must act in the best interest of their clients, a CFP® practitioner is actually held to an even higher standard.
On top of these high standards and a controlling board that you need to report to, CFP® professionals are also required to take a certain number of continuing education courses every two years to maintain their mark. This means that a CFP® practitioner should always be aware of the latest changes in regulations and ethics.
Q: Whoa, that’s a lot to keep up with. Why would you or any advisor want to be a CFP® practitioner?
Eddie: There are a lot of benefits to being a CFP® practitioner. For one thing, it’s a way to be sure that I can increase my service capacity because I have to be up to date on the latest changes in the industry. It also quickly informs people that I know what I’m doing. That actually makes me think of a funny commercial that the CFP board put out about how difficult it can be to spot a financial planner.
Q: That makes sense. Well, then what’s required to become a CFP® professional?
Eddie: There is a lot that goes into actually becoming a CFP® professional. First you need to have at least three years of experience working in the industry and providing financial advice for compensation. They also have an education requirement specific to being a CFP® practitioner. Personally, I took a year of night school at UGA’s Buckhead location with six difference courses. You have to learn about insurance, taxes, estate planning, retirement planning, investments and the general principles of ethics and code of conduct.
After the class, you spend about 120 to 150 hours studying for the board exam. I put together a pretty great study space in my house since I knew I'd be spending almost a full week of my life studying here.
The Board exam is a 6-hour, 170 question test that covers all areas of financial planning. The exam is offered three times per year.
There’s a lot to it, and you typically see the size of the class start pretty large and then shrink throughout the year as people who maybe aren’t as dedicated to getting the certification drop out. A lot of people become a financial planner after starting their career in another field. Some people use the CFP® exam and class to dip their toes into the industry water, and not all of them like it.
Q: Okay, all this sounds great, but why should someone looking for financial help hire a CFP® professional over just a regular financial planner?
Eddie: Because you immediately know that they can put in the work! If someone’s worked hard enough to actually become a CFP® practitioner you know that they’ll work hard for you. You’re also sure that they’re well rounded in the different areas on financial planning, and most likely up to date on the latest rules and regulations. Essentially it’s proof that you’re hiring someone with aptitude and not just some dude… like what I did there?
We’ll let Eddie get back to studying. Shoot him your good wishes at email@example.com.
Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, Certified Financial Planner™ and federally registered CFP (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.