Passing the CFP will confirm your skills and proficiency in applying financial planning principles.
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Financial planners help people deal with different personal financial issues through proper planning. Financial planning looks into the big picture when providing professional assistance to help meet the client's financial needs.
The financial planning process works by setting goals with client, gathering relevant information, analyzing the information, constructing a plan, implementing the plan, and monitoring the outcome (six-step financial planning process by the ISO). Financial planners provide services focused on business and investment, education, retirement, insurance, tax, estate, debt management, and other financial issues.
The Certified Financial Planner (CFP) has gained valuable recognition along with today's increasing popularity of general and personal finance strategies. It is the most recognized financial planning credential in the world; getting certified will provide a significant plus in your craft.
Your career as a CFP will be filled with opportunities. Clients trust professionals who have proven themselves through education and experience. Moreover, passing the CFP examination will confirm your knowledge and proficiency in applying financial planning principles.
To become a CFP, you need to meet a set of rigourous requirements:
Education Requirements
The CFP Board sets the basic education requirements. You must be proficient with financial planning topics such as general principles of financial planning, insurance planning and risk management, employee benefits planning, investment planning, income tax planning, retirement planning, and estate planning.
Starting 2012, candidates are required to complete a financial planning development course registered with the CFP Board.
In addition to completing courses that cover the financial planning topics required for CFP certification, a bachelor's degree (or higher), or its equivalent, in any discipline, from an accredited college or university is required to attain CFP certification.
You are allowed to take the CFP examination even without a bachelor's degree. After passing, you are required to present evidence that you hold a bachelor's degree or higher. This must be done within 5 years from date you pass the CFP exam.
Candidates holding specific academic degrees and professional credentials, i.e. Chartered Financial Consultant (ChFC), Chartered Life Underwriter (CLU), Chartered Financial Analyst (CFA), Ph.D. in Business or Economics, Doctor of Business Administration, Licensed Attorney, and Certified Public Accountant (CPA), will automatically be eligible to apply and take the CFP examination. They are considered to have fulfilled the education requirements.
The CFP Examination
You can apply for the CFP Certification Examination when you have successfully fulfilled the education requirement. The CFP Exam is geared towards measuring your ability to apply financial planning concepts to real-life situations rather than merely remembering them.
The CFP Exam is provided in 3 sessions, 10 hours in total - 4 hours on the first session during the first day and 3 hours each for the second and third sessions on the second day. The exam is held three times a year, generally on the third Friday and Saturday of March, July and November.
Questions are provided in multiple choice format. The CFP Examination is a pass-fail exam having no candidate rankings. Results of the examination will be available online and through mail.
Experience Requirements
To be granted the CFP certification, exam passers should have at least three years of full-time (or part-time consisting of 2,000 hours per year) relevant personal financial planning experience.
Such experience must fall within the six primary elements of financial planning, i.e. Establishing and Defining the Client Relationship, Gathering Client Data and Goals, Analyzing and Evaluating the Client's Financial Status, Developing and Presenting Financial Planning Recommendations and Alternatives, Implementing the Financial Planning Recommendations, and Monitoring the Financial Planning Recommendations.
Successful examinees will be given instructions for reporting work experience.
Other Requirements
After completing the requirements above, the CFP Board will determine if you are fit for certification and give the final verdict. The CFP Board will also require you to agree to adhere to the CFP Board's Code of Ethics and Professional Responsibility, Rules of Conduct, and Financial Planning Practice Standards.
Certified Financial Planners must meet 30 hours of Continuing Education and pay annual licensing fees every two years to maintain certification.
To know more about the CFP, visit the CFP Board Website for CFP in the U.S. or the FPSB Website for a list of international CFP affiliates.
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