A Certified Financial Planner (CFP) is a professional who helps people reach their financial goals by helping them with investments, retirement planning, tax laws and insurance needs. As a financial advisor, a CFP works with individuals and corporations by analyzing their client’s present status and developing a strategy to reach long-term financial objectives.

Benefits of Becoming Certified

The Certified Financial Planner Board of Standards, Inc. (CFP Board) is an organization that sets and maintains the standards for professional financial advisors. Professionals wishing to become certified must not only meet these standards, but must also pass an exam demonstrating their competencies in the financial field. The credentials that come with the certification are highly regarded within the industry of financial planning. A CFP certificate equates to being professional, ethical, respected and knowledgeable. CFPs are highly sought after as they possess a special set of skills allowing them to effectively manage and monitor client’s accounts.

A well experienced Certified Financial Planner has a great potential for high income, as well as an opportunity to retain his clients long-term by establishing his expertise within the field. In comparison to non-certified professionals, CFPs earn an average of $215,000 annually. While the income potential is virtually limitless, it greatly depends on personal skills as well as the ability to provide sound financial advice to clients who can profit from it for many years.

Duties of a Financial Planner

CFPs provide advice on a variety of topics, and some prefer to specialize in certain areas such as estate planning or investment risk management. The client’s personal portfolio is created, monitored and adjusted according to the existing circumstances and additional options as they become available. Both the financial advisor and the client receive regular investment reports and confer with each other continuously to ensure the growth of the accumulated wealth.

In many cases, the advisor may obtain the client’s permission to buy and sell stocks and bonds, as well as annuities and other financial products, on the client’s behalf. This function becomes especially important when dealing with clients who possess a substantial amount of money and are interested in significant multiplication of their funds. These types of financial planners work with a collection of investments and become a part of the team that is composed of accountants, financial analysts and other professionals.

Many CFPs build their clientele by marketing and advertising their services, social networking, conducting seminars nationwide, creating relationships with local businesses and exchanging information with people of similar interests.

Path To Become a CFP

For those considering becoming a CFP, it is important to understand the four components of certification.  Known as the four Es, they include:

  • Education – candidates must have completed at least a Bachelor’s degree, with study in the area of personal finance
  • Examination – candidates must pass the certification exam, which tests the application of financial knowledge
  • Experience – candidates must have three years of experience in the financial planning process
  • Ethics – candidates must pass a background check conducted by the CFP Board

Enforcement of professional standards within the field of finances is strictly followed to ensure the code of ethics is implemented while dealing with investments of money for other people. Certified Financial Planners have to adhere to their professional responsibilities and rules of conduct, without violations or disciplinary actions taken against them, to remain in compliance at all times.