Why Your Financial Advisor Should Be a CFP® Professional
With more than 100 certifications available to financial professionals, the CERTIFIED FINANCIAL PROFESSIONALTM designation stands out. One of the most notable requirements of the CFP® certificant is the fiduciary — or trustworthiness — aspect. This mandates that every CFP® certificant has to put their clients’ needs ahead of his/her own.
Another significant aspect of CFP® certification is that it requires so much preliminary work to be eligible to even sit for the exam. In addition to having a Bachelor’s Degree, the average person will spend at least 1,000 hours of study time (~20 hours a week for a year) to get through the coursework in the following areas:
- Professional Conduct and Regulation
- General Financial Planning Principles
- Education Planning
- Risk Management and Insurance Planning
- Investment Planning
- Tax Planning
- Retirement Savings and Income Planning
- Estate Planning
The overall pass rate for this exam fluctuates each time but averaged 64.4% between 2012 and 2016. After successfully passing the exam, a CFP® certificant must complete 30 hours of continuing education (CE) accepted by CFP Board every two years.
Combined with the education, experience and ethics requirements, it assures the public that a CFP® certificant has met a level of competency appropriate for professional practice.
What is the AIF® designation?
The Accredited Investment Fiduciary® designation is focused around putting standards of practice in place to ensure financial planners know how to act in a fiduciary capacity. It is centered around the practice of putting the client’s needs first.
This designation has a slant toward retirement plans such as 401(k) plans that have traditionally had a lack of understanding about their related fiduciary obligations.
This designation requires preliminary study and successfully passing the exam. It also requires an additional 6 hours of continuing education each year.