Certified Financial Planner

Last updated

The Certified Financial Planner certification is a professional certification mark for financial planners conferred by the Certified Financial Planner Board of Standards (CFP Board) [1] in the United States, and by 25 other organizations affiliated with the Financial Planning Standards Board (FPSB), [2] the owner of the CFP mark outside of the United States. The certification is generally considered the gold standard in the financial planning industry. [3] The certification is managed by the Certified Financial Planner Board of Standards, Inc. (CFP Board), which was founded in 1985 as a 501(c)(3) non-profit organization; it is neither a government designation nor an accredited degree.

Contents

To receive authorization to use the designation, a candidate must meet education, examination, experience, and ethics requirements and pay an ongoing certification fee. [4]

In the United Kingdom, the CFP licence/designation is available to financial planners through membership of the Chartered Institute of Securities & Investment (CISI). [5]

Requirements for initial certification

For initial certification, an individual must meet four categories of requirements: education, examination, experience, and ethics.

Education requirements

The candidate must have a bachelor's degree (or higher), or its equivalent in any discipline, from an accredited college or university. [6] [7] The bachelor's degree requirement may be completed after passing the CFP exam (within five years) and is not a requirement to be eligible to take the CFP Board Certification Examination. [8] As a first step to the present CFP certification criteria, students must master a curriculum of approximately 100 topics on financial planning. [9]

Individuals holding professional designations pre-approved by the CFP Board, which include attorneys, Certified Public Accountants (CPAs), Chartered Certified Accountants (CCAs), Chartered Accountants (CAs), Chartered Wealth Managers (CWMs), [10] Chartered Life Underwriters (CLUs), Chartered Financial Consultants (ChFCs), and Chartered Financial Analysts (CFAs) are all entitled to register for and take the exam without having to complete the education requirements, by using the CFP-board's "challenge" status. PhDs in business or economics are also exempted from the educational requirements.[ citation needed ]

Individuals who seek to challenge the CFP certification exam must take a financial planning capstone course before sitting for the exam. [11]

Foreign degrees may be substituted for a U.S. degree if they receive equivalency from a third-party organization. The CFP Board began requiring a college education in 2008. In the early years, for the first 25,000 CFP members, candidates could take the five courses and achieve certification without a comprehensive exam. In 1991 a comprehensive exam became required for new students. [12]

The CFP board and other organizations have communicated with the Consumer Financial Protection Bureau to augment accredited degree standards and ranking of professional designations. [13]

The CFP Certification Examination is a multiple choice, computer-based exam consisting of 170 questions, broken into two sessions separated by a 40-minute break. Candidates have up to three hours to complete each session. [14] The exam includes two case studies, multiple mini-case problem sets and stand-alone questions designed to assess the student's ability to apply their knowledge of the aforementioned areas to financial planning situations.

Students and certificants must adhere to the CFP Board Code of Ethics & Professional Responsibility and the Financial Planning Practice Standards. Registered investment advisors have a fiduciary duty to care for investments. [15] The CFP Board can enforce them through its Disciplinary Rules and Procedures.

Renewal of certification

To maintain certification, in the United States, license holders are required to complete thirty hours of continuing education, of which two hours must be board-approved Ethics CE, and the remaining 28 are General CE. [16]

There are over 208 designations available for financial-services professionals. [17] These are some of the more common designations.

See also

Related Research Articles

Professional certification, trade certification, or professional designation, often called simply certification or qualification, is a designation earned by a person to assure qualification to perform a job or task. Not all certifications that use post-nominal letters are an acknowledgement of educational achievement, or an agency appointed to safeguard the public interest.

<span class="mw-page-title-main">Stockbroker</span> Professional who buys and sells shares for others

A stockbroker is an individual or company that buys and sells stocks and other investments for a financial market participant in return for a commission, markup, or fee. In most countries they are regulated as a broker or broker-dealer and may need to hold a relevant license and may be a member of a stock exchange. They generally act as a financial advisor and investment manager. In this case they may also be licensed as a financial adviser such as a registered investment adviser.

<span class="mw-page-title-main">Certified Public Accountant</span> Title of qualified accountants in many countries

Certified Public Accountant (CPA) is the title of qualified accountants in numerous countries in the English-speaking world. It is generally equivalent to the title of chartered accountant in other English-speaking countries. In the United States, the CPA is a license to provide accounting services to the public. It is awarded by each of the 50 states for practice in that state. Additionally, all states except Hawaii have passed mobility laws to allow CPAs from other states to practice in their state. State licensing requirements vary, but the minimum standard requirements include passing the Uniform Certified Public Accountant Examination, 150 semester units of college education, and one year of accounting-related experience.

<span class="mw-page-title-main">Certified Management Accountant</span> Professional credential

Certified Management Accountant (CMA) is a professional certification credential in the management accounting and financial management fields. The certification signifies that the person possesses knowledge in the areas of financial planning, analysis, control, decision support, and professional ethics. There are many professional bodies globally that have management accounting professional qualifications. The main bodies that offer the CMA certification are:

  1. Institute of Management Accountants USA;
  2. Institute of Certified Management Accountants (Australia);
  3. Certified Management Accountants of Canada.
<span class="mw-page-title-main">Canadian Securities Institute</span> Canadian organization

The Canadian Securities Institute is a Canadian organization that offers licensing courses, advanced certifications, continuing education and custom training for financial services professionals in Canada and internationally.

The Chartered Financial Analyst (CFA) program is a postgraduate professional certification offered internationally by the US-based CFA Institute to investment and financial professionals. The program teaches a wide range of subjects relating to advanced investment analysis—including security analysis, statistics, probability theory, fixed income, derivatives, economics, financial analysis, corporate finance, alternative investments, portfolio management—and provides a generalist knowledge of other areas of finance.

<span class="mw-page-title-main">Association of Chartered Certified Accountants</span> Global professional organization

Founded in 1904, the Association of Chartered Certified Accountants (ACCA) is the global professional accounting body offering the Chartered Certified Accountant qualification (ACCA). It has 240,952 members and 541,930 future members worldwide. ACCA's headquarters are in London with principal administrative office in Glasgow. ACCA works through a network of over 110 offices and centres in 51 countries - with 346 Approved Learning Partners (ALP) and more than 7,600 Approved Employers worldwide, who provide employee development.

<span class="mw-page-title-main">Financial planner</span> Professional who prepares financial plans for people

A financial planner or personal financial planner is a qualified financial advisor. Practicing in full service personal finance, they advise clients on investments, insurance, tax, retirement and estate planning.

The American Institute of Certified Planners (AICP) is the American Planning Association's professional institute. AICP certifies professionals in the United States in the field of town planning and assists planners in the areas of ethics, professional development, planning education, and the standards of planning practice. Members of AICP pledge to adhere to a detailed Code of Ethics and Professional Conduct. Once certified, professional planners may place the designation "AICP" after their name to indicate their membership in AICP, and their mastery of the principles, skills, knowledge, and experience determined by the organization as essential for a professional planner.

<span class="mw-page-title-main">American Academy of Financial Management</span> US certifying body

The American Academy of Financial Management (AAFM) was a US-based board of standards, certifying body, and accreditation council focused on the finance sector and wealth management professionals. AAFM was superseded by the Global Academy of Finance and Management (GAFM).

Uniform Investment Adviser Law Examination, also called the Series 65 exam, is a test taken by individuals in the United States who seek to become licensed investment adviser representatives. The exam covers topics necessary to provide investment advice to clients.

<span class="mw-page-title-main">Institute of Public Accountants</span> Australian professional body

The Institute of Public Accountants (IPA) is one of the three legally recognised professional bodies for accountants in Australia. The IPA represents more than 40,000 members and students working in industry, commerce, government, academia and professional practice.

Following is a partial list of professional certifications in financial services, with an overview of the educational and continuing requirements for each; see Professional certification § Accountancy, auditing and finance and Category:Professional certification in finance for all articles. As the field of finance has increased in complexity in recent years, the number of available designations has grown, and, correspondingly, some will have more recognition than others. Note that in the US, many state securities and insurance regulators do not allow financial professionals to use a designation — in particular a "senior" designation — unless it has been accredited by either the American National Standards Institute or the National Commission for Certifying Agencies.

The Chartered Financial Planner is a qualification for professional financial planners and financial advisers awarded by the Chartered Insurance Institute.

<span class="mw-page-title-main">Chartered Institute for Securities & Investment</span> UK professional association for the financial planning industry

The Chartered Institute for Securities & Investment (CISI) is a global professional body for those in the financial and investment profession. It offers a range of qualifications and resources for professional development, as well as setting standards of conduct and ethics for those in the industry.

Certified Financial Planner Board of Standards, Inc., an American 501(c)(6) nonprofit organization, sets and upholds standards for financial planning and administers Certified Financial Planner certification - widely recognized by the public, advisors, and firms as the standard for financial planners - so that the public has access to the benefits of competent and ethical financial planning. CFP certification is held by more than 95,000 people in the United States.

Chartered financial consultant (ChFC) is the "advanced financial planning" designation awarded by The American College of Financial Services. Charter holders use the designation ChFC on their resumes and are qualified to provide comprehensive advanced financial planning for individuals, professionals, and small business owners. The authority to use the ChFC mark is granted by the Certification Committee of the Board of Trustees of The American College, and is contingent on adherence to a set of ethical guidelines. According to the American College, "[a]ll ChFC advisors are required to do the same for clients that they would do for themselves in similar circumstances, the standard of ethical behaviour most beneficial for their clients." Since 1982, approximately 40,000 people have earned the ChFC through regionally accredited program courses and exams. Successful completion of the ChFC qualifies designees to register as an Investment Adviser Representative (IAR) with FINRA without sitting for the Series 65 examination.

The Investments and Wealth Institute (IWI), previously known as Investment Management Consultants Association (IMCA), was founded in 1985 in Colorado to provide investment consulting and wealth management credentials and educational offerings for its members. IMCA is both a certification organization and a membership association.

<span class="mw-page-title-main">CPA Canada</span>

Chartered Professional Accountants of Canada is the national organization representing the Canadian accounting profession through the unification of the three largest accounting organizations: the Canadian Institute of Chartered Accountants (CICA), the Society of Management Accountants of Canada and Certified General Accountants of Canada (CGA-Canada), as well as the 40 national and provincial accounting bodies. It is one of the largest organizations of its type in the world, with over 217,000 Chartered Professional Accountants in Canada and around the world.

References

  1. ↑ "CFP Board". Cfp.net. Retrieved 2013-06-15.
  2. ↑ "Financial Planning Standards Board". FPSB. Retrieved 2013-06-15.
  3. ↑ "What Does Your Advisor's Designation Mean?". Investopedia. Retrieved 2022-09-03.
  4. ↑ "CFP Certification Requirements". CFP Board. Retrieved January 15, 2013.
  5. ↑ "Chartered Institute for Securities & Investment (CISI)". cisi.org. Retrieved 2017-07-12.
  6. ↑ "CFP exam details". Cfp.net. 2014-06-10. Archived from the original on 2011-01-29. Retrieved 2014-07-20.
  7. ↑ "How to Become A Financial Planner - Work At Home Business As A Certified Advisor - Some Certifications Do Not Require College Degree". Archived from the original on 2006-06-13.
  8. ↑ Official page
  9. ↑ "Financial Planning Topic List", CFP.net
  10. ↑ Professional designations
  11. ↑ "CFP certification education and challenge requirements". Cfp.net. 2012-01-01. Archived from the original on 2010-12-30. Retrieved 2014-07-20.
  12. ↑ "Turning points in the Development of CFP Exam Requirements". Business Coach USA. Retrieved 2014-12-02.
  13. ↑ Yager, Fred (2012-10-02). "How much certificates really mean". News.efinancialcareers.com. Retrieved 2013-06-15.
  14. ↑ "About the Exam". CFP Board. Retrieved 2017-08-18.
  15. ↑ "Choosing a Financial Advisor" Archived July 11, 2011, at the Wayback Machine , Financialadvisorbooks.com, Accessed: Jan 21, 2010.
  16. ↑ "Continuing Education FAQs". www.cfp.net. Retrieved 2022-04-08.
  17. ↑ "Alphabet Soup". Wall Street journal. Retrieved 16 October 2010.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.