Do you really need a CFP?

Are you in need of advice on your finances? Should you employ a CFP? Are you unsure if you should employ the advice of a highly qualified individual, or a regular advisor?

When searching for financial advice, there are a countless number of financial advisors to choose from. This makes it a difficult process to overcome. This is one of the reasons that those with a CFP certificate can stand apart from the crowd. Their broad knowledge of financial matters means that they can advise a client on how to behave under a wide range of conditions. Their advice could have a positive effect on your financial well-being over a significant period of time.

What is a CFP certification, and why should you employ the advice of someone with it? A CFP (Certified Financial Planner) is a certificate awarded to an individual who will have demonstrated substantial financial capabilities. This could be taxes, financial planning, estate planning, and retirement.

There are of course many certifications that exist for financial services, but the CFP is considered special for several reasons. This certification demonstrates that an individual has significant financial experience and knowledge. Those applying for it must undergo many different stages in its’ acquisition. It should be noted that a central body within the U.S. regulates the certificate. This is the Certified Financial Planner Board of Standards, Inc., who ensure that those with the certificate are the top financial advisors.

Acquiring a CFP certification

Before applying for a CFP, the applicant must have demonstrated significant professional experience in finance (of at least three years), They can also have two years’ experience in an apprenticeship role. They must also present a bachelor’s (or higher) degree from an accredited university in any subject. A finance-based education can be beneficial, as it would mean that they would not be required to take select courses in financial planning. They must then take a challenging 10-hour exam to enter the program. It could cover a wide array of topics and is subject to change. Soon after this they can receive their CFP certification.

Before they do, they will have to present personal information to the board, including records on criminal activity, bankruptcies, dismissals from work, and many other factors relating to their credibility. The board also performs a background check on the individual to ensure their trustworthiness. Even if the applicant fulfills these requirements, there is no guarantee that the board will grant them the award as they carefully examine the applications individually.

If the applicant does receive the certification, they must then continue to take educational courses to keep their skills and knowledge up to date. It they do not they will lose the certification. The board for certified financial planner qualifications also displays the certification status of the financial advisor on their website. Here, you can discover whether they have violated the board’s code of ethics or have declared bankruptcy within the last ten years.  All of these barriers to acquiring the certification makes the CFP possibly the most respected qualification for a financial planner.

Quality of a CFP

This combination of rigorous financial training, knowledge, experience, credibility and ongoing education that the certification ensures, all make choosing a CFP worthwhile.

Although a CFP focuses primarily on financial strategy, and not on more technical areas such as budgeting and investing, their services can be invaluable. Of course, an advisor with a CFP can also have an additional certificate, such as the CPA. This will make them an even more invaluable financial advisor for a potential client.

When you may need a CFP

You can seek the help of a CFP for many different financial situations. They can be used for long- and short-term business strategies but can also be employed for personal matters. If you are making decisions as a business, you would benefit greatly from using the experience of a certified professional for designing these strategies. You can employ a CFP for personal, troubling short-term problems; this may include changes in marital status, family size, employment status, and general financial difficulties. Those with a CFP certificate can give advice on more long-term issues. This may include saving money for retirement, what insurance you may require, planning for unforeseeable future events, and estate planning.

Fees

The fees involved in working with a CPA can, however, be significant. A CFP can either present a commission-only based or a fee-only based payment scheme. A fee-only scheme could require payment of $125 to $350. The price of other advisors’ prices can be somewhat lower. A CFP’s knowledge, however, can easily compensate for their price in the profits they can offer you. The commission they can request could be at a rate of 0.5% to 1.25% from insurance or annuities. When searching for a CFP to employ, you can find them by contacting them directly. You could also contact a financial planning firm.

Conclusion

To conclude, those with a CFP certificate can be on of the best choices for you for several reasons. They have the most respected certification for financial planning; it is easy to check their ethical integrity. Although their prices can be high, they can easily compensate a client with the profits they can earn them.