Client's Best Interest Drives Advice of Certified Financial Planners (CFP®)

Maura Schauss |

By Maura C. Schauss, CFP®

There are 135 different certifications for financial advisors, and most of them begin with the letter “C”: CFPs, ChFCs, CPAs, CLUs, CFSs, and the list goes on. With an alphabet soup of certifications, how do you find a financial professional who’s right for you?

According to a recent survey, most high-income households want their advisors to have these qualifications:[1]

  • 85% find it “very important” or “extremely important” for their advisor to have successfully completed a certification examination.
  • 95% believe their advisor should adhere to professional practice standards.
  • 97% say it’s extremely important for their advisor to adhere to a professional code of ethics.

 

That’s a tall order. But—believe it or not—it’s not impossible to find an advisor who meets these qualifications. In fact, certified financial planners (CFP®s) check all these boxes and more.

Read on as we discuss everything you need to know about the importance to you in working with a CFP®.

What Is A CFP®?

A certified financial planner (CFP®) is a financial advisor who has undergone extensive training and earned a certificate of expertise in many areas, including financial, retirement planning, tax management, investment, estate, insurance, and more.

The CFP® designation is known as the gold standard of certifications in the financial planning industry. Those who hold this qualification demonstrate an unwavering commitment to their clients, continuing education, and professionalism. 

How Does an Advisor Become A CFP®?

The certification process to become a CFP® is rigorous and time-consuming. To earn their certification, an advisor must meet requirements in these four areas:[2]

  • Formal education

This area consists of two parts. First, the advisor must hold a bachelor’s degree from an accredited university. Second, the advisor must complete a list of financial planning courses and associated exams laid out by the CFP® Board. In many cases, this coursework can take two plus years.

  • CFP® examination 

The CFP® exam is a 170-question multiple-choice exam that covers over 100 financial planning topics, including risk management, tax planning, professional conduct, and more. Only 60% of participants end up passing the exam.[3]

  • Relevant work experience

Advisors must have at least three years of full-time financial planning experience or two years of apprenticeship to qualify.

  • Professional ethics

All candidates are subject to extensive background checks and must disclose any criminal activity, bankruptcies, customer complaints, and so on to the CFP® Board.

Combined, these areas ensure each and every CFP® has the highest financial planning expertise and professionalism in the industry. Please know that an accelerated track to the CFP® designation does exist for certain experts (i.e. CPAs and CFAs), allowing them to bypass a portion of the education requirement.

How Does a CFP® Retain Their Certification?

Once an advisor is a CFP®, they must renew and maintain their certification every two years, which includes completing 30 hours of continuing education in their area of expertise. This means every CFP® stays up to date on the latest trends and changes in the financial planning industry because they’re always learning.

Why Is It Important As An Investor To Work With A CFP®?

There are five major reasons why every investor should work with a CFP®:

  • CFP®s must meet rigorous qualifications.

If someone has a CFP® certification, they’ve earned it. The certification process is long and tedious and only those who are fully dedicated to financial planning end up meeting the requirements. It’s known as the highest standard of financial planning for a reason. 

They’re legally and ethically bound to act in your best interest at all times. Working with a CFP® means you have total peace of mind knowing they have your best interest at heart. No strings attached.

They don’t sell products or earn commissions. Instead, they give unbiased financial advice aimed at helping you reach your goals. There are no hidden agendas or conflicts of interest. Their sole mission is to see you succeed.

  • CFP®s are versatile.

Because their education spans many different areas of financial planning, CFP®s are equipped to help you with a range of financial issues, including estate planning, budgeting, tax advice, investments, and more.

Unlike other professionals who can only help you with one piece of your financial puzzle, CFP®s bring your whole financial life into view.

Who We Are

At Washington Wealth Advisors, we’re a team of dedicated CFP®s who are committed to helping you reach your financial goals. Whether you need help managing your investments, creating an estate plan, updating your insurance coverage, saving for your kids’ education, or securing your retirement, we’re here to assist you every step of the way. To learn more, call our office at 703.584.2700 or email clientservices@washingtonwealthadv.com. Or schedule a meeting with Maura.

About Washington Wealth Advisors

Washington Wealth Advisors is an independent registered investment advisory firm serving high net worth families and small businesses. We focus on holistic financial planning and comprehensive investment management. Leveraging our core strengths of unbiased, active investment management together with a detailed annual financial planning capability, we serve your comprehensive investment and financial planning needs.

 

[1] https://www.cfp.net/become-a-cfp-professional/cfp-certification-requirem...

[2] https://www.investopedia.com/terms/c/cfp.asp

[3]https://www.cfp.net/become-a-cfp-professional/cfp-certification-requirements/cfp-exam-requirement/about-cfp-exam