What Is a CFP®? | Long Island Financial Advisor


Strangely enough, the first question I hear from prospective clients usually is not, “When can I retire?” or “How much should I be putting into my child’s college fund?”

Instead, after looking at my business card, they usually say: “What do all those letters after your name mean?”

That alphabet soup of acronyms can be confusing, but folks particularly need to know about one significant credential: CFP®, which stands for Certified Financial Planner®. CFP® is a professional designation granted by the Certified Financial Planning Board of Standards to those who have obtained extensive experience, completed various requirements, and passed complicated certification exams.

Just about anyone can call themselves a financial advisor, but know this — not everyone is a CFP®. Professionals must earn this distinguished qualification through hard work, a lot of studying, and skill. And just as important, one major hallmark of a CFP® is that he or she has pledged to act in a client’s best interest at all times.

To learn more, read on for my answers to some of the most common questions asked about this important designation.

What kind of special training does a CFP® have to go through?

There are rigorous education and testing requirements for anyone wanting to become a CFP®. Candidates must complete courses in personal finance, insurance, investing, estate planning, retirement planning, tax planning, employee benefits and other topics. They must have a bachelor’s degree and three years of related experience — or a two-year apprenticeship under a CFP® and must pass the comprehensive CFP® exam administered by the CFP® Board of Standards.

Are CFPs® held to a higher standard than others in the field?

CFPs® must abide by a code of ethics and rules of professional conduct adopted by the Certified Financial Planner Board of Standards. When applying for the designation, CFPs® are asked to disclose information about involvement in criminal, civil or governmental proceedings, bankruptcy, customer complaints or problematic internal reviews by their employer. The board also conducts a detailed background check for all candidates. Once certification is granted, it can be suspended or revoked if any standards are violated.

CFPs® must also complete 30 hours of continuing education every two years, including two hours of ethics training approved by the board so that they remain up to date with any changes, tax code, insurance regulations and many other areas in the industry.

What kind of approach do CFPs® take when evaluating a client’s financial plan? Do they focus on areas that other advisors might not?

Most CFPs® take a holistic approach when planning for their clients. Many times, people simply have a planner look at investments – which is fine – but a more comprehensive plan done by a qualified CFP® analyzes every part of one’s finances. It gives a complete financial picture and provides a realistic road map for a client’s future.

Why is it critical for clients to understand the meaning of this designation?

CFPs® have the knowledge to help with real life decisions. They also advise clients on ways to protect assets and make sure wishes are granted upon death. Many CFPs® are like a quarterback on a football team; they coordinate with their client’s accountant, attorney and other advisors to ensure the clients goals are being achieved in a well-managed fashion.

If you would like to discuss your family’s financial future with a professional Wealth Advisor at R.W. Rogé & Company, Inc., please call 631-218-0077, e-mail info@rwroge.com, or contact us here.

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