Most people think that all financial planners are “certified”, but this isn’t necessarily true. Just about anyone can call himself or herself a “financial planner.” However, only those who have fulfilled the certification and renewal requirements of CFP Board can display the CFP® certification marks.
When selecting a financial planner, you need to feel confident that the person you choose to help you plan for your future is competent and ethical. The CFP® certification can help to provide that sense of security by allowing only those who meet the following requirements the right to use the CFP® certification marks.
Individuals certified by CFP Board have taken the extra step to demonstrate their professionalism by voluntarily submitting to the rigorous CFP® certification process that includes demanding education, examination, experience and ethical requirements. These standards are called “the four E’s,” and they are four important reasons why the financial planning practitioner you select should display the CFP® certification marks.
CFP®: THE FOUR E’S
Education: CFP® professionals must develop their theoretical and practical financial planning knowledge by completing a comprehensive course of study at a college or university offering a financial planning curriculum approved by CFP Board. Other options for satisfying the education component include submitting a transcript review or previous financial planning-related coursework to CFP Board for review and credit or showing the attainment of certain professional designations or academic degrees.
Examination: CFP® practitioners must pass a comprehensive two section, seven-hour CFP® Certification Examination. The exam covers 7 key area of financial planning:
• financial planning process
• tax planning
• employee benefits
• retirement planning
• estate planning
• investment management
Experience: CFP® professionals must have three years’ minimum of relevant experience in the financial planning field prior to earning the right to use the CFP® certification marks.
Ethics: As a final step to certification, CFP® practitioners agree to abide by a strict code of professional conduct, known as CFP Board’s Code of Ethics and Professional Responsibility, which sets forth their ethical responsibilities to the public, clients and employers. CFP Board also performs a background check during this process, and each individual must disclose any investigations or legal proceedings related to their professional or business conduct.
HOW THE CFP BOARD'S CODE OF ETHICS BENEFITS YOU
Through the Code of Ethics and Standards of Conduct, CFP® practitioners agree to act fairly and diligently when providing you with financial planning advice and services, putting your interests first. The Code of Ethics states that CFP® practitioners are to act with integrity, offering you professional services that are objective and based on your needs.
This Code of Ethics and Standards of Conduct were modified as of October 1, 2019. The changes to the Code of Ethics revolved around holding all CFP® professionals in a fiduciary capacity.
ONGOING CERTIFICATION REQUIREMENTS
Once certified, CFP® practitioners are required to maintain technical competence and fulfill ethical obligations. Every two years, they must complete a minimum 30 hours of continuing education to stay current with developments in the financial planning profession and better serve clients. Two of these hours are spent studying or discussing CFP Board’s Code of Ethics or Practice Standards. In addition to the biennial continuing education requirement, all CFP® practitioners voluntarily disclose any public, civil, criminal or disciplinary actions that may have been taken against them during the previous two years as part of the renewal process.