Should Your Financial Advisor Be A Certified Financial Planner?

Looking for a financial advisor? Be careful — the term “financial advisor” is a fairly broad one that covers many different levels of qualifications. There is not a single standardized requirement for financial advisors in all states across the U.S. to have a minimum level of education, experience, or ethics to offer their services.

To make matters more confusing, there are many variations out there with advisor titles and terminology — whether it be investment advisors, financial planners, stockbrokers, registered representatives, or others.

Financial planner and his client
photo credit: Gustavo Fring / Pexels

The good news is that there is one financial advisor title that stands out from the rest and universally levels the playing field for you: the Certified Financial Planner®, or CFP® certification.

More About the CFP® Designation

The Certified Financial Planner® Board of Standards, or CFP® Board, was established in 1985. It is an independent, non-profit organization that requires certain education and ethics standards among its members.

Over 89,000 financial planners use the Certified Financial Planner® certification in the United States1 but interestingly that only equates to about 1 out of 5 financial advisors in the U.S.

Why are there relatively few financial advisors that avail themselves of the Certified Financial Planner® certification? The primary reason is that obtaining the CFP® designation is not automatic or easy. Financial advisors that wish to use the title of CFP® must first accomplish the following:

  • Obtain a bachelor’s degree;
  • Complete financial planning coursework through a CFP® Board-registered program. This can take 12-18 months on average to complete2;
  • Pass a 170-question, six-hour exam;
  • Finish at least 6,000 hours of professional financial planning experience (or complete 4,000 hours of apprenticeship experience3);
  • Sign an Ethics Declaration, which certifies that their practice will be ethical, and they will act as a fiduciary to their clients.

The CFP® testing curriculum is also very comprehensive, covering all facets needed across the practice of financial planning. These areas include topics such as investments, retirement, taxes, estates, insurance, risk management, and ethics. To pass the exam, CFP® candidates will need to become knowledgeable across all these subjects.

Businessman meeting with his financial planner

A CFP® Certification Has Its Benefits

The process of searching for a financial advisor requires due diligence on an advisor’s background. The good news is that the CFP® Board has already done some of the work for you. You can save yourself from a lot of time, effort, and frustration by selecting from a list of financial advisors who can use the Certified Financial Planner® designation.

Modera is proudly a fee-only and independently owned financial planning firm that acts as a fiduciary for our clients. We have built our organization to put our clients’ interests first.

Call Modera and our Atlanta financial advisors to learn more and set up an initial meeting with our team.

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