How to Become a Certified Financial Planner (CFP)
Becoming a Certified Financial Planner takes some planning and dedicated effort, resulting in an achievement to be proud of and a lucrative career. Certified Financial Planners can have careers in a variety of places including finance firms, investment houses or insurance companies. Many CFPs decide to start up their own business offering financial planning services.
There are four distinct steps required by the CFP Board in order for one to become a Certified Financial Planner:
- Education- there are several educational requirements in the pursuit of financial planning certification. One of these requirements is the completion of a registered financial planning degree program at an accredited university or college. Once the student has completed all of the course work in such a program, they are eligible to take the CFP Board examination. Another requirement is a bachelor’s degree in any area of study from an accredited university or college. However, once the financial planning course work is completed and the degree or certification obtained, the candidate can take the CFP exam and pursue the bachelor’s degree within five years after passing the exam. In essence, the bachelor’s degree is not required prior to sitting for the examination, but the completion of the financial planning program must be done before eligibility for testing.
- Exam- the Certified Financial Planning Board examination that must be passed is an intensive exam covering a multitude of topics. The idea is not to measure the candidate’s financial planning knowledge as much as it is to measure problem solving skills and general knowledge that benefits the field. The CFP exam is a ten hour multiple choice exam given over the course of two days. The exam is offered three times per year at 50 locations domestically. Candidates apply to sit for the examination on their own; the schools do not do it for them. The schools where students complete their financial planning course work do, however, notify the CFP Board of student eligibility. The application process can be done through the mail or online and there is a $595 fee that must be paid before taking the test.
- Experience- the Certified Financial Planning Board requires each candidate to perform three years of full time work experience in the field. This can be a variety of things from providing personal financial services to clients, selling and advising about insurance, teaching financial planning to others or retirement counseling. This experience can be gotten in the ten years before the examination or within five years after passing of the exam.
- Ethics- all candidates for the CFP exam must agree to follow the Board’s Code of Ethics in that the client’s interests will always come first and the CFP will always act in a professional manner. The CFP also agrees that the Board will enforce the Code of Ethics how they see fit.
Becoming a Certified Financial Planner is often a good career move, especially for professionals who have already worked in related fields during their careers. The future of the financial planning field is a bright one, with new CFPs making a yearly salary ranging from $20,000 to $40,000 while more experienced Certified Financial Planners can make $90,000 per year. CFPs can find work in a variety of financial institutions or set up business for themselves, meeting customer financial needs.