What is a Certified Financial Planner?

Individuals unfamiliar with the financial world often ask, “What is a Certified Financial Planner?” Certified Financial Planners (CFP) are often confused with financial planners or Certified Financial Analysts (CFA). As similar as their professions are to each other, they each have their own characteristics and qualifications. The ability to work with money and help others plan their financial futures is often the main reason by someone chooses to become a Certified Financial Planner. Learn everything you need to know about certified financial planners.

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What They Do

Certified financial planners advise clients on investments, taxes, estate planning, insurance, mortgages, retirement, and anything money or finance-related. The CFP meets with clients to determine the client’s financial goals, studies the client’s financial status, and educates clients on investment options or potential risks.

In addition to performing financial analytics, the CFP makes recommendations to the client based on their findings. CFPs may work as part of an investment firm or may work independently. They are required to be current on all the financial and marketing trends so that they can provide their clients with the best advice. Certified financial planners work with individuals, couples and large companies. Certified financial planners may work as wealth managers, financial advisors or financial planners.

How to Become a Certified Financial Planner

There are a few different paths towards becoming a Certified Financial Planner, but they all involve having at least a bachelor’s degree. Individuals must complete a CFP board-registered education program. There are more than 300 such programs in the United States, and they come in the form of undergraduate degrees, graduate degrees, and certificate programs.

Although the candidate must have at least a bachelor’s degree, it can be in any discipline. The bachelor’s degree is not required for eligibility to take the CFP® Certification Examination, but it is required for initial certification. Once the candidate passes the CFP® Certification Examination, he or she must provide proof of having a bachelor’s degree.

Students must pass the two-day, 10-hour exam to be eligible for certification. The candidate can satisfy the educational requirement if he has one of these credentials.

• Certified Public Accountant (CPA)

• Chartered Financial Analyst (CFA®)

• Chartered Financial Consultant (ChFC)

• Licensed Attorney

• Doctor of Business Administration

• Chartered Life Underwriter (CLU)

• Ph.D. in economics or business

Career Outlook

The U.S. Bureau of Labor Statistics (BLS) does not give specific career information on certified financial planners but does offer it for financial analysts, which is also the title held by many CFPs. Financial analysts should see a 7 percent job growth between 2018 and 2028 according to the bureau. Those who have the CFP® credential should see the best career opportunities and should experience the highest wages.

Personal financial advisors earned an average annual wage of $121,770 as of May 2018, but wages ranged from $41,590 to $157,710. This wage information came from the BLS. PayScale reports that the average wage for CFPs was $66,597 as of September 2019. The five top-paying states for personal financial advisors are New York, District of Columbia, Wyoming, Maine, and North Carolina.

This career requires education, training, experience, and certification, but it also offers many rewards. What many don’t realize is that working as a certified financial planner can also be a lot of fun, especially when you’re helping to make positive changes in their financial status.