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CFP and CERTIFIED FINANCIAL PLANNER
are marks used to identify financial planners who have met the education,
examination, experience and ethics standards established by the
International Board of Standards and Practicesfor Certified Financial
Planners, Inc. (IBCFP). The IBCFP owns the marks CFP and CERTIFIED
FINANClAL PLANNER and licenses qualifiedfinancial planners to use them. The following are answers to questions frequently asked about the marks and how to choose a financial planner. What do the marks CFP and CERTIFIED FINANCIAL PLANNER mean? When you see these marks used properly by a financial planner, you are assured that the individual has met the IBCFP's education, examination and experience requirements to practice financial planning and has agreed to adhere to the IBCFP's Code of Ethics. Why do the marks CFP and CERTIFIED FINANCIAL PLANNER make a difference? These marks identify financial planner who are dedicated to a high level of professionalism. Anyone can call himself or herself a financial planner. Only those who have fulfilled the IBCFP's certification and licensing requirements may use the marks CFP and CERTIFIED FINANCIAL PLANNER. What are the IBCFP certification and licensing requirements? The requirements include: * Education: A CFP candidate must have a bachelor's degree or more than five years of financial planning related experience in addition to completing a course of study at a college or university which offers an lBCFP-registered curriculum in financial planning. * Examination: A CFP candidate must pass a rigorous 10-hour comprehensive examination administered by the lBCFP covering the financial planning process, tax planning, investments, risk management, retirement planning, employee benefits, and estate planning. * Experience: A CFP candidate must prove he or she has work experience in the financial planning field before being licensed to use the CFP mark. * Ethics. A CFP candidate must disclose to the IBCFP any investigations or legal proceedings related to his or her professional or business conduct. The IBCFP reviews all such disclosures and investigates the backgrounds of candidates whose disclosure statements indicate areas of concern. CFP candidates must also agree to adhere to the IBCFP Code of Ethics and declare they understand and agree that the IBCFP has the absolute and unrestricted right to revoke the right to use the marks CFP and CERTIFIED FlNANCIAL PLANNER if it finds that a planner has failed comply with the Code of Ethics. Does the IBCFP actively enforce the Code of Ethics? One of the primary missions of the IBCFP is to protect the public by monitoring the business practices of CFP licensees. Planners who fail to comply with the IBCFP Code of Ethics are subject to investigation and may have the right to use the CFP or CERTlFlED FINANCIAL PLANNER marks suspended or revoked. In addition, those who are licensed to use the marks CFP and CERTIFIED FINANCIAL PLANNER must fulfill a continuing education requirement. Through continuing education, the planner keeps abreast of trends in the profession that may affect your financial future. How do I know if a financial planner is a CFP licensee? Ask to see the planner's IBCFP current license. Or, contact the IBCFP at 1660 Lincoln Street, Suite 3050, Denver, Colorado 80264, (303) 830-7543. What else should I look for when selecting a financial planner? Here are a few suggestions to consider: * The financial planner you choose should be a current CFP licensee. Because the IBCFP is committed to maintaining the integrity of the marks, their proper use by a CFP licensee assures the public that the planner has met the requirements of the profession's standards-setting body. * Recommendations and references. To find a financial planner who will best meet your needs, obtain the names of several CFP licensees and interview them. Other professional advisors you trust as well as friends and business associates who have used qualified financial planners are good sources of names. In addition, the Institute of Certified Financial Planners has a list of CFP licensees in your area. You can write or call the Institute at 7600 East Eastman, #301, Denver, CO 80231, (303) 751-7600 or (800) 282-7526. * Background. During the interview, ask the planner about his or her education, professional experience and business affiliations. In addition, ask how the individual got started in financial planning, and the occupation he or she practiced before entering the financial planning profession. * Specialty. Your planner should be knowledgeable in many areas including investments, employee benefits, retirement planning, insurance, tax and estate planning strategies and be able to work closely with other professionals including accountants and attorneys. Some planners specialize in one or more areas of financial planning or even in a certain type of clientele; if so, determine whether their area of specialty matches your situation and/or specific needs. * Compensation. You should determine how the planner expects to be compensated. Generally, compensation takes one of three forms: 1. Fees. A fee is set based on an hourly rate, fiat rate per plan or perhaps on the value of your assets and/or income. 2. Fees and commissions. Fees are charged depending on the amount of work to be done or as described above. If you choose to implement the planning recommendations through the planner, he or she may also receive commissions from products purchased or disposed of in the implementation of your plan. (Some planners may offset some portion of their planning fees if commissions are received in implementing the plan.) 3. Commission. No fee is charged for the planning process, but the planner is compensate from products purchased when the plan is implemented. It is important to note that the implementation of a financial plan may not require the purchase of financial products or investments. It may simply mean the use of appropriate financial procedures and strategies to accomplish the client's objectives. * Planning Process. It is appropriate for you to enter into an advisory contract or engagement letter with your planner before initiating the financial planning process. This is an effective way to communicate and document the nature and scope of services to be provided by the planner and what, if any, services are to be provided to you after the plan has been implemented. Examples of such services might include monitoring investments and periodic reviews to determine whether the plan is meeting your stated financial goals. In addition the planner should be willing to coordinate any specialized help you may need from an accountant, insurance agent, broker or attorney. * Rapport. Take into consideration how you and the planner get along. Several planners may be equally competent, but you should choose the one with whom you feel most comfortable. How can I learn more? The IBCFP Code of Ethics sets forth the standards of conduct you can expect from a CFP licensee. If you would like a copy of this document, write the IBCFP. Also, the IBCFP is developing a revised ethics document and technical guidelines for the benefit and guidance of planners and the public. A CERTIFIED FlNANCIAL PLANNER licensee can help you make intelligent financial decisions. |