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The 4-Step Process to Becoming a Certified Financial Planner

Certified Financial Planner
The Certified Financial Planner certification has become the standard of excellence in financial planning, and getting your CFP® certification will help you stand out as an expert and attract more clients to your business. However, there are some requirements and steps you need to take to achieve this prestigious credential. Here’s the four-step process to becoming a Certified Financial Planner.

1) What does it mean to be Certified Financial Planner?

The Certified Financial Planner Board of Standards Inc. (CFP Board) is an independent, not-for-profit organization created in 1983 by representatives of 13 financial planning organizations and individuals concerned about protecting the public interest. To become certified, candidates must complete several hundred hours of training and experience and pass an exam. There are three different levels: Personal Financial Specialist (PFS), Certified Financial Planner® (CFP®), and Chartered Financial Consultant® (ChFC®).
What's required for each class?
To become a PFS, you need to take 60 hours of education plus 12 months of full-time or 30 months of part-time experience working with clients. If you already have two years of experience under your belt, all you need to do is pass an exam. To become a CFP®, you need to complete 72 education hours and 18 months of work experience—or 24 months if it’s related to finances. And ChFC®? You’ll learn everything from Estate Planning and Retirement Income Strategies to Wealth Management and Investment Planning—and again, if your experience qualifies, take an exam.

2) Why get certified?

Achieving CFP® certification is difficult. Candidates must pass three separate, rigorous exams that test their knowledge of personal finance and tax planning, investments, insurance, retirement planning, and estate planning. The average candidate spends 400 hours preparing for these exams. As one can imagine, failure rates are high; most candidates don’t even make it past Step 1. Given how demanding CFP® is to earn, having CFP® on your business card is worth its weight in gold. It says you have mastered complex financial concepts, met professional ethics standards, and passed stringent testing—all while maintaining your integrity. It also attracts clients who seek out Certified Financial Planners® when they need help with critical financial decisions.

Finally, being certified gives you an edge over other advisers who aren’t CFP® certified but are still operating in your area. If you want to stay competitive in today’s marketplace, getting that CFP® behind your name should be at the top of your list.

3) How do I become certified?

Becoming certified requires the following four steps:
The cost for all four steps combined can be upwards of $10K or more depending on where you get your education and how long it takes to complete each step. Many professionals find they’re taking courses right up until they go for their certification. If those numbers seem steep, keep in mind that those who have achieved certification have been recognized as having met a higher standard than those who haven’t—and passing through all four steps has required thousands of hours worth of effort. Getting certified is serious business; there aren’t any shortcuts, no matter what anyone tells you.

4) Where can I get more certification information?

The best way to learn more about certification is to reach out directly. The CFP Board has information about financial planning certification that can help you decide if it’s right for you, and there are many free resources available online, including webinars and an online FAQ page that covers everything from application requirements to exam content.

You can also connect with a local chapter of The Financial Planning Association, where you can meet with other professionals in your area and ask questions. Because each of these organizations is committed to professional development through education, pursuing a career in financial planning may lead you towards additional certifications or licenses throughout your career, including courses from reputable universities or continuing education opportunities from professional associations.

For those just starting, there are entry-level credentials such as Certified Personal Finance Specialist® (CPFS®) and Registered Financial Consultant® (RFC®). Both offer a strong base of knowledge in personal finance principles that will prepare you well for further training and growing as a financial advisor or planner.

About Me

Don Larson, CFP® is the owner and founder of Larson Wealth Management. Don started in the investment advisory industry in 1999 after he graduated from Arizona State University with a Bachelor of Science degree in Business Finance.

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