Financial Planner Training
Financial planners work for financial service employers as well as independent financial planning firms. Financial planners work with both individuals and businesses. Some employers provide in-house financial planning training programs. For financial advisers, or FINRA Series 7 and 63-licensed financial salespeople, financial planning education provides necessary practical knowledge and a valuable marketing credentials. Certified financial planners (CFPs) study a broad and deep range of topics about financial planning.
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Function
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Financial planners develop plans based upon the requirements and goals of their customers. Financial planning software--in use in brokerage firms, banks and insurance companies--assists salespeople in information collection, investment goals, portfolio securities and demographic information needed for retirement planning. Fee-based financial planners charge fees to create and customize financial plans. Some investors prefer the separation of financial planning from the sale of financial products promoted by a broker-dealer or financial institution.
The Certified Financial Planner Board of Standards
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The Certified Financial Planner Board of Standards certifies those qualified students as certified financial planners (CFPs). Certified public accountants, attorneys (including those with inactive licenses), chartered financial analysts, doctors of business administration, chartered financial consultants, Ph.Ds with economic or business specializations, and chartered life underwriters may sit for the CFP exam because their educational credentials qualify them to do so. Those desiring the CFP certification must submit to and pass a background check costing $100.
CFPs must have a bachelor's degree from a qualified institution. After taking and passing the 10-hour CFP examination, the Certified Financial Planner Board of Standards requests a qualifying transcript from each CFP. Prior to sitting for the CFP examination--given three times per year at approved sites--the written application and a $595 fee must be received by the Certified Financial Planner Board of Standards by deadline dates. Biennial certification costs $360 as of May 2010. CFPs use CFP(R) and the CFP marks on business cards.
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Benefits
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CFP students must understand many financial topics and principles. The exam covers general financial planning concepts, including the analysis of financial statements, cash flow management, financing strategies, and special situations, such as financial planning entering into and exiting from divorce. Those preparing for the CFP exam study insurance products and how and when to use these products. Thorough understanding of employee benefits, laws and features of employee benefits plans, administration and investment vehicles challenge the CFP. Knowledge of investment planning, including sophisticated analysis of investments and portfolio theory, income tax planning, retirement and estate plans, prepares the CFP to assist investors with a broad range of needs and goals.
Significance
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Financial planner training differentiates planners from more numerous securities and insurance brokers, agents and salespeople. Competition for investor trust remains intense. Many investors recognize the importance of portfolio diversification, though few understand how to construct and maintain a diversified portfolio mirroring their goals and objectives.
Considerations
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Prospective CFPs use self-study materials and formal courses to pass the CFP exam. Financial planners earn median income of approximately $60,000 per year according to PayScale.com.
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References
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