How to Become Fee-Only Financial Planner

A fee-only financial planner avoids conflicts of interest.

Most financial planners get at least some of their compensation from commissions. A fee-only financial planner offers investment advice to clients for a fee. Because a fee-only financial planner does not receive commissions or other sales incentives, she is more likely to make recommendations in the best interests of her clients. Proper education and certification are foundational to a successful career in financial planning.

Instructions

1. Earn a bachelor's degree. Although not every financial planner has a four-year degree, most financial planning firms strongly prefer that job applicants have one. A bachelor's degree, or higher, from an accredited college or university is necessary to become a Certified Financial Planner (CFP). Taking courses or earning a degree in a business-related field such as accounting or economics is especially helpful.

2. Secure an internship at a fee-only financial planning firm. You can identify appropriate firms in your area through the websites of industry organizations like the National Association of Personal Financial Advisors (NAPFA) and the Financial Planning Association. If internships are especially scarce, you can offer to be an unpaid intern at a fee-only firm in exchange for work experience.

3. Begin working toward your CFP designation by fulfilling the education requirement. You can complete one of the more than 300 CFP board-approved programs offered at universities across the country. Certain degrees and professional designations also fulfill the CFP education requirement. These degrees are listed on the CFP website. You can also request a transcript review to determine whether your upper-division level classes fulfill some or all of the education requirement.

4. Pass the CFP certification exam. This 10-hour exam is usually administered in March, July and November. The application deadline is about seven weeks before the exam. You must pay the $595 exam fee when you apply.

5. Complete the CFP certification experience requirement. You must have a minimum of three years of full-time work experience in financial planning.

6. Pass the CFP Board's Candidate Fitness Standards. The CFP board outlines unacceptable professional and ethical conduct that may prevent you from becoming certified. As part of this process, you must undergo a background check.

7. Pay a one-time certification application fee and your regular certification fee. You will then receive your CFP certification.

8. Find a job as a fee-only Certified Financial Planner. You can search job listings on the NAPFA website or work independently. Joining NAPFA or the Garrett Planning Network, an organization of independent fee-only planners, will help you build a network of other fee-only financial planners.

Tips & Warnings

• When looking for an internship at a fee-only financial planning firm in your area, try to find a list that ranks firms by assets under management. Start your search with the largest firms. (from reference 3)

References

• Money Central: 8 things your financial planner won't tell you
• Bureau of Labor Statistics: Personal Financial Advisors
• Young Money: Becoming a Financial Planner
• CFP Board of Standards: Steps to Initial CFP Certification
• Garrett Planning Network: Who We Are

Resources

• National Association of Personal Financial Advisors
• Garrett Planning Network