4 Financial Planning Credentials for Qualifying a Financial Planner

by Miranda Marquit · 9 comments

In some cases, a financial planner or financial adviser can be quite helpful as you work toward your money goals. While it is possible to manage your own money, some people find that a fresh set of eyes can be helpful in creating financial plans. Plus, it can help to have the advice of someone who has been educated to make certain financial decisions. If you do decide that a financial professional can help you, it is important to know that he or she is qualified. Here are four credentials to look for when you are vetting your financial planner:

Certified Financial Planner – CFP

Getting the right “official” credentials can be time intensive, and that is true for Certified Financial Planners. A CFP must have proper college training. This might be via an approved college course, or it might be through having a specific degree or professional designation. On top of this education, a CFP must have at least three years of financial planning experience and have passed a 10-hour exam. You can find out more at CFP.net.

NAPFA-Registered Financial Advisor

If you are looking for a fee-only financial adviser to help you with financial decisions, you can look to NAPFA (NAPFA.org). The registered Financial Advisor designation can only be held by fee-only planners that meet strict professional and educational requirements. NAPFA won’t let just anyone in, so it can be to your advantage to see if your financial planner meets the standards.

Chartered Financial Consultant – ChFC

The American College offers the Chartered Financial Consultant designation to those who have completed rather rigorous requirements. The ChFC requires that a financial planner complete at least eight college course in various aspects of financial planning. Additionally, every two years a financial consultant who wishes to maintain the status must complete 30 hours of continuing education. This is a designation especially sought after by insurance professionals. You can find out more at ChFCHigheststandard.com.

Personal Financial Specialist – PFS

You can look for a certified public accountant to help you with your planning. Someone with a personal financial specialist designation is a CPA who has gone through specific training aimed at providing help on personal finance matters. The designation often looks like this: CPA/PFS. This can be a great help if you plan to have your financial planner help you with your taxes as well.

Double Check Credentials

Most of the sites that certify financial planners have a search feature that you can use to verify that your financial adviser of choice does, in fact, have the credentials he or she is claiming. This is very important, since you want to make sure that you are working with someone who is properly qualified. You can also check with your state’s board of accountancy or a similar agency to find out whether your CPA is properly credentialed.

A good financial planner can help you make better financial decisions. However, before you put your financial fate in someone else’s hands (or at least get substantial direction that will guide you as you make your own financial fate), you should do some homework and make sure you are dealing with someone who is qualified.

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  • Shammy Peterson says:

    It caught my attention when you said that a CPA has gone through specific training, so they can handle personal finance matters. My husband and I want to get the help of a professional who can help us with investment and retirement planning. We want to grow our wealth and protect our future at the same time since we don’t want to depend on anybody once we retire. We will do all your tips to find the best financial consultant.

  • Alex at CIF says:

    Mary’s comment earlier about anyone being able to call themselves a “financial advisor” reminds me of a news story I read a while back. I don’t remember the specifics anymore, but the guy had some fake title on his business card – something like “Certified Financial Expert” yet he didn’t have any training in finance whatsoever.

  • financial advisors says:

    Qualifications are quite important. Not only do they convey the advisor’s committement to his/her professions, but also many good designations require certain amounts of education/experience before the person is even allowed to take them.

  • The Prudent Planner says:

    Some firms charge an arm and a leg for their planning services. I recently came across a trust company that charged $7,500 a year for continued services and quarterly updates. When I saw this I was wondering “Do they need to plan to have a plan?” A lot of the quality financial planning firms will charge by the hour and provide an extensive report for you in the end with guidlines and steps to follow.

  • Jacob says:

    Nice post i think this is a IT year and mostly people used to work promote their business via web-site by marketing their business. I think this is best source for marketing point of view.

  • Marie@familymoneyvalues says:

    The National Association of Personal Financial Advisors even has a class to talk about some of those designations: http://www.napfa.org/consumer/UpcomingSessions.asp
    Deciphering Financial Acronyms

    The world of personal finance advice is still pretty much like the wild west – most anyone can call themselves a ‘financial advisor’, but as you say above, there are some designations that require the holder to undergo rigorous and continuing education and testing.

    That said, my own experience is that the certified advisors are very, very cautious (read that ‘afraid of lawsuits’) so I always carefully consider their advice in light of my own circumstances.

  • Jenna says:

    What about recommendations and referrals? Any good sites for those?

    • MoneyNing says:

      napfa.org actually has a great tool to help you find a fee based only advisor. You can find it at findanadvisor.napfa.org.

  • Bargaineering says:

    Double checking is crucial and I’m glad you included it, so many people just take a person’s credentials at face value without confirming it.

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