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Certified Financial Planner
Certified financial planners (CFPs) receive their title from the International Board of Standards and Practices for Certified Financial Planners. They must take extensive exams and continue to enroll in education classes. Every CFP must pass the CFP Board’s comprehensive certification examination. The exam tests the individual’s understanding on various key financial planning topics. In addition the individual must have prior planning-related experience of about three to five years before using the CFP marks.
CFPs must also voluntarily comply with the CFP Board’s Code of Ethics and additional requirements. Should any CFP violate the code of ethics the Board retains the power to discipline or permanently revoke the license all together.
For the ongoing education classes, CFPs must take 30 hours of continuing education every two years. Classes must pertain to financial planning areas such as investment management, retirement planning, employee benefits, insurance, and so forth.
After the initial completion of the certification requirements, CFPs receive what’s called certification marks from the CFP Board as a reward and proof that they are truly certified.
When it comes to choosing a financial planner, make sure you know what that financial planner can offer. Services that financial planners provide vary widely. Some get paid hourly or may charge a fixed rate and does not sell you the products. This type of planners give you advise but you have to go elsewhere to make your own investments. Others give all-inclusive services and are charged by commission. They may advise you on financial strategies all the way from savings, retirement funds, investment options, insurance, taxes, estate planning, and more. This type of financial planners would try to sell you their products because that’s how they make money.
So before you hire a CFP, it is always good to ask about their backgrounds, rate and fees, so that you know that you’re getting your money worth right from the start.
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