Have you ever wondered what difference does it make to choose a certified financial planner or a general financial planner? Keep on reading our article below to learn why.
Who is a certified financial planner?
A certified financial planner (CFP) is a professional and credentialed financial advisor that meets the strict ethical and performance standards established by CPF board in the United States and by 25 other international organizations affiliated with FPSB.
What are the criteria for becoming a certified financial planner?
Education: To become a CFP, one should possess a bachelor’s degree and get themselves enrolled in a course or program sponsored by the college of financial planning.
Examination: The next requirement for becoming a CFP is to clear a two-day comprehensive exam of CFP that involves multiple-choice questions, case studies and more.
Experience: Once passed the examination, the individual is then required to have a specified amount of experience in the industry before they attain the designation of a CFP. The set duration of the experience required to become a CFP is three years or six thousand hours spent working in the financial planning industry.
Ethics: Similar to any other certification in any other field, to be able to attain the designation of a CFP, the individual is to adhere to the strict ethical standards of financial planning. A certified financial planner is to abide by the commitment of acting in their clients’ best interests.
How can a certified financial planner help?
- Assist you in identifying your monetary goals: A certified financial planner first evaluates their clients’ risk profile with a thorough consideration of the elements of their financial picture such as their income, taxes, investments, debts and so. By doing so, they help their clients to underline their financial goals that can range from retirement savings, tax planning, investment planning or more.
- Discover and assess economic strategies: Upon careful consideration of the risk profile of their clients and evaluating the achievability of their financial goals, the certified financial planner assists their clients to find the right investment strategies that would help them attain greater benefits in the long run.
- Advise you in overall financial planning: Since these professionals are experts in their field and have a considerable amount of experience, they are fitly able to spot the most beneficial financial investment opportunities for their clients and form a workable strategy to attain the same. Further, they also undertake the re-evaluation process of the financial goals of their clients at regular intervals to ensure that their clients benefit the most from the intended financial strategy.
A certified financial planner vs a non-certified financial planner
While both the certified financial planner and a non-certified financial planner offer the same set of services, the difference between the two lies in the essence of their credentials, reliability and adherence to fiduciary. Besides, the non-certified financial planner does not go through the scrutiny of education and experience to become reliable enough to advise their clients’ about their financial decisions.
Conclusion
Hence is everything that an investor should know about the certified financial planner before hiring one to help him build a secure financial future for himself and his loved ones.
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