Why Should I Work With A Certified Financial Planner™ (CFP®)?
Understanding the role and expertise of a Certified Financial Planner™ (CFP®) is important, and may help you in selecting the financial advisor you want to work with. In this post, we’ll explore what a CFP® is, the comprehensive services they offer, and why working with a CFP® can be a game-changer in achieving your financial goals.
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What Exactly Is A CFP®?
The title “Certified Financial Planner™” (CFP®) is a designation given to professionals who meet stringent criteria in the field of personal finance planning. Those who are awarded the CFP® title can operate in several capacities including financial planning, financial advising, and investment management. This comprehensive skill set enables a CFP® to deliver tailored financial guidance, ensuring that clients’ financial strategies are well-aligned with their overall life ambitions.
CFP®s Help You Put Together A Comprehensive Financial Plan
Creating a comprehensive financial plan tailored to your unique needs and goals is a crucial step in securing your financial future. Whether you’re an individual employee or a business owner, a Certified Financial Planner™ (CFP®) can guide you through various areas of financial planning:
Retirement Planning: This involves evaluating your long-term retirement objectives, including the lifestyle you aspire to maintain, calculating necessary retirement income, designing an investment portfolio aligned with risk tolerance and time horizon, and advising on appropriate retirement accounts and contribution strategies.
Investment Management: Focuses on creating a diversified investment portfolio tailored to your risk tolerance and financial objectives, including regular reviews and adjustments in asset allocation and continuous monitoring of investment performance to stay aligned with your goals.
Insurance Planning: Involves identifying potential financial risks and uncertainties, recommending suitable insurance policies (like life, health, disability, long-term care) to mitigate these risks, and regularly reviewing coverage to ensure it remains adequate.
Tax Planning: Entails developing strategies to minimize tax liabilities, advising on tax-efficient investments and tax-advantaged accounts, and providing year-round guidance on the tax implications of financial decisions.
Education Planning: Includes estimating future education costs, recommending and managing appropriate savings vehicles such as 529 plans or education savings accounts, and tailoring investment strategies to meet education funding goals within the desired timeframe.
Estate Planning: Involves advising on strategies for efficient wealth transfer to heirs or charities, assisting in the preparation of essential legal documents like wills and trusts, and considering tax implications to minimize the tax burden on beneficiaries.
CFP®s Are Highly Educated and Experienced
The path to becoming a Certified Financial Planner™ (CFP®) is a difficult one. It involves thorough education and a comprehensive examination, ensuring that CFP® professionals are highly knowledgeable and competent in their field. All CFP® professionals must hold a bachelor’s degree at a minimum, and must complete a specific financial planning coursework offered through a CFP® Board Registered Program.
The academic journey culminates with the CFP® Certification Examination, a challenging and comprehensive test that assesses a candidate’s mastery over various financial planning domains. This includes the financial planning process, tax planning, employee benefits and retirement planning, estate planning, investment management, and insurance.
Please Note: Once certified, CFP® professionals are required to engage in ongoing education, they are required to complete 30 hours of continuing education every two years. This commitment to lifelong learning ensures they remain at the forefront of the financial planning field, constantly updating their knowledge and skills to reflect the latest developments and best practices.
CFP®s Are Highly Experienced
Gaining the CFP® designation is not just about academic achievement; it also requires substantial professional experience. Candidates must accrue either 6,000 hours of professional financial planning experience or 4,000 hours of specialized apprenticeship experience.
This hands-on experience is crucial, as it allows emerging financial planners to apply their theoretical knowledge in practical, real-world scenarios, honing their skills in helping clients navigate their financial journeys.
CFP®s Are Bound By The Highest Industry Ethics
Becoming a Certified Financial Planner™ (CFP®) requires a full commitment to the highest ethical standards. Every CFP® candidate pledges to prioritize the best interests of their clients, embodying a fiduciary duty that forms the heart of their professional integrity. This commitment is more than just a promise; it’s reinforced by a thorough background check conducted by the Certified Financial Planner Board of Standards™.
Many CFP®s Are Fee-Only
In the financial advisory world, understanding the distinction between “fee-only” and “fee-based” advisors is important. This difference significantly influences the advisor’s recommendations and their approach to your financial planning.
What Sets “Fee-Only” Advisors Apart?
Direct Compensation: Fee-only advisors earn their income exclusively through fees paid by clients. This model ensures transparency in how they are compensated.
No Commissions: They do not receive commissions or kickbacks from product sales, such as mutual funds or insurance policies.
Transparent Fee Structures: These advisors might charge a percentage of assets under management, hourly rates, or fixed fees for specific services, aligning compensation with client needs.
Reducing Conflicts of Interest
Fewer Conflicts for Fee-Only Advisors: With income solely from client fees, fee-only advisors generally face fewer conflicts of interest. Their advice is seen as unbiased, without the pressure to sell certain products.
Potential Conflicts with Fee-Based Advisors: Conversely, fee-based advisors earn through both client fees and commissions on products they sell. This dual income can lead to conflicts, as their recommendations might be influenced by commission incentives.
Choosing a “fee-only” CFP® offers clarity in compensation, reduces potential conflicts of interest, and aligns the advisor’s focus closer to an individual’s financial goals.
Get Help From A CFP® Professional Today
Ted Fischer has completed the rigorous education necessary to become a CFP® and is able to provide you with top-notch service regarding all areas of your financial planning.
Our fee-only compensation model minimizes potential conflicts of interest, ensuring that the advice and strategies provided to you are unbiased and solely in your best interest.
If you’re ready to work with a financial team that puts your needs first with full integrity, don’t hesitate to reach out! You can call us directly at our Westlake office at (805) 418-7686, or our San Clemente office at (949) 433-7768. Schedule your complimentary consultation today.
This commentary reflects the personal opinions, viewpoints and analyses of the Fischer Investment Strategies, LLC employees providing such comments, and should not be regarded as a description of advisory services provided by Fischer Investment Strategies, LLC or performance returns of any Fischer Investment Strategies, LLC client. The views reflected in the commentary are subject to change at any time without notice. Nothing in this commentary constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Fischer Investment Strategies, LLC manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.
Ted Fischer is a Fee-Only Certified Financial Planner® & fiduciary, and the founder of Fischer Investment Strategies.
Drawing from more than 25 years of experience in the financial services industry, Ted's expertise includes retirement planning, investment analysis, tax planning, estate planning, and insurance.
Ted has an extensive academic background. He received his Certified Financial Planning (CFP®) designation from UCLA in 2011. He became a Qualified Plan Financial Consultant (QPFC®) and an Accredited Investment Fiduciary (AIF®). Ted has a Bachelor of Science in Marketing, with a minor in Finance, from San Diego State University.
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