Feb 17, 2014 Why Your Financial Planner Should Be A CFP®
We’ve all heard the phrase, “people are like snowflakes, all unique in their own special way.” This is true as each of us has different challenges and goals. As a result of our individuality, it’s imperative the advice we receive be personalized to our unique needs. This is especially true for the financial advice we receive. So how do we ensure that the financial guidance we get is appropriate given our individual circumstances?
One way is to make sure the person giving us financial advice is qualified and competent. This can be achieved by making sure your financial planner is a CERTIFIED FINANCIAL PLANNER TM (CFP®). The CFP® designation is a well-regarded mark in the financial industry, and represents that an individual meets certain education, experience, testing, and ethical requirements.
Education
In order to become a CFP® an individual must meet a number of educational requirements. First, they must earn a bachelor’s degree (or higher) from a regionally-accredited college or university.
Second, they must complete a college-level program of study in personal financial planning, or accepted equivalent. The program courses cover topics including estate planning, tax planning, risk management, investments, and retirement planning.
Finally, after receiving the CFP® designation, the person must stay current on any changes affecting the financial planning community. This is accomplished by attending regular continuing education classes. Every two years the individual is required to attend 30 hours of continuing educations classes covering an array of financial planning topics.
Experience
Next, the individual must practice for a certain period of time. Specifically, the CFP® Board requires each CFP® designee to have at least three years of professional experience in the field. This allows designees to gain practical, real world experience and become familiar with the many financial issues faced by individuals and families.
Testing
Every CFP® designee must pass a rigorous exam in order to be called a CERTIFIED FINANCIAL PLANNER TM. The exam is ten hours and lasts a day and a half. The exam covers a variety of topics including: estate planning, tax, retirement, insurance, and investments. Over the past few years the exam pass rate is just north of 60 percent. 1
Requiring the certification recipient to pass an exam assures the public that the financial advisor has met a level of competency appropriate for professional practice, and is able to apply a number financial principals to a variety of situations.
Ethical Commitment
Finally, every CFP® designee agrees to adhere to the high standards of ethics outlined in the CFP Board’s Standards of Professional Conduct, which include the principals of integrity, objectivity, competence, fairness, confidentiality, professionalism, and diligence when dealing with clients. In addition, they acknowledge the CFP® Board’s right to enforce said principals through its Disciplinary Rules and Procedures.
The CFP® Board also conducts an extensive background check for all designees. During which the individual will be required to disclose information about their background, including involvement in any criminal, civil, governmental, or self regulatory agency proceeding or inquiry, bankruptcy, customer complaint, filing, termination/internal reviews conducted by your employer or firm.
The education, experience, testing and ethical requirements imposed by the CFP® Board ensure a certain level of knowledge and competence. When you are seeking financial help make sure the individual offering advice is a CFP® so you know you are getting professional and appropriate counsel.
If you would like to learn more about the CFP® you can go to the CFP Board’s official website: www.cfp.net.
1 http://www.cfp.net/news-events/research-facts-figures/cfp-examination-statistics#A
The opinions expressed in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. Securities offered through LPL Financial, member FINRA/SIPC. Investment advice offered through Leonard Rickey Investment Advisors, P.L.L.C, a registered investment advisor and separate entity from LPL Financial.
Company News
Market Commentary
Retirement Planning
Tax Planning
Cyber Security
Important Disclosures
Leonard Rickey Investment Advisors, PLLC (“LRIA”), is an SEC registered investment adviser located in the State of Washington. Registration does not imply a certain level of skill or training. For information pertaining to the registration status of LRIA, please contact LRIA or refer to the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov).
This is provided for general information only and contains information that is not suitable for everyone. As such, nothing herein should be construed as the provision of specific investment advice or recommendations for any individual. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. There is no guarantee that the views and opinions expressed herein will come to pass. This newsletter contains information derived from third party sources. Although we believe these third-party sources to be reliable, we make no representations as to the accuracy or completeness of any information prepared by any unaffiliated third party incorporated herein and take no responsibility therefore.
Any projections, forecasts and estimates, including without limitation any statement using “expect” or “believe” or any variation of either term or a similar term, contained here are forward-looking statements and are based upon certain current assumptions, beliefs and expectations that LRIA considers reasonable or that the applicable third parties have identified as such. Forward-looking statements are necessarily speculative in nature, and it can be expected that some or all of the assumptions or beliefs underlying the forward-looking statements will not materialize or will vary significantly from actual results or outcomes. Some important factors that could cause actual results or outcomes to differ materially from those in any forward-looking statements include, among others, changes in interest rates and general economic conditions in the U.S. and globally, changes in the liquidity available in the market, change and volatility in the value of the U.S. dollar, market volatility and distressed credit markets, and other market, financial or legal uncertainties. Consequently, the inclusion of forward-looking statements herein should not be regarded as a representation by LRIA or any other person or entity of the outcomes or results that will be achieved by following any recommendations contained herein. While the forward-looking statements here reflect estimates, expectations and beliefs, they are not guarantees of future performance or outcomes. LRIA has no obligation to update or otherwise revise any forward-looking statements, including any revisions to reflect changes in economic conditions or other circumstances arising after the date hereof or to reflect the occurrence of events (whether anticipated or unanticipated), even if the underlying assumptions do not come to fruition. Opinions expressed herein are subject to change without notice and do not necessarily take into account the particular investment objectives, financial situations, or particular needs of all investors.
For additional information about LRIA, including fees and services, please contact us for our Form ADV disclosure brochure using our contact information herein. Please read the disclosure brochure carefully before you invest or send money.
2024 1st Quarter Investment Commentary