Behind the CFP® Designation

by Amyr Rocha Lima, CFP®

“Why am I doing this?”

This question crossed my mind more than a few times as I detached myself from the real world for hours (days? months?) at a time to study for the CFP® (Certified Financial Planner) exams.

I studied after work, I studied while I ate lunch, I turned down plans with my friends. It didn’t help much to know that my colleagues had trodden this lonely path before me and I knew it was important to get this certification. 

But why?

As I thought more and more about what becoming a CFP™ professional meant to me, I realised that the appropriate question wasn’t “Why am I doing this?” but rather “What does becoming a CFP™ professional mean for our clients?” .

This designation won’t automatically mean I am a better financial planner or that I will have a more successful career.

What it does mean, though, is that when you see those letters after a person’s name, that professional has fulfilled the rigorous requirements of the Financial Planning Standards Board (FPSB) which enables them to better serve clients.

So, what are those requirements? They are known as The Four E’s:

Education & Examinations

CFP™ professionals must complete a series structured coursework and exams. This includes studying investing, retirement planning, risk management and insurance, estate planning, tax planning, and so on…

Once the education requirements are met, candidates can sit for the exams. This consists not only of the aforementioned subjects, but also the financial planning process itself, along with ethical and regulatory components. And trying to memorise the textbooks doesn’t do much good; I had to know how to dissect the information that was given to me, discern what was relevant, and successfully apply it to real-life financial planning scenarios.

Experience

Candidates for the CFP™ certification must meet relevant work experience standards (a minimum of three years of practice experience) in the financial planning process, prior to being awarded their CFP™ marks.

During this time, I couldn’t simply twiddle my thumbs at work; I had to be doing actual financial planning work for clients. This includes gathering and analysing information, developing and presenting financial plans, and monitoring and supporting existing financial plans.

Ethics

Perhaps the most important requirement, candidates are obligated to uphold important ethical principles set by the CFP™ Board: integrity, objectivity, competence, fairness, confidentiality, professionalism and diligence.

A CFP™ professional is also required to act as a fiduciary at all times; this means that the professional must provide services in the client’s best interest. Failure to abide by these ethical standards can result in sanctions, including suspension or permanent revocation of the certification.

In summary…

As you can see, CFP™ professionals are not one-trick ponies. Anyone can call themselves a “financial planner” but that does not mean they are certified and have met the rigorous standards set by the FPSB and the CFP™ certification.

All CFP™ professionals are also required to complete several hours of continuing education on a regular basis, ensuring that our knowledge of topics and trends within the financial services sector stays up to date.

As a client working with a CFP™ professional, you can be confident we have a background in various areas of financial planning that enables us to provide comprehensive advice, and that we are required to act in your best interest.

The CFP™ designation means a lot to me. I value the dedication and knowledge it takes to become a CFP™ professional, and the ongoing education and practice standards that must be met in order to uphold the designation.

It also coincides with my belief that the client’s best interest is truly the firm’s best interest, and this aligns with my mission to provide comprehensive financial planning and wealth management advice.

Amyr Rocha Lima, CFP® is a partner at Holland Hahn & Wills LLP, a financial planning practice based in Kingston upon Thames. He specialises in working with successful professionals age 50+ helping them reduce taxes, invest smarter and retire on their terms.

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