Monday, 2 October 2023

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What is a certified financial planner (CFP)?

What is a certified financial planner (CFP)?

If you’re looking for professional financial advice, a certified financial planner (CFP) could be just what you need.

The CFP designation is awarded to professionals who have completed rigorous education, experience, and ethical requirements in financial planning. And if you’re worried about where to find one, you can rest easy. There are more than 95,000 CFP professionals in the U.S.—all trained in 72 areas of expertise waiting to help you reach your financial goals. 

What is a CFP?

A certified financial planner (CFP) has passed a series of strict requirements and maintains ongoing ethical and education duties to give you comprehensive financial advice.

CFPs have a fiduciary duty to provide advice in their client’s best interest, even if it is not in the advisor’s financial interest. They have education and experience across a wide range of financial topics, from retirement planning and investments to taxes, insurance, and estate planning.

“With a CFP, you have somebody that’s been through a rigorous program and has the experience to look at your overall financial health and help you make smart decisions about your money,” says Marc Giradot, MBA, CFP, founder and CEO of Vertical Ascent Wealth Management in Seattle, WA.

What does a certified financial planner do?

A certified financial planner’s job is to help you maximize the financial opportunities available to you so you can reach your goals. And building your financial plan isn’t a willy-nilly process. Certified financial planners use a comprehensive seven-step process to construct your ideal plan.

The first set of steps involves data gathering. Through conversations, questionnaires, and financial documents, your CFP gets to know your personal and financial details and helps you define the goals you want to work towards.

From there, your CFP analyzes your current financial course and considers alternative strategies to serve your goals better. That analysis turns into a set of recommendations tailored to your unique circumstances.

Finally, you and your CFP work together to implement those recommendations. Because people and circumstances are constantly evolving, this final step also involves regular monitoring of your finances and updating recommendations as needed to ensure you’re always on the right track.

Not every relationship with a CFP will include all of these steps. For example, you might work with a CFP to create your plan and then…

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