Expert Q&A

George Sleeman: Alphabet soup after their name? Put forth the effort? Lets patronize the credentials shall we? It is a three day examination, George. What does it take to become a certified tax preparer? People who down play other’s do so because they can’t attain their status or education.

A person with a CFP or with a CPA earned those designation through education, past and continued, various requirements to maintain their licenses and experience. I would trust no one else to handle my finanaces, accounting or TAXES.

Although both George and Lee both offer different takes on the qualification level of the CFP, it is important to understand that there is more than simple qualification that differeentiate these terms. A financial planner is simply anyone who provides any financial planning service. There are quite a few professions that offer this service ad hoc (such as brokers, attornies, accountants) but most financial planners are registered and affiliated with a Registered Investment Advisor and the state they practice in. They are also required to provide an ADV Part 2 to each client.

Financial planners who wish to distinguish themselves from others pursue different financial designations that require different levels of education, test taking, ethical conduct, and continuing education. The Certified Financial Planner (CFP) designation is widely regarded as the premiere financial planning designation. That is not to say that financial planners who do not hold the designation are poor or that every CFP if the best; it simply means that every Certified Financial Planner has volunteered to undergo the most rigorous academic, testing, ethical, and continuing education standard in the industry.

Another difference, perhaps much more important, is that every Certified Financial Planner is held to a fiduciary standard. This means they are legally required to act in their client’s best interest. Unless from another designation, a typical financial planner is not held to this standard.

A CFP is a certified financial planner. They have taken courses and passed a written exam to earn the alphabet soup after their name. Does certified mean good? Not always, however at least they have put forth the effort to get the education.