If you're thinking of becoming a CFP® professional, this video is for you.
We're going to talk about some of the important things you would want
to know as you decide whether or not to get the designation,
and we'll also talk about some things that are important to know as
you go through the process and as you maintain your designation over the
years to come. In this video we'll touch on what you do as
a CFP® professional, what the impact might be on your business or your
career, whether you're self employed or you're going to be an employee in
another practice, some of the things that you need to know as you
go forward throughout the years, and then I'll tell you just a bit
about my path and my reflections on having the designation. It's definitely
a commitment to pursue your CFP® marks. So it does take a lot
of time and energy. There is some cost involved, you have to pay
for those education programs, pay for the exam, that sort of thing,
and there are of course ongoing requirements, so you don't just get the
designation and then you're done, there are continuing education requirements
and the rules and the standards can potentially change over time,
so you need to keep up with those things and evolve with it
and be okay with that. So once you sort of hitch your wagon
to the CFP® designation or the CFP® certification, then you want to be
sure that that's something that you can live with over the long term
because for better or worse, things to change over time, and that exam
is not to be underestimated, it is very difficult. These days,
it is now just a one day affair, which is nice,
but it's not easy. They show the pass rates and you can look
at how many people pass over time. You can see that it's quite
difficult for a lot of people to make it through this exam successfully.
But you're probably familiar with that and familiar with some of the benefits
of getting the CFP® marks. What do you actually do as a CFP®?
It is of course financial planning, so you are helping people with all
of these different areas in their life, you are not necessarily a CFA
or a Chartered Financial Analyst who does a really deep dive on individual
stocks and their financials, although you can do that sort of thing,
nor are you an estate planning attorney, so you're not going to be
drafting documents, and there's maybe a limit to how far you want to
go on specific legal discussions, you want to not practice law unless you
are authorized to practice law in your state. But what you do is
you work with people on these really important big picture items and help
them figure out where they're going and how they're going to get there,
and then come up with ideas and put those into place and monitor
and make changes as life throws curve balls and as the laws change
and different opportunities become available. It is really an interesting
and rewarding thing to do with people, so you do, again,
gain some knowledge on these main areas of focus, but what tends to
happen is you probably pick a niche or you probably end up getting
into some sort of specialty over time, and that is where you're going
to devote a lot of attention and get into depth with people on
a particular topic, so that might be, for example, figuring out their student
loans or helping people plan for retirement, or helping people with the
cash flow and budgeting type things, whatever it is that you happen to
develop your expertise in and get a lot of experience in is something
that you can devote yourself to. People often wonder: What is the impact
going to be professionally once you successfully complete all of the different
steps? And again, those are those "four Es" of getting the certification.
Well, first of all, you learn a lot. And so with that knowledge,
it just helps you be a better financial planner, you have a big
picture view of all of these different things and how they fit together,
so you're well equipped to help people navigate the complexities of their
financial lives. Now, do you get instant clients and does the phone start
ringing, or do you start getting emails or web inquiries just because you
successfully get those letters after your name? As you probably know the
answer is no. So there are a lot of people who are very
successful, let's say sales people who just don't have the CFP®
marks, and so getting those marks doesn't necessarily mean that you will
have a lot of clients. The financial planning world is pretty much still
a relationship business, that doesn't mean you have to be a sales person,
but there are things that have to happen for somebody to come and
work with you, and getting the CFP® certification by itself probably won't
accomplish that, but it does add some credibility. It is absolutely a credibility
booster, very helpful in those discussions, and some people are specifically
looking for a Certified Financial Planner professional. If you are looking
to get a job at a financial planning firm, maybe you're just starting
out your career or transitioning into this industry, well, having that CFP®
certification can certainly be helpful. That might actually be a job requirement,
so that's going to help you get a foot in the door and
begin on your career path as you go down the road toward certification,
you want to get familiar with the ethics and the standards,
and all of the different guidelines that the CFP® Board has for you,
because it's not worth going through all of the trouble and the expense
and passing the exam if those aren't... Standards and rules that you want
to follow. Now, a lot of these are things that you would want
to do anyway, just to be a good financial planner, so being a
fiduciary, making sure that you have the knowledge to practice in the areas
you are helping people with, and making sure you know what your limitations
are, and when you can send somebody to somebody else, and just being
transparent, all of these things are probably things that you want to do
anyway, but you want to at least be aware of what all of
those rules are, so... Read carefully what the CFP® Board provides for you
and make sure that that works for you. Again, you've got that experience
requirement that takes several years to satisfy, plus all the time and energy
and money to complete this, we don't want you to be two or
three years down the road and finding out that this isn't the perfect
fit for you. Just one example of that is the definition of compensation,
this is something that's been a big deal in recent years,
so are you a fee only financial advisor? Are you feed based?
Are you using commissions, whatever it is, you have to make sure that
you explain that to clients clearly, and that can be pretty complicated,
and I've heard stories where it's kind of frustrating for people,
maybe they are married to a real estate agent who gets commissions...
This isn't, I'm not part of the CFP® Board, I can't make a
judgment on this, but what I have heard anecdotally is that that can
impact your ability to be what's called a fee only financial planner under
the CFP® Board's rules or under their definition of that term.
So again, you want to really dig into the details and make sure
you know what you're getting yourself into and kind of plan ahead for
all of these different things that may come up. So just to paint
a picture of one person's path in terms of getting the certification and
using it, I guess I became a CFP® certificate first in 2010,
so I took the exam in 2009. And before that, I was doing
the education portion for probably about four or five years, I took it
very slow, I was working as a financial advisor, but I did go
ahead and take those courses and began just doing them one at a
time, and kind of working through it slowly so that I was able
to devote my time to working with clients and working in the practice
that I was in, and that worked well for me. I don't know
that it works well for everybody else, if you are in a financial
planning program at a university, for example, that's a different way of
going about it, and that's a perfectly good way of going about it.
In fact, I can see some advantages to that for sure.
Like I mentioned before, I learned a lot through the process,
so I was already working with clients, but with each class,
with each part of the educational program, I was getting more and more
skills under my belt to help and find things and identify opportunities
or hopefully prevent some problems for clients, so it was definitely a beneficial
thing for me to go through even before taking the exam,
before actually getting the certification. You can learn a lot of these
things yourself, so you don't necessarily have... To go through a structured
program and get the CFP® Marks, but it is helpful to have a
structured educational curriculum that you follow, but again, you could
learn all of this yourself, you can do YouTube videos and read websites
and read books and articles, and go to webinars, and get a lot
of good information, but again, doing it in a structured way can often
be helpful because that makes sure that you don't miss a couple of
details here and there, so I think that the CFP® education program is
definitely beneficial. And when it comes to that exam, having some structure
helps as well, again, I had been working as an advisor for...
I don't know how many years, at least five, let's say,
before I took the exam in 2009. And what I would say is
that when you take the test, as with any test, you need to
be in test taking mode, so you might know what a good answer
is. You might know how you would handle it or how you have
handled it for lots of clients in the past, but what you need
to do when you get those test questions is to answer it in
the way that the task wants you to answer it, so that can
be tricky, and that probably explains why some people don't pass the test...
Why a good percentage of people don't pass, but again, going through that
structured program gives you a way to think of this and make sure
that you're going about it in the academic way first, and then you
can go at it in a practice oriented way as you develop your
skills. So. I hope that is helpful, and I wish you the best
as you proceed toward your CFP® Certification, it's... Again, a rewarding
thing to do. And you will thank yourself. Afterward.
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