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What is a certified financial planner?

March 9, 2014
By WILLIAM A. VAUGHN , The Leader Herald

A certified financial planner is a financial professional who meets the requirements established by the Certified Financial Planner Board of Standards. While others may call themselves financial planners, only those who demonstrate the requisite experience, education, and ethical standards are awarded the CFP mark.

What are the

requirements?

In order to obtain the CFP an applicant must:

What does a CFP professional do?

A CFP professional is trained to develop and implement comprehensive financial plans for individuals, businesses, and organizations. He or she has the knowledge and skills to objectively assess your current financial status, identify potential problem areas, and recommend appropriate options. You're also working with someone who's demonstrated expertise in multiple areas of financial planning, including income and estate tax, investment planning, risk management, and retirement planning.

How is a CFP

compensated?

Typically, financial planners earn their living either from commissions or by charging hourly or flat rates for their services.

A CFP professional may use a combination fee-and-commission structure: you pay a fee for development of a financial plan or for other services provided by the CFP professional, who also receives a commission from selling you products. A commission is a fee paid whenever someone buys or sells a stock or other investment, or when someone buys insurance (such as health, life, or long-term care insurance) or annuities.

When calculating the cost to employ the services of a financial planner, consider fees, commissions, and related expenses, such as transaction fees and management fees related to the products he or she recommends.

How can a CFP professional help you?

A CFP professional can help you create a personal budget, control expenses, and develop and implement plans for retirement, education, and/or wealth protection. A CFP professional can offer expertise in risk management, including strategies involving life and long-term care insurance, health insurance, and liability coverage. He or she often can help with your tax planning or manage your asset portfolio based on your goals.

Specifically, a CFP professional can help you:

 
 
 

 

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