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Financial Opinion and Insights

How To Use a CERTIFIED FINANCIAL PLANNER Professional

Jim Lorenzen, CFP®, AIF®

Jim Lorenzen, CFP®, AIF®

You’ve heard about certified financial planners – you’ve probably seen articles by them and some interviewed on television and radio!  Are these people the guru’s of all things financial?  Is a CFP® professional the only resource you’ll ever need?

Hardly.

First, a little background:  A CFP is required to meet certain experience, educational, and ethical requirements.  To fulfill the educational requirement, candidates must have a bachelor’s degree or higher from an accredited U.S. college or university and also master a list of nearly 100 topics on integrated financial planning through a CFP Board-Registered program.  The topics cover major planning areas such as:

  • General principles of finance and financial planning
  • Insurance planning
  • Employee benefits planning
  • Investment securities planning
  • State and Federal income tax planning
  • Estate, gift, and transfer tax planning
  • Asset protection planning
  • Retirement planning

The course of study can take up to three years to complete, depending on scheduling.  Today there are more than 300 colleges and universities across America offering CFP Board-Registered programs in their MBA programs.  Upon completion of the course of study, the candidate must pass a ten-hour exam, conducted over two days.  Board exams are conducted two times each year at selected locations across the U.S. on specified dates.

You’ll notice I indicated there are nearly 100 topics covering integrated financial planning.  There’s your ‘tip-off’.  CFP practitioners should be viewed as general practitioners.  Just as your family physician – probably a general practitioner – will refer you to specialists for various issues, the same should be true of your CFP.

A recent law school graduate, for example, must sit for his/her state’s Bar Exam to practice law.  During law school, subjects included contracts, torts (personal injury) crimes, real estate, taxation, evidence, constitutional law, estae law, procedure, and many other areas; but, you probably wouldn’t even want an attorney who ‘specialized’ in everything!  An estate lawyer may not be the one you want handling your personal injury case, just as you probably wouldn’t want a podiatrist performing a liver transplant.

Likewise, while CFP practitioners typically do provide comprehensive financial planning services, you should expect a good CFP to act as a ‘facilitator’ bringing together a group of legal, tax, insurance, and others who are experts in their respective fields in order to coordinate an integrated solution. 

If you find any advisor in any field telling you they can handle everything themselves, I would personally advise you run the other way.  My guess is they’re more interested in helping themselves than they are in helping you.

Jim

 

Jim Lorenzen is a Certified Financial Planner® professional and an Accredited Investment Fiduciary® in his 20th year of private practice as Founding Principal of The Independent Financial Group, a fee-only registered investment advisor with clients located in New York, Florida, and California.   IFG provides investment and fiduciary consulting to retirement plan sponsors and selected individual investors. Plan sponsors can sign-up for Retirement Plan Insights here.  IFG does not sell products, earn commissions, or accept any third-party compensation or incentives of any description.  Nothing contained in this material is intended to constitute legal, tax, securities, or investment advice, nor an opinion regarding the appropriateness of any investment to the individual reader.  The general information provided should not be acted upon without obtaining specific legal, tax, and investment advice from an appropriate licensed professional.

Member - Retirement Plan Advisory Group