Financial Insights

Choosing and Evaluating Financial Professionals

Although you may personally handle many of your financial affairs, sometimes you may need the services of a financial professional. Financial professionals include financial planners, attorneys, securities brokers, and other specialists. Selecting the right financial professional means evaluating the services they can offer and their credentials, and finding someone whom you can rely on to give you good advice and/or service when you don’t have the time or expertise to completely handle your financial affairs.

Explaining Financial Planning Credentials

When choosing a financial planner, you should be aware that some financial professionals who use this title are not truly qualified to give comprehensive financial planning advice. In general, a financial planner will have one or more of the following credentials:

CERTIFIED FINANCIAL PLANNER professional (CFP®)–This is the most rigorous and prestigious credential. CFP® professionals must have a minimum of three years of related experience and have completed a course of study registered with and approved by the Certified Financial Planner Board of Standards, Inc. (CFP Board). They must also pass a two-day 10-hour exam that covers all aspects of financial planning. In addition, they must adhere to a professional code of ethics and fulfill 30 hours of continuing education every two years. Many also belong to the Financial Planning Association, a professional organization. If a planner says that he or she is a CFP® licensee, ask to see the planner’s CFP Board license or call (888) CFP-MARK to check.

Chartered Financial Consultant® (ChFC®) and Chartered Life Underwriter® (CLU®)–Some financial planners are members of the Society of Financial Service Professionals, a professional association for life insurance agents. To receive either designation, planners must have at least three years of experience and complete a course of study through the American College in Bryn Mawr, Pennsylvania. Certification is rigorous and prestigious, and planners earning these designations must adhere to certain ethical standards.

Accredited Personal Financial Specialist (PFS)–The PFS designation is granted to CPAs who are members of the American Institute of Certified Public Accountants, and who earn a minimum of 80 hours of personal financial planning education, successfully pass a PFP-related exam, and have at least two years of full-time business or teaching experience.

Registered Financial Consultant (RFC®)–This designation is awarded by the International Association of Registered Financial Consultants (IARFC) to advisors who have a college or graduate degree in financial services, or who have earned an IARFC-approved designation or professional degree. The RFC® also must have a minimum of four years experience as a full-time practitioner or educator in the field of financial planning or financial services. He or she must also meet licensing requirements, and they must complete continuing education courses, and adhere to a code of ethics.

The following information is reprinted with permission from Forefield, Inc. Copyright 2006-2012.

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