4 Reasons to Hire a CFP®
At Bonfire Financial we pride ourselves on having a team of CERTIFIED FINANCIAL PLANNERs™ (CFP®) however we often get asked what is a CFP® and how are they different from other financial advisors. First, its more than just an acronym. Unlike some designations that are worth little more than the paper they’re printed on, the CFP® is one of the most esteemed financial certificates around. Each CFP® is held to an extremely high standard and requires an immense amount of work, typically nine months to two years of study.
In the US there are only 81,109 CFPs® and only 2,274 in the state of Colorado, according to the CFP® Board professional demographics. The exam itself is a grueling 7-hour test that assess the financial advisor’s ability to apply principles of financial planning, and covers all areas of insurance, investments, income taxes, retirement, estate planning, ethics and conduct, and financial plan development, among many other skills.
Beyond the test there is so much more that goes into the certification, which is why we have condensed it down to the top 4 Reasons to Hire a CFP®
Currently the SEC has NO uniform fiduciary standard that applies to all financial professionals who provide personalized investment advice, meaning there is no oversight to protect consumers and clients from paying excessive commissions or receiving substandard performance. Consumers are exposed to even greater and unnecessary risks from products that may be deemed suitable (more on that here) for them but are inferior to other available options and not necessarily in their best interests.
The CFP® Board has Code and Fiduciary Standards that requires CFP® professionals to act in the best interest of the client at all times when providing financial advice. So as a CFP® we are legally required to act in your best interest, all the time. In addition to this standard, Bonfire Financial is also a Registered Investment Advisor which furthers this obligation.
All CFP® practitioners agree to abide by a strict code of professional conduct, known as CFP® Board’s Code of Ethics and Professional Responsibility, that sets forth ethical responsibilities to the public and clients. This ensures we act with honesty, integrity, competence, diligence, and offer services objectively. It is also a pledge to protect the confidentiality of all client information, avoid or disclose and manage conflicts of interest and always act in the client’s best interests.
The CFP® Board has also established specific character and fitness standards for the CFP® certification to ensure that an individual’s prior conduct would not reflect adversely upon the profession or the CFP® certification marks. This helps you know that if you hire a CFP® you won’t find out later that they have a:
– Felony conviction for theft, embezzlement or other financially-based crimes.
– Felony conviction for tax fraud or other tax-related crimes.
– Revocation of a financial (e.g. registered securities representative, broker/dealer, insurance, investment advisor) professional license.
– Felony conviction for any degree of murder or rape.
– Felony conviction for any other violent crime within the last five years.
– Felony conviction for non-violent crimes (including perjury) within the last five years.
– Personal or business bankruptcies.
Experienced Life Long Learners:
CFP® professionals are required to complete 3 years of experience related to delivering financial planning services to clients and hold a bachelors degree prior to earning the right to be a CFP®. This real-life experience means that CFP® professionals have practical financial planning knowledge and can truly help you create a realistic financial plan that fits your individual needs.
Once certified, CFP® professionals are required to maintain technical competence and fulfill ethical obligations. Every two years, they must complete a minimum 30 hours of continuing education to stay current with developments in the financial planning profession and better serve clients.
Still not enough reasons to hire a CFP ®? We’d love to answer any other questions on what it means to have a CFP® working for you, feel free to contact us.