This paper provides a comprehensive overview of the financial planning profession, distinguishing between the general Financial Planner role and the Certified Financial Planner (CFP) designation. It outlines the licensing examinations required for entry-level positions, the three-step CFP certification process — including education, examination, and experience requirements — and the four primary service areas financial planners typically cover. The paper also examines the sales-oriented nature of the profession, compensation structures at various experience levels, and the positive long-term career outlook driven by growing personal wealth and complex financial needs among the general population.
The career of Financial Planner can be a very rewarding one. In 2002, Jobs Rated Almanac named financial planning the number three job in America in its annual survey.[1] This career, however, is not without its challenges, as this paper will examine.
When discussing the career of Financial Planner, it is important first to distinguish between the position of Financial Planner and the designation of Certified Financial Planner. There are currently no educational or experience requirements to become a Financial Planner. The only requirement at most firms is that the applicant pass several licensing examinations. These examinations are offered by the National Association of Security Dealers (NASD) and the state insurance boards, and most firms require three or four separate exams.
The NASD Series 7 is the Securities examination — the longest and most difficult of the required exams. Also required is the NASD Series 66, a combination of the Series 53 and Series 65, which covers State Registration and Investment Advisor topics. Most firms additionally require applicants to pass a state health and life insurance examination, reflecting Financial Planners' heavy reliance on insurance products.
A Certified Financial Planner (CFP) is not a career position but a designation obtained by a Financial Planner. It carries educational and experience requirements and is essentially a three-step process.
The first step is the educational requirement. Applicants must complete a CFP board-registered education program. More than 285 academic programs at colleges and universities across the country are available, including credit and non-credit certificate programs as well as undergraduate and graduate degree programs.
Applicants with prior training may pursue two alternative paths. The first is to "challenge" the educational requirement: certain degrees and professional credentials fulfill this requirement and allow the applicant to sit for the examination. As stated by the CFP Board, "academic degrees and credentials that fulfill the educational requirements include: Certified Public Accountant (CPA), Licensed Attorney, Chartered Financial Analyst (CFA), Doctor of Business Administration, Chartered Financial Consultant (ChFC), Ph.D. in business or economics, or Chartered Life Underwriter (CLU)."[2] The second alternative is to request a transcript review, as completion of upper-level college courses may satisfy some or all of the CFP educational requirements. Beginning in January 2007, a bachelor's degree in any field became required for all applicants.
The second step is to sit for the CFP examination. Applicants do not need to have met the experience requirement in order to take the exam, but they cannot be awarded the certification until that requirement is fulfilled. The exam is ten hours long, divided into three sessions, and covers General Principles of Financial Planning, Insurance Planning and Risk Management, Employee Benefits Planning, Investment Planning, Income Tax Planning, Retirement Planning, and Estate Planning. It is administered three times each year — typically on the third Friday and Saturday of March, July, and November — at approximately 50 domestic locations. Details regarding the exact topics covered are available at the CFP Board website.
Once the exam has been successfully completed, the third step is to acquire three years of qualifying experience. The experience can be obtained in several ways, including:
Finally, the applicant must agree to adhere to the CFP Code of Professional Conduct and submit to a background check. Any pending litigation must be disclosed.
"Investment, estate, retirement, and succession planning"
"Salary ranges, firm types, and career growth"
For the right individual, financial planning can be a rewarding profession. It requires hard work and considerable study to be successful. Being a good listener is also essential. An individual with the drive to succeed can overcome the challenges of this occupation and build a fulfilling long-term career.
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