THE FIRST STEP
sure that any potential advisor is qualified. Nowadays, almost every- one can call themselves financial advisors. But those same people could be delivering pizzas during the evenings. To make sure advi- sors are thoroughly knowledgeable, look for designations following their names: i.e., Joe Smith, CFP™, ChFC, CLU. These designations mean that they have passed rigorous examinations.
The CFP™ mark identifies financial advisors who have met the stringent education, experience, and ethics standards set by the Cer- tified Financial Planner Board of Standards, Inc. The CFP™ Board not only owns the certification mark, it also licenses the qualified individuals to use it. Any advisor using the CFP™ mark has passed the Board’s certification and relicensing requirements. Only those licensed to use the CFP™ mark are allowed to represent themselves as Certified Financial Planners. In this country, there are more than 700,000 people who represent themselves as financial planners. However, only about four percent, or 30,000, of those individuals are Certified Financial Planners.
Among the requirements to become a CFP™ is a two-day, 10- hour certification exam that covers the financial planning process, retirement planning, tax planning, investment management, and insurance and estate planning. CFP™ candidates must also prove that they have the required work experience before being certified and then must adhere to the rigid CFP™ Board’s Code of Ethics and Professional Responsibility. Additionally, there is an ongoing contin- uing education requirement that must be met in order to continue to use the CFP™ designation. Although other professional designations exist, the CFP™ is the most difficult, prestigious, and comprehen- sive designation available.
THE ChFC AND CLU DESIGNATIONS
Two common certifications that financial advisors earn are the ChFC and CLU designations. Both the ChFC, Chartered Financial Consul-