Like most people, you have hopes, dreams, and life goals for yourself and your family. These might include buying a home or business, saving for a college education, taking a dream vacation, reducing taxes, and retiring comfortably. Financial planning is the process of wisely managing your finances so that you can achieve your dreams and goals, while at the same time helping you negotiate the financial barriers that inevitably arise in every stage of life.
Managing your personal finances is ultimately your responsibility. However, you don't have to do it alone. A CFP® professional who is a member of the Financial Planning Association® (FPA®) can help you make decisions that make the most of your financial resources.
Financial planning can help you
- Set realistic financial and personal goals
- Assess your current financial health by examining your assets, liabilities, income, insurance, taxes, investments, and estate plan
- Develop a realistic, comprehensive plan to meet your financial goals by addressing financial weaknesses and building on financial strengths
- Put your plan into action and monitor its progress
- Stay on track to meet changing goals, personal circumstances, stages of your life, markets, and tax laws
Do you need a financial planner?
How do you know if you could benefit from the services of a financial planner? You may not have the expertise, the time, or the desire to actively plan and manage certain financial aspects of your life. You may want help getting started. You may benefit from an objective, third-party perspective on what are often emotional, difficult decisions. In today's hectic world, it can be beneficial to have a CFP® professional help you stay focused and follow through with your financial plans.
Aren't all financial planners the same?
No. Be wary of people who call themselves financial planners but who appear more interested in promoting specific financial products at the expense of your real needs and goals. Look for a CFP® professional who is ethically bound to act in your best interest and can help you address a variety of financial needs, not just investments, insurance, or taxes.
Aren't financial planners regulated?
Not as financial planners. However, many financial planners are regulated by the state or federal government based on the specific products or services they sell, such as securities, insurance, or investment advice.
The Securities and Exchange Commission (SEC) and most states have requirements for people who give investment advice, including many financial planners. FPA encourages you to ask the planner you are considering how they are regulated. For instance, they could be an investment adviser representative, a broker, or an insurance agent, among others.
About CFP® professionals
FPA supports CERTIFIED FINANCIAL PLANNER® professionals because they are dedicated to using the financial planning process to serve the financial needs of individuals, families, and businesses.
To earn CFP® certification and remain certified as a CFP® professional, individuals must meet four main requirements (source: CFP® Board of Standards):
- Education covering major personal financial planning areas plus a bachelor's degree
- A comprehensive CFP® examination
- At least two years of real-life experience providing financial planning services
- Satisfaction of CFP® Board's Fitness Standards and commitment to the Code of Ethics and Standards of Conduct
Continuing education
CFP® professionals must complete 30 hours of continuing education every two years to stay current in financial planning knowledge, including ethics. They are subject to ongoing oversight of ethical standards, as well as regular reporting and review of their compliance with requirements.
Achievement of these competencies assures you that an individual who holds the CFP® certification is well prepared and qualified to give sound, professional, and ethical advice. FPA recommends using a CFP® professional who is also an FPA member.
How to start looking for a planner
FPA maintains a database of CFP® professionals in your area and allows you to search for one using a variety of criteria. Visit www.plannersearch.org to get started.
Ask friends or business associates for names of financial planners they may have used. Attorneys, accountants, insurance agents, bankers, and other financial specialists can also be good sources because planners often work with them to carry out a client's plan.