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How to Become a CFP professional? What is a Certified Financial Planner? - YouTube
Channel: See the Forest Through the Trees
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What exactly is a Certified Financial
Planner鈩笍? Financial adviser and Certified
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Financial Planner鈩笍 are definitely not the
same thing. Continue listening and I'm
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going to tell you what it takes to earn
the CFP庐 designation.
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Hey I'm Colin Exelby, Certified Financial Planner鈩笍and
in this short video I'm gonna explain
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what a CFP庐 is and why we are different
from all the others who call themselves
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financial advisors. A few months ago I
was interviewed for a story about
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choosing a financial advisor. FitSmallBusiness.com put together a list of 25
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questions to ask a potential financial
advisor. Asking if they're a CFP庐 was number
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one. and you can check out that article
in the link below. I tell people all the
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time that anyone can manage their
personal finances if they have these
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three things. You must have a reasonable
amount of knowledge or a desire to learn
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about personal finances. You must have
the time to devote to managing your
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finances. and third you have to have a
level head. Do you have the ability to
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act unemotionally and rationally about
your finances at all times? What I found
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is that many Americans don't have all
three. So, for those who decided their
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finances have become complicated enough
that they'd like to hire somebody. Where
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do you turn? it can be really confusing.
There's so many titles.
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if you don't know the
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difference don't worry it's really
confusing and as more and more people in
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the advise community call themselves
financial planners it's important to
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understand the differences between a
Certified Financial Planner鈩笍and a
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financial planner or financial advisor.
If you want to be a financial adviser
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all you have to do is get a job at an
investment firm or an insurance company
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working with the public. You don't need a
college education, you don't need any
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industry experience, and you don't need
to show
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any understanding of basic finance. That
is pretty scary. Now I started off my
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career as a financial advisor in 2000
right out of college. I had to pass the
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series 7 exam which is really a pretty
basic finance exam.
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I just finished investments and economics
exams in college, so passing the 7 was a
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breeze. I like to joke that the exam
just keeps out those who truly have no
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concept of what a stock is, what a bond
is, and how to multiply, divide, add, and
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subtract. That exam does absolutely
nothing to confirm that you know how to
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give financial advice. However to become
a Certified Financial Planner鈩笍there are
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a large number of requirements. It truly
takes financial advising to a whole
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other level and can literally take years
to fulfill the obligations to become a
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Certified Financial Planner鈩笍. True
financial planning involves cash flow
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and debt management, investments,
insurance and risk management, retirement
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and college planning, estate planning as
well as tax planning. The CFP庐 ensures
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that its designees really do
understand basically anything that's
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related to personal finances. So, why
doesn't every financial consultant
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broker and financial advisor get to call
themselves a CFP庐? Well let's look at what
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it actually takes to become a Certified
Financial Planner鈩笍. First you must have a
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bachelor's degree from an accredited
university in order to call yourself a
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CFP庐.
You can have the degree before sitting
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for the exam or you must get a degree
within five years of passing the exam.
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Second, you must complete a financial
plan development course registered with
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the CFP庐 board that covers over 100
integrated planning topics. Certain
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advanced designations like the CFA the
CPA or the CLU may allow you to bypass
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some of that coursework. You can do these
classes virtually or as part of a real
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life class. Myself, I did virtual
classwork
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over the course of two years and past
five separate exams focusing on each
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part of the financial planning process. I
then took a crash course style exam prep
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in the evenings and weekends over the
course of three months that finished up
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with a live class from 8 a.m. to 6 p.m.
over four straight days. That brings us
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to the next step you have to pass the
CFP庐 exam. It's a grueling six-hour exam
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that has multiple choice questions as
well as case studies. They give you pages
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and pages of sample client data and then
you have to determine what's going to be
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the best financial planning options for
the client. That exam is by far the
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HARDEST exam I've taken in my life. It
was so comprehensive, covering so many
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different areas of financial planning.
and the key is you have to know how to
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apply the information not just to get a
suitable solution. You have to get the
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best solution. There's often multiple
right answers but you must get the best
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solution right. So, now you passed the exam,
you get ready to call yourself a CFP庐
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right? Nope, not yet. Before you can call
yourself a CFP庐, you have to meet the
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experience requirement. You can't just be
a CFP庐, a Certified Financial Planner鈩笍
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right out of college or as a second
career right away. You must have worked
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in the financial planning industry
providing financial planning advice for
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at least 6,000 hours or you must have
been an apprentice for at least 4,000
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hours. So, you must have life experience
working with clients, analyzing data and
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then presenting it. The final part is the
ethical responsibility of a Certified
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Financial Planner鈩笍. CFP庐s follow a strict
code of Professional Conduct that
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outlines our responsibilities to the
public, our clients, and our employers.We
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are held to a higher standard than
brokers, financial advisors, financial
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consultants and any bloggers that are
giving financial advice. You've heard me
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mention suitability earlier as it
relates to the exam. Most brokers and
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advisors just have to do what's suitable
for their clients. Meaning they could
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give less than ideal advice but because
it's suitable it's completely fine.
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Certified Financial Planners鈩笍 are held to
the fiduciary standard which means we
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need to provide advice that's in our
clients best interests.
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You can go onto CFP.net and find out
anything about a potential financial
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adviser that you're getting ready to
hire that says they're a CFP庐. You can see if
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there's been anything filed against them.
So for example, have they filed
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bankruptcy,
has anyone filed a complaint against
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them. Ff the advisor isn't listed on CFP.net then they are not a CFP庐. It doesn't
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end there though. There's also a continuing
education requirement to keep improving
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your knowledge over time and you must
complete that every two years. A
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financial adviser, consultant, broker, or a
blogger doesn't have to go through all
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the scrutiny... all this education or all
the experience. In my opinion, if you're
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looking to hire a financial advisor I'd
encourage you to make hiring a CFP庐
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mandatory. If the person providing you
financial advice doesn't have a CFP庐, I
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would ask them why not? And, if you don't
like the answer you get... look somewhere
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else. Thanks for taking the time to learn
about what makes a CFP庐 different. Ff you
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have more questions, feel free to reach
out to me. And, make sure to follow me on
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YouTube and on my blog, SeetheForestThroughtheTrees.com
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