In 1985, the Certified Financial Planner Board of Standards (CFP Board) was set up in order to authorize, oversee, and enforce standards for industry experts in the financial planning sector. Before that, anyone with a business card could assume the title of Financial Planner without being qualified or being officially authorized. Since the time of its creation, the CFP Board has provided regulation and oversight to the world of financial planning by establishing a precise criteria of prerequisites, standards, and testing.
The CFP Board’s main objectives are to make sure that the strictest possible financial planning credentialing is provided, to develop educational standards pertaining to testing and improving the knowledge of Certified Financial Planners in Chicago, to rigorously enforce and regulate the behavior and professional conduct of CFPs, and to expand public access to skilled and ethical financial planning.
Recognized as the standard of excellence in personal financial planning, individuals seeking certification by the CFP Board are required to fulfill prerequisites in education and professional experience, pass a long and difficult exam covering many different financial management topics, and agree to abide by specific ethical guidelines. Applicants are required to have a minimum of 6,000 hours of finance planning experience and have earned a bachelors degree (or higher) in a related discipline. To further safeguard the ethics, an extensive personal, ethical, and criminal history background check is done on everyone who applies .
Along with the aforementioned criteria, a Certified Financial Planner must fulfill and uphold certain qualifications called the Standards of Professional Conduct. Thus, a CFP is required to follow a stringent Code of Ethics and Professional Responsibility, conform to specific rules of conduct, meet candidate fitness standards, and comply with all Financial Planner Practice Standards. If any of these standards are violated, suspension and permanent revocation of certification will be enforced by the CFP Board. Details about the disciplinary record of every Certified Financial Planner is available on the internet for the public.
After meeting the necessary prerequisites, qualified candidates must pass an extremely rigorous examination before acquiring their CFP license. Covering in excess of 100 original aspects of integrated financial planning, the comprehensive ten-hour test for certification means the applicants must have an extremely thorough understanding of the material covered, and be prepared for extensive study. The CFP exam incorporates material from across the overall spectrum of financial planning, from high level investment strategies to retirement planning, estate tax to insurance planning, and several other relevant topics.
In an effort to keep certification, all Certified Financial Planners must renew their license every two years and fulfill biannual requirements of continuing education. Before issuing a license renewal, the CFP Board reevaluates Certified Financial Planners to ensure compliance with the Standards of Professional Conduct. To learn more about Certified Financial Planners, go here.