What is a Certified Financial Planner (CFP)?February 21st, 2011 by Dan Woodruff
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This article examines what is a Certified Financial Planner. A Certified Financial Planner is a professional financial planner who has attained one of the highest levels of qualification in the financial services industry. This is a technical qualification which focuses on the skills needed to prepare a comprehensive financial plan, and assesses these skills against a case study.
A Certified Financial Planner will look at all aspects of your finances, and prepare a plan for you to help you realise your lifestyle ambitions and your goals. This is not about selling you financial products, but instead focuses on your life and goals, and how to implement a strategy to achieve them.
The skills used are appropriate to anyone and any financial situation. Certified Financial Planners follow a code of ethics set by their national professional body designed to ensure that they maintain the highest professional standards.
These standards ensure that you should always see the following 6 steps of financial planning:
- Defining the client/financial planner relationship
Your adviser will clearly define what services will be delivered, and what their responsibilities will be, as well as your own;
- Establish your goals
This is probably the most important aspect of the process for your future since the certified financial planner will aim to help you achieve your goals. This can only be done after you have established your goals;
- Clarify your current financial status
Your planner will define where you are now financially, and identify any problem areas in your current situation;
- Develop a financial plan
Your planner will work with you to create a plan so that you can clearly see which steps are needed to achieve or maintain your goals;
- Implement your financial plan
Once you know what needs to be done, your financial planner will help you to put in motion action to plug gaps in your financial situation, and then work towards achieving your longer term goals;
Your personal life will not remain static, so you will need to repeat the financial planning process at regular intervals, to take account of changes in your plans and situation.