Certified Financial Planners or Advisors must show that they have completed extensive financial planning and investment management preparation and competency testing. You may want to check out E.A. Buck Financial Services for more. The Certified Financial Planner certification is highly recommended for advisors. Other degrees and designations held by certain advisors include the following:
A Certified Public Accountant (CPA) is a professional accountant who has completed rigorous education and licencing criteria. For tax problems, a CPA is a safe option. CPAs may earn the designation of Personal Financial Specialist (PFS) after completing additional financial planning education and meeting test and experience criteria.
Certified Financial Planner (CFP)- The CFP is a well-respected financial planning qualification that includes three years of experience, adherence to a strict code of ethics, and passing three exams. These people will be able to give you a wide variety of financial advice.
Chartered Financial Consultant (ChFC)- These are usually insurance practitioners who have completed additional qualification standards in economics and investments to specialise in certain areas of financial planning.
Chartered Retirement Planning Counselor (CRPC)- The College of Financial Planning offers the CRPC certification to planners who choose to specialise in retirement planning. They must also pass an examination and adhere to a strict code of ethics. These are the most commonly used designations, but there are more than 50 others. Just note that if you see a designation that you don’t recognise, you can ask for clarification because it’s your money at stake, and you should know who trained them and who approved their qualifications.
Compensation Structures for Financial Planners
Fees, commissions, or both can be paid to financial advisors, and the difference is important to you because it can affect the cost and the service you receive.
Fee-only: This may be an hourly rate, a flat fee for a detailed plan, or a yearly retainer. Fee-only planners charge a fee for their services but don’t get paid a commission if you buy anything. The benefit is that you may receive more objective advice; however, the drawback is that the planner may lack motivation or thorough preparation to assist you in following and executing your strategy, as well as the ability to manage all aspects of its execution. As a result, you will have to pay them twice: once for basic preparation and again for other implementation assistance.
Only for commission: When you buy an insurance or financial product from a commission-only planner, such as a mutual fund, you pay him or her a commission. When dealing with commission-only planners, keep in mind that their only source of income is commissions from sales. Commission-only “planners” are rarely planners at all, and are primarily based on the goods they offer.