Believe it or not, the financial services industry has approximately 200 professional designations.
Some have high standards or indicate specific expertise. For example, if you work with a professional who’s a CERTIFIED FINANCIAL PLANNER™ or a Certified Public Accountant, you’ll learn a lot about their knowledge, expertise, and professional code of ethics.
If you choose to work with others, such as a Financial Consultant or Financial Coach, you’ll have much less certainty about what they do, how ethical they are, or how much knowledge and expertise they have.
The reason is simple: some designations are meaningless in the financial services industry and have no professional standards. For example, anyone can call themselves a financial coach or advisor with minimal credentials (such as a bachelor’s degree) and little or no financial experience.
This article will outline some of the most common professional designations and what questions to ask before working with a finance professional.
Some professionals use the term financial consultant as a generic description of what they do. However, this, along with many other titles, is not recognized by a certifying organization. Therefore, anyone can use it to look more credible than they might be.
However, “Chartered Financial Consultant (ChFC®)” and “CFP® professional” are both examples of professional designations that can only be used by advisers that have gone through rigorous training and testing. Both designations are granted by organizations with rigorous standards. That’s why they are considered the gold standard in financial planning.
To further explain what we mean, let’s dig a bit deeper. Here’s what what goes into acquiring these designations and why they should matter to you:
Functionally, a CFP® professional and a ChFC® provide similar services: both must have a certain amount of professional experience and keep their certifications current through annual continuing education classes. They also differ from every other professional designation in significant ways.
So if a CFP® professional and a ChFC® are the gold standards of financial planning, what do the other 200+ professional designations mean?
Many highlight a professional’s specific focus and are self-explanatory, such as:
But what does it mean to be Bucket Plan Certified? Or to be a Chartered Financial Engineer? And will an Accredited Estate Planner know more about estate planning than a CFP® professional or a ChFC®?
Because the requirements and standards for professional designations vary widely, other professionals may or may not be highly skilled in their listed areas of expertise. But, more importantly, there’s one compelling reason to choose a financial advisor with broad knowledge and expertise over someone with a narrow specialty.
Financial planning should include every aspect of your life that money touches, not just one piece.
Financial decisions aren’t made in a vacuum; many involve important decisions and tradeoffs.
These questions (and many more) need to be answered to round out your complete financial picture.
If you take a piecemeal approach, you’ll likely find it impossible to complete your puzzle. That’s because everything your money touches is interconnected.
Ultimately, you don’t want someone to just advise you on your investments or retirement and leave you to figure out the rest.
Instead, you want a resource who can help you make important financial decisions, ensuring those decisions align with the life you want to live.
If you’re ready to start thinking seriously about working with a financial planner, how do you choose one? You can start by asking the right questions.
Understanding a planner’s knowledge, expertise, and experience is only the beginning.
You also want to know how they charge, what services they offer, and what you should expect if you become a client.
There are 10 important questions to ask before you choose a financial planner. Here are some of the key ones:
Many planners require you to have a six- or seven-figure amount to invest.
Moreover, they’ll typically charge a percentage of those assets (e.g., 1-1.5%) as a fee.
That means if your investments increase in value, you’ll have to pay more, even if you’re not getting any additional attention or services.
Some planners will only give advice about the investments they manage on your behalf. So if you want advice on your workplace retirement plan they don’t manage, you may be out of luck.
Every financial planner at Facet Wealth is a CFP® professional, backed by additional in-house experts on everything from estate planning and equity compensation to military benefits and insurance.
All are fiduciaries, meaning they put your interests first. None earn commissions or have anything to sell beyond their guidance, support, and expertise.
Schedule a free introductory call today to learn more about how a CFP® professional from Facet Wealth can help you make the decisions that will help you live the life you want to live.
Facet Wealth, Inc. is an SEC registered investment adviser headquartered in Baltimore, Maryland. This is not an offer to sell securities or the solicitation of an offer to purchase securities. This is not investment, financial, legal or tax advice. Past performance is not a guarantee of future performance.
To schedule a free consultation with a Facet expert, fill out the form below and we will contact you within 24 hours.
Despite rate hikes, “core” inflation has hit a new peak. Here’s what you need to know.
Take these precautions to help protect your parents from scammers.
Simple safeguards to help protect yourself from identity theft.
© Facet Wealth 2022
Facet Wealth, Inc. (“Facet”) is an SEC registered investment adviser headquartered in Baltimore, Maryland. This is not an offer to sell securities or the solicitation of an offer to purchase securities. This is not investment, financial, legal, or tax advice. Past performance is not a guarantee of future performance.
Testimonials were provided by current clients of Facet Wealth, Inc. Clients were not compensated, nor are there material conflicts of interest that would affect the given testimonials. These testimonials may not be representative of the experiences of other clients, and do not provide a guarantee of future performance success or similar services.
Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, and CFP® (with plaque design) in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.
The client satisfaction survey was conducted over a four month period from January 2021 to April 2021 and was sent to all new clients after one and three months of service. The survey solicited client’s level of agreement that Facet is delivering on expectations outlined. Satisfaction is not an indication of current or future performance results nor is it a guarantee of similar experience.
Nerdwallet receives cash compensation for referring potential clients to Facet Wealth, Inc. The views of Nerdwallet are based on independent valuation of Facet’s services. Nerdwallet’s opinions are their own.