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What is a CFP: Detailed Explanation

What is a certified financial planner and how to describe the peculiarities of this profession + the required knowledge + the duties + the certificating?

If you’ve got wonderful communicative skills and business language, the career of a specialist in the financial planning definitely suits you.

Read our article on what is a CFP.

What is a Certified Financial Planner?


More and more people invest money in the exchange market and the demand on the financial planning is increased every single day.

One may observe the huge competition between the specialists in this sphere – from the brokers to the well-paid agents who provide with the services of financial planning.

The CFP is a private individual who helps to prepare the financial plans for the private individuals.

CFPs must have excellent skills working with numbers as they require the mathematical competence to analyze the data.

Moreover, these specialists develop the recommendations and the pieces of advice to the private investors regarding this planning.

Such people must know the Internal Revenue Code and adopt it for their consultations.

They assist in the property issues as well.

To attract new clients, they use the marketing strategies and different sales gimmicks.

Besides, CFPs often attract the audience on seminars, lectures, and conferences.

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The specialists of such kind give their clients tips on how to be successful.

The difference between the CFP and the financial analyst is that the first one works with the private investors while the second one deals with the organizations.

What is a CFP and what should he know?

  1. The laws and regulations that define the demands of the financial activities of an enterprise.
  2. The financial resources and net worth.
  3. Principles of income formation and how to maintain the expenses of the enterprise.
  4. Principles of planning the prime cost and the sales proceeds (sales volume).
  5. The methods of projection the main economic indexes.
  6. The system of the commercial plans (budgets).
  7. Main principles of formation, division and using the income.
  8. The methods of how to plan one’s
  9. The basis of the economic planning and projection.
  10. Essence and goals.
  11. Types and methods.
  12. The means to calculate, the telecommunication and connection.

The description of the CFP’s work


How does a CFP work?

Firstly, he personally meets his clients and gives them some pieces of advice, helps them to set the short-term and long-term goals.

If a client wants to include in his plans such event as a wedding, a CFP is sure to take it into account.

If a client changes his work or quits it, a CFP will help him do it.

Moreover, he deals with the life insurance and offers similar services to his clients.

The private bankers are also the CFP who help the well-off people to control their finances.

They maintain the portfolio of the rich people.

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The duties of the CFP

9 duties which a CFP must do:

  1. To know the methodology of the financial planning and scheduling, build these processes regardless of the sphere of activity.
  2. To know whom to ask and ask the right questions which help to build the proper technological process of the project.
  3. To be good at the sphere in which the company works.
  4. To make the budget and project’s schedule on one’s own.
  5. To analyze the budget and the graphic defining the critical tasks and possible budget deficit.
  6. To know which adjoining processes of the company influence on the process of planning and take it into account.
  7. To notify the director of the project in time about the occurring or possible deviations from the schedule and budget.
  8. To maintain the budget and schedule up-to-date.
  9. To prepare various reports: free schedule, free money, plan-fact, current goals, business plan, etc.

How to become a CFP?


In case you wish to become such specialist, you must receive the diploma in economics, maths or business sphere.

In addition, you’ll require the Master’s diploma in the area of the business management (MBA).

Moreover, you may attend the courses of taxation management and risk management. Some educational institutions such as universities and colleges train the CFPs.

Before you begin your way as a CFP, you can try yourself as an accountant, an auditor or a lawyer.

You may get the following certificates: Certified Financial Planner (CFP), Chartered Financial Analyst (CFA), Chartered Financial Consultant (ChFC).

The private financial advisors are called CFPs in case they work in the bank, monetary or insurance institution.

They may also become the independent entrepreneurs and promote their services. Such specialists can also work from home.

The demand on CFPs is constantly growing.

Nowadays, everyone can start his education to become one of them.

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What is CFP certification?


A CFP is a professional in the financial sphere.

He has completed the special education and passed the tests. Besides, he improves his educational level regularly.

After he had successfully finished the course and passed the exams, the person receives the CFP certification.

Usually, a CFP has a high level of qualification in the wide range of economic matters.

However, during the certification, the emphasis is made on the four main disciplines.

4 subjects a person must know to pass CFP certification:

  1. Estate planning.

    The CFPs must be qualified in all kinds of financial contracts which are connected to this process.

    Among the main tasks, one can distinguish creating the trusts, filing the will, and planning the tax payments connected to them.

    A CFP can also help to develop a program which allows to divide the estate properly and to pass the inheritance or property (like a gift) to different noncommercial organizations.

  2. Tax projection.

    For people, who need help in filing and sending the tax declaration about income, the services of the CFP are simply essential.

  3. Investing.

    A CFP must have the fundamental knowledge and has practical skills working with the financial investment markets which presuppose the ability to identify the most profitable investments for his clients.

    These recommendations are usually based on the analysis of the historical data about the profits.

    Moreover, they are usually focused on the investments which have a low or medium level of risk.

  4. Insurance planning.

    This sphere of the CFP’s responsibility is tightly connected to the estate planning.

    CFP must know how to define the required type of insurance properly as well as the sum of the cover which suits the interests of the client.

    The insurance portfolio works with the investment one and is formed with the aim of improving the well-being of a client.

A certified financial planner works on account of customers and uses all possible tax subsidies.

Moreover, he maintains the proper sum of insurance cover, forms and divides the property to promote the achievement of all set goals.

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