The Standard of Excellence
In the financial planning industry attaining the CERTIFIED FINANCIAL PLANNER™ marks is considered the standard of excellence. For an advisor to become a CFP® practitioner one must meet extensive educational, experience, and ethical requirements and must sit and pass the CFP Board exam. As a CFP® professional when offering comprehensive financial planning a more holistic personalized approach may be implemented rather than just focusing on one aspect of a person’s financial picture, such as investment management or estate planning. If comprehensive financial planning is not necessary specific services may be selected by tailoring the scope of engagement to fit one’s personal needs. There are currently 89,613 CERTIFIED FINANCIAL PLANNERS™ in total and 2,670 in the state of Colorado (1).
CERTIFIED FINANCIAL PLANNER™ professionals are held to a stringent Code of Ethics when practicing financial planning. This code of ethics is enforced and monitored by the CFP® Board and all CFP® practitioners must commit to upholding these standards throughout their careers. This set of regulations is outlined by the CFP® Board’s Code of Ethics And Standard of Conducts. Knowing these practitioners must abide by and are held to this code may help give clients confidence that they are pairing with an advisor whose principals and training are of the highest quality. Such principles expected to be upheld by practicing CFP® professionals when providing financial advice include:
CFP® certificants must exercise due care when providing financial advice and are also required to avoid or disclose conflicts of interest to clients or potential clients. Of course, the CFP® Board expects certificants to comply with the law and act in a manner that reflects positively on the financial planning profession.
Along with the Code of Ethics, CFP® Practitioners are held to a set Standard of Conduct. The first, and arguably the most important, is the fiduciary standard. The fiduciary standard is the most stringent in the financial planning industry and states when financial advice is provided the planner must act in the best interest of their client. Hence, placing the clients’ interests over those of the planner and, or their firm. The fiduciary duty also requires:
- a duty of loyalty
- a duty of care, and
- a duty to follow client instructions.
In Short, the fiduciary duty obligates that CFP® practitioners act with care, skill, prudence, and diligence when considering the goals of each client. This may also be referred to as the “prudent person standard of care” a standard that requires a person acting as a fiduciary to exercise care, skill, and judgment that is required to protect the interest of others.
After obtaining the CERTIFIED FINANCIAL PLANNER™ certification, an individual is required to keep current with the everchanging financial industry through continuing education requirements. The CFP® Board has set a 30-hour requirement that must be met each reporting period, two of these hours must be dedicated towards ethics while the remaining 28 must cover principal knowledge topics of financial planning. These continuing education requirements ensure that CFP® practitioners are current with changing regulations and continue to be competent. Continuing education certainly provides additional schooling and is a positive action set by the CFP® Board that requires advisors to continually learn and refresh their knowledge in the financial planning industry.
The Normandy Group holds itself and its representatives to the highest standard in providing advice and service to our clients. Attaining the CERTIFIED FINANCIAL PLANNER™ marks is not a requirement in the financial planning industry but is a way to further your knowledge and expertise in the field. We are happy to say that we have 3 full time CFP certificants at the Normandy Group. This furthers and strengthens our core values and binds us to the Code of Ethics And Standard of Conducts set by the CFP® Board. If you would like to further explore the Certification you can do so at www.CFP.net, or feel free to reach out to our team and we would be happy to answer any questions you have.
- CFP® professional Demographics. CFP Board. (n.d.). https://www.cfp.net/knowledge/reports-and-statistics/professional-demographics.