Financial Planner

What is a Financial Planner?

A Financial Planner – also referred to as a Personal or Certified Financial Planner – is a qualified financial or investments advisor. They provide their clients with professional advice regarding investments, insurance, tax, wealth management, and retirement planning. A financial planner provides individuals with advice concerning the management of their finances, and work for a firm or independently.

Typically, financial planners deal with retirement planning, savings for various purposes – such as education, vehicle, or mortgage financing – controlling expenses, budgeting, loans and borrowings, and investments.

The Roles and Duties of a Financial Planner

A financial planner’s primary role is to assist clients with creating personal budgets; establishing objectives for saving; minimizing, controlling, and/or managing expenses; and implementing the necessary steps for creating and accumulating wealth. Financial planners work with investment managers, mutual funds, and/or financial advisers to meet their respective clients’ investment needs.

A financial planner’s occupation requires that they remain up-to-date with current tax legislation and financial product developments and the necessary personal financial management strategies on retirement and estate planning. Hence, they should also have good sales skills. They will need to obtain new clients (when necessary) and be innovative in crafting solutions to improve their clients’ financial situation and ensure that goals are met.

The duties of a financial planner typically include providing investments and insurance services to clients, ensuring sound client record-keeping, establishing and maintaining relationships with clients by remaining up-to-date with the clients’ successes, and regularly communicating relevant changes that may impact the financial position of the clients.

They also serve as a middleman for clients and other financial professionals, who offer guidance on legal, estate management, and personal tax planning.

The Personal Financial Planning Process

Referencing ISO 22222:2005, the financial planning process consists of six (6) steps. These steps include:

1. Creation and definition of the client and financial planner relationship
2. Collection of client data and records and needs assessment (determining the client’s needs, goals, and expectations)
3. Evaluation and analysis of the client’s current financial position
4. Development and presentation of the financial plan to the client
5. Implementation of the financial plan and recommendations
6. Monitoring and tracking the financial plan and how it is performing, and maintaining the client and financial planner relationship

Legal and Educational Requirements to Become a Financial Planner

The legal requirements to work as a financial planner vary by state and/or country. Many countries lack a legal framework for the “financial planner” designation or titles; hence, the occupation’s scope may vary between jurisdictions.

Ideally, a financial planner should possess a bachelor’s degree (as a minimum requirement) in terms of educational requirements. Coursework in the field of finance, economics, or accounting would be an added advantage. A Master’s of Business Administration (MBA) can also be a requirement; however, it would be at the discretion of the individual and potential firms hiring financial planners. Some states and countries require that a financial planner be certified by the Certified Financial Planner Board of Standards Inc. (CFP Board).

The CFP (Certified Financial Planner) designation increases the financial planner’s credibility and marketability. Below are the CFP designation’s requirements to be met by potential candidates in order to become certified:

• Education: A degree and the registration and completion of the CFP Board’s financial plan development (capstone) course
• Registering for and passing the CFP examination
• Experience: The CFP Board requires that candidates obtain “6,000 hours of experience through the standard pathway or 4,000 hours of experience through the apprenticeship pathway.”)
• Ethics: Certified Financial Planners should adhere to the standards of ethics and practices outlined in the CFP Board’s Standards of Professional Conduct.

More Resources

CFI is the official provider of the Commercial Banking & Credit Analyst (CBCA)™ certification program, designed to transform anyone into a world-class financial analyst.

To keep learning and developing your knowledge of financial analysis, we highly recommend the additional resources below:

• Estate Planning
• Financial Analyst vs. Financial Advisor
• Personal Finance
• Private Wealth Management
• See all career resources