How to Become a Financial Planner in a Hurry

About 66% of millennials don’t feel like they’re on track for retirement. It’s not much better for people in their 40s-60s, either.

Only a small percentage of people have over a million set aside for retirement. Most people have less than $100,000 set aside.

With such dire statistics, it shows that people need financial education and they need help making their money work for them.

You can become a financial planner and give them the help that they desperately need. The good news is that people know that they need help. The industry is expected to see higher than average demand over the next several years.

You want to take advantage of this boom, but it takes time to become a Certified Financial Planner. Read on to learn the process to be a CFP and jump into your new career quickly.

Financial Planner vs. Financial Advisor

Before we jump right into the work of becoming a financial planner, let’s go over the differences between a financial advisor and a financial planner.

The terms are used interchangeably, but there are some big differences that you need to be aware of. For starters, a financial advisor is someone that manages a portfolio of investments. They oversee mutual funds, stocks, and other investments.

The primary job of a financial advisor is to help you reach your financial goals. They will advise you on how much clients need to set aside each month for their investments. They’ll also tell clients how well the investments are doing.

They can give you a basic overview of other issues like life insurance policies, but that isn’t their primary focus. They just tend to stick with what they know really well – investments.

A financial planner goes well beyond managing your investments. They take a 30,000-foot view of your financial picture and help you manage each piece to help you reach your goals.

They’ll look at your insurance policies, estate plan, tax situation, debt, and budget. They take that information and develop a comprehensive plan for you to eliminate your debt, maximize your tax deductions, and plan your investments. Financial planners are supercharged financial advisors.

Another major difference is in how they recommend products. A financial planner has to maintain your best interest at all times. They’re held to that standard.

Financial advisors aren’t held to that high standard and can recommend products that will help you reach your goals. They will also keep their commissions in the back of their minds when making those recommendations.

Certification Paths

There are differences in how they’re licensed and regulated.

A financial advisor does have to get a Series 6 or Series 7 licenses to sell certain types of investments. There are also Series 63 and Series 65 licenses. They can go on to get an additional certification, such as a Chartered Financial Analyst (CFA).

A Certified Financial Planner is the gold standard of the financial industry. It’s overseen by the CFP board. CFP certification is in addition to the required Series 6 and Series 7 licenses.

How to Become a Financial Planner

There’s no doubt that a Certified Financial Planner designation sets you apart from financial advisors. What do you need to do to earn that coveted designation?

The Certified Financial Planner requirements start with education. You have to have a bachelor’s degree from an accredited institution. It can be for any subject, but it’s recommended that you major in something finance-related.

In addition, you need to complete a course on financial planning through a board-approved program.

There is an experience requirement, which can be met before or after you sit for the CFP exam. You have to have 4,000 hours as an apprentice or 6,000 hours as a professional.

There is a tough exam that you have to pass. This is a 170 question exam that covers everything from risk management to tax planning. The best way to prepare for the exam is to take a CFP course that gets you ready for the exam.

At the end of the process, you must undergo a background check and sign the ethics pledge. At that point, you are a CFP.

Is it possible to become a Certified Financial Planner if you’re changing careers? It is if you already have a 4-year degree. The path is that you would complete the CFP coursework, take the CFP exam, and gain the necessary experience.

The process usually takes about 2 years. It’s a faster process for financial professionals that already have the experience.

How Are Certified Financial Planners Paid?

Once you have your CFP designation, it’s time to use it to get clients. You’ll find that it may be easier to get clients, but how you get paid may change.

As a financial advisor, you are paid on commissions only. There are CFPs that choose to operate as fee-only, where they charge clients between $150 – $300 an hour.

A fee-only structure ensures that the Certified Financial Planner uses sound judgment when recommending investment products. They’re not influenced by commissions.

Some Certified Financial Planners use a combination of the two, but they still have to comply with all ethics and standards.

Start Your Career as a Certified Financial Planner

Do you want to be a financial advisor that can make a huge difference for your clients? You need to become a CFP. It will set you apart from all of the other financial advisors out there.

It’s a long road to become a financial planner, but you can speed up the process. You have to take the right courses that prepare you for the exam.

Visit the Career section of this site for more ideas to grow your career.