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SCREENING PLANNERS: When interviewing financial planners, ask them about their credentials and accreditations.

How to find a qualified financial planner

Financial planning credentials are important, but they are not created equal. A family resource management specialist explains what certifications to look for.

When you look for a financial planner, you’ll see a lot unfamiliar acronyms, also known as designations or credentials, following their names.

"Anyone can call themselves a financial counselor, coach, adviser or planner, but a credential often demonstrates a higher level of education, specialty or commitment,” says Lorna Saboe-Wounded Head, South Dakota State University Extension family resource management field specialist.

In many cases, the credentialing process is like going to school for a specialized program. "That said, all credentials are not created equal.”

A reputable certification program requires rigorous education and examination, field experience, an ongoing commitment to continuing education and abiding by a code of ethics. Some programs raise this standard by demonstrating compliance with an accrediting body.

The Association for Financial Counseling and Planning Education (AFCPE) is one of the most respected organizations offering certifications.

The following are some of the most common credentials and what they mean:

AFC, accredited financial counselor. An AFC has expertise across the client's entire financial life-cycle, and is able to counsel clients at any point in their lives. An AFC can help individuals and families successfully navigate a financial crisis, overcome debt, modify ineffective money management behaviors, build an effective spending plan and provide a strong financial education foundation to meet both short-term needs and long-term goals. 

CFA, chartered financial analyst. A CFA provides advanced investment analysis and portfolio management. Their studies include the mastery of investment tools and analytical methods in a variety of applications for effective portfolio management and wealth planning.

CFP, certified financial planner. This certification indicates that someone has in-depth theoretical and practical knowledge of personal financial planning, tax planning, employee benefits and retirement planning, estate planning, investment management, and insurance and risk management. The CFP certification requires field experience and successful completion of a comprehensive exam and is regulated by an oversight body, the CFP Board.

ChFC, chartered financial consultant. A ChFC covers the fundamentals of financial planning like a CFP, but a ChFC is an advanced planning designation that also covers real-world, practical planning applications for special circumstances, including in-depth coverage of planning for business owners, families and those with special needs.

CPA, certified public accountant. A CPA is an accounting professional who has passed the Uniform CPA examination, administered by the American Institute of Certified Public Accountants, and also has met additional state certification and experience requirements. CPAs can work in any area of finance, including tax preparation, consulting, and of course, general accounting.

FFC, financial fitness coach. A FFC has a strong financial knowledge base, coupled with the coaching skills and techniques that allow his or her client to be an active participant in creating solutions and a personalized financial plan. This certification may stand alone or be acquired as an enhanced skillset to a financial counseling or planning certification.

RICP, retirement income certified professional. A RICP offers focused expertise in retirement income planning, including structuring effective retirement income plans, mitigating risk to the plan and creating a sustainable stream of income to last throughout your retirement years.

If you come across an unfamiliar designation, you can search its meaning and requirements through the look-up tool offered by the Financial Industry Regulatory Authority.

"When working with financial representatives, don't be afraid to ask questions about their credentials, including who issued them, what training and continuing education was required and how to verify their standing through an accrediting organization. A trustworthy financial professional will be glad to share more about his or her credentials," says Saboe-Wounded Head.

For more information, contact Saboe-Wounded Head at [email protected].

Source: SDSU

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