Does your financial adviser have the skills necessary to help you live your best life and leave a powerful legacy? What skills should you look for in your financial professional?
From our experience, it seems professional skills can take a back seat to an overriding consideration of “who can I trust?” There is always a friend or relative who is in the financial advisery field. Since that friend or relative feels like someone that can be trusted, they are often the first place to turn for help.
But choosing someone you know can exclude a financial professional with potentially greater demonstrated skill, experience, and designations with specific ethical requirements along with requirements for continuing education. In November of 2014, I authored a post regarding those with the Certified Financial PlannerTM designation. In that article I pointed out that only 18% of practicing financial advisers in the U.S. were also CFP® professionals.
There might be a reason that, according to a 2014 CFP Board Webinar Update, less than one-in-five financial advisers are also a CFP® professional. Possibly they have decided that this designation is not needed to improve their ability to perform work for their clients. Another explanation could be the difficulty in achieving the designation. Note that the CFP® exam consists of two 3-hour sessions, separated by a 40-minute break. During this time the candidate must answer 170 questions, including those connected with sample client case studies. Typically about 40% of the test takers do not pass.
Passing the test doesn’t assure one of receiving the CFP® professional designation. According to the CFP Board requirements, applicants for the CFP® designation must also satisfy certain educational and experience requirements (three years typically), they must adhere to Standards of Professional Conduct (including agreement to provide personal financial planning in the client’s best interest) and they must complete 30 hours of CFP Board approved continuing education each year. As the CFP Board says, this all results in “CFP® certification is recognized as the highest standard in personal financial planning.”
When it comes to your life and legacy, skills matter! Those who are Chartered Financial Analyst® (CFA) charter holders as administered by the CFA Institute also demonstrate significant skill. The three levels of required testing each require an average of 300 hours of preparation time (per candidate survey), the pass rate has averaged 42% (past 10 years) and one must have 4 years of applicable work experience. Here is a list of our team members who possess the above described credentials: