What is the Difference between a Financial Planner and a Certified Financial Planner?

There isn’t much of a difference between a financial planner and a certified financial planner. More often than not, many find it impossible, or near impossible, to decipher or spot the differences between these two categories of professionals.

One major distinguishing factor between the two groups is the certification received by the certified financial planner.

Before we get further into the topic, let us discuss what and who a financial planner is. Financial planners are those who provide financial advice and planning for clients. It is within their job responsibilities to see to it that clients are able to get the best guidance regarding how they can draw up, follow up, and execute plans geared towards their financial success.

Let us consider the two groups of financial planners and certified financial planners separately to spot the differences between the two of them.

Financial Planner

A financial planner that is not certified has a slight difference from the certified financial planner. Though the difference is slight, it is a very material difference. A financial planner is a person with the requisite skills to offer the necessary financial planning advice to clients and to assist clients accordingly. They are often referred to as “personal financial planners.” They are there, ready at your side, and available at your beck and call to offer you financial planning advice and help you out on demand. It is important to note that the fact that they are not certified does not in any way undermine their skills and capabilities. They are still capable of providing you and other clients with the best financial planning advice and expertise when sought.  They are still fully qualified as financial planners with the necessary information, knowledge, and skills at their fingertips. The only difference, as mentioned previously, is they are not certified by a standardized body.

Certified Financial Planner

Let us consider an individual who is a certified financial planner and what sets them apart from the pack.

A certified financial planner, as opposed to the group we recently discussed, is officially certified by the Certified Financial Planner Board of Standards. Since this group of financial planners is certified by the regulatory body, you will usually see a registered trademark as part of their written designation.

The requirements for certification for a financial planner are often referred to as the “Four Es”. These four Es are Education, Examination, Ethics, and Experience. Let’s discuss what each of them mean for certified financial planners:

  1. Education: before one can be certified as a financial planner by the regulatory board, they must have completed the requisite academic requirements. The minimum academic qualification for admission and certification is a bachelor’s degree, regardless of the field of study.
  1. Examination: there is usually an examination for individuals seeking to become a certified financial planner. It is only upon the successful completion of the examination, in no longer than 5 years, that one becomes eligible for admission into the group of certified financial planners.
  1. Ethics: as is the same with all professional bodies, the group for certified financial planners has its own ethical code and set of rules and regulations by which they abide by. It is these ethical specifications and guidelines that moderate, control, and guide the certified financial planners in all of their dealings and activities.
  1. Experience: it is often said that “experience is the best teacher.” All financial planners, prior to admission and certification, must show that they each possess the requisite experience that is essential to their field of practice. They must be able to exhibit a track record that shows off their possession of sufficient experience in financial planning over the years.

Bottom Line

The difference between financial planners and certified financial planners is still a very thin line. As was previously mentioned, apart from the obvious difference of certification, it is the effect and consequences of the slight difference that sets the two groups far apart from each other. The best advice I have for you when selecting one of these individuals is to find the person you enjoy working with and whom you trust. You should also make sure that the information they provide you works alongside your own goals and aspirations – if not, it might be time to find a new planner.

If you would like to learn more about financial planning or having a decent financial plan I would check out the book The Total Money Makeover by Dave Ramsey.

If you would like to purchase this book above or any other book and use this link and Shop Amazon – Save Up to 20% on Books.


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