What You Should Know About Certified Financial Planners

Picture of Rodney D. Wade, CFP®, AIF®, EA, MST
Rodney D. Wade, CFP®, AIF®, EA, MST
certified financial advisors

Certified Financial Planners™ (CFP®) can stand out from a rather crowded field of financial professionals for a variety of reasons. One of the most important reasons is that Certified Financial Planners™ are mandated to act as a fiduciary, meaning that they are required to put their client’s interests and needs ahead of his or her own. Another reason why CFP® professionals stand out is the requirements necessary to become a CFP®, including a Bachelor’s degree and work-related experience. The exam for CFP® professionals is quite stringent and usually takes around 10 hours to complete. The CFP Board also imposes ethical standards on all licensees, and all those certified are required to complete continuing education courses in order to maintain their certification.

What is a Certified Financial Planner?

CFP® behavior is monitored by the CFP® Board, which was established as a nonprofit organization and acts in the public interest by establishing professional standards that all licensed certified financial planners™ must follow through its Code of Ethics and Professional Responsibility. The CFP Board is in charge of determining who can become a CFP®, and its board of directors maintains the right to remove the CFP® designation from any professional who violates the Code of Ethics. The Code of Ethics is updated by the CFP Board periodically, with a new Code of Standards set to take effect on October 1, 2019. The New Code and Standards include numerous changes, including the expansion of the scope of the fiduciary standard that CFP® professionals need to abide by. Currently, the CFP Board enforces the Code of Ethics, Rules of Conduct, and Practice Standards, along with the Disciplinary Rules along with enforcement of those rules. Here is a little bit more about each:

Financial Planner Code of Ethics

The CFP Board adopted the Code of Ethics for all current and future CFP® professionals. The Code of Ethics contains a series of principles and standards that CFP® professionals are expected to abide by in all of their professional activities, highlighting their responsibility to the public, clients, colleagues, and employers.

Rules of Conduct – The Rules of Conduct helps to establish the standards that are expected of all Certified Financial Planners™ and provide details on the level of professionalism that is required of all those certified. The Rules of Conduct are binding on all CFP® professionals regardless of title, position, or type of employment. Any Certified Financial Planner found violating the Rules of Conduct is subject to discipline.

Financial Planner Practice Standards

The Practice Standards include best practices for financial planning professionals that relate to the six elements that are involved in the financial planning process. Each standard includes a statement that relates to a particular element, which is followed by an explanation of that Standard and how it relates to the Code of Ethics and Rules of Conduct.

Financial Planner Disciplinary Rules & Enforcement

The Disciplinary Rules include the procedures followed by the CFP Board to enforce the Rules of Conduct. Anyone seeking certification is subject to a background check prior to becoming certified. After certification, any violation of established ethics and standards may be subject to subsequent disciplinary action including revocation of their current certification.
If you’re looking for a highly qualified financial professional that will provide ethical fiduciary responsibility towards their clients, a Certified Financial Planner may be just what you’re looking for.

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This communication contains the opinions of Wade Financial Advisory, Inc. about the securities, investments and/or economic subjects discussed as of the date set forth herein. This communication is intended for information purposes only and does not recommend or solicit the purchase or sale of specific securities or investment services. Readers should not infer or assume that any securities, sectors or markets described were or will be profitable or are appropriate to meet the objectives, situation or needs of a particular individual or family, as the implementation of any financial strategy should only be made after consultation with your attorney, tax advisor and investment advisor. All material presented is compiled from sources believed to be reliable, but accuracy or completeness cannot be guaranteed. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. INVESTMENTS BEAR RISK INCLUDING THE POSSIBLE LOSS OF INVESTED PRINCIPAL.

Wade Financial Advisory, Inc. is an investment adviser registered with the Securities and Exchange Commission. Registration of an Investment Advisor does not imply any level of skill or training. A copy of current Form ADV Part 2A is available upon request or at www.advisorinfo.sec.gov. Please contact Wade Financial Advisory, Inc. at (408) 369-7399 with any questions.

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