For many people, money management is confusing and overwhelming. They wonder how to save enough for retirement, for the kids to go to college, to pay off a mortgage faster, or pay less tax. For help with these and other sticky financial issues, people turn to certified financial planners. A certified financial planner (CFP) is a trained and licensed financial professional who understands the intricacies of money management and can help clients navigate the complexities of all their options. A financial adviser salary is high, usually over six figures annually, so it a lucrative field for anyone with the right aptitude and training. CFP expertise can be the difference between a comfortable retirement and working well past retirement age for clients.

Job Description

Certified financial planners work with individuals to help them manage their finances and plan for the future. Their primary task is to advise clients on how to maximize their money, but many are also licensed to sell financial products such as insurance, stocks, bonds and annuities.

CFPs typically meet with clients to discuss their short-term and long-term goals and to develop a plan to help them achieve those goals. This process usually includes looking at a variety of investment options, weighing the pros and cons of each one, and then managing the sale or purchase of investments. Some CFPs focus on a specific area, such as retirement planning, and help their clients save for retirement and manage risk. Tax advice is another common service of CFPs.

Relationship-building is a key aspect of a CFPs job. A CFP is responsible for monitoring client investments and making sure that everything stays on track toward the established goals. Many CFPs also teach classes or workshops in financial planning – usually with the goal of attracting clients – and attend conferences and other events to build their knowledge and network.

Education Requirements

Although many individuals are considered financial advisors, and they provide insights and guidance on financial matters, only those who have completed the appropriate training and passed a rigorous exam can call themselves certified financial planners. To earn the CFP designation, you must hold a bachelor’s degree or higher from an accredited college or university and complete specific coursework in financial planning, including a capstone course. If you already have a financial designation, such as certified public accountant, you probably only need to complete the capstone.

After prospective CFPs meet the education requirements, they must complete a three-day, computer-based exam. The exam includes 170 questions on a variety of topics, including financial principles, estate planning, insurance, investments, retirement planning and tax planning. The test also includes a set of questions on ethics and professional behavior and responsibilities.

If you pass the exam, you can apply for the CFP designation after you have three years of full-time professional experience, or two years in an apprenticeship, provided you meet specific, individualized requirements. You are required to undergo a full background check and have to meet an ongoing requirement to disclose information about your activities, including criminal activity (suspected and convicted), bankruptcies, investigations, employer terminations and customer complaints.

Industry

Certified financial planners work in a variety of settings, including banks, insurance agencies and investment firms. The largest number of CFPs work in investment and financial services firms including in securities and commodities, followed by self-employed planners. Most people in this field work in an office during standard business hours, although some work longer hours in the evenings and on weekends to meet with clients.

Years of Experience and Salary

On average, an entry-level certified financial planner salary is $66,932, plus bonuses, commissions and profit sharing. The total amount of additional compensation averages just over $36,000 per year, meaning that CFPs could potentially earn more than $100,000 their first years on the job. CFP salary earnings increase with years of experience; one projected trajectory looks like this:

• 0-5 years: $60,000
  
• 5-10 years: $79,000
  
• 10-20 years: $99,000
  
• 20 + years: $127,000 

Job Growth Trend

Thanks to an aging population and the decline of company pension plans in favor of individually managed retirement plans, the Bureau of Labor Statistics projects that demand for financial advisors including CFPs will increase by 15 percent by 2026. This projection equals an increase of about 40,000 jobs. Of all financial advisors, CFPs are expected to have the best job prospects and highest earnings potential.