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Guest Column: Top 5 Reasons to Choose a CFP® Professional

Tyler Nace

Tyler Nace, CFP® is a financial advisor for Southwestern Investment Group in Dallas, TX.

Searching for a financial advisor or financial planner in Nashville should represent a fun financial achievement. After all, you are the one who has worked long and hard and made disciplined decisions to be in a position to hire a professional to help you organize your financial life.

As you have likely already realized, there is an overwhelming amount of choices. On top of that, there are high stakes for a multitude of firms fighting for your business. All you need is someone you can trust, someone who genuinely cares about you and your family, and someone you are confident can lead you towards the financial goals you have set for your future self.

You may be familiar with the term CFP®, or CERTIFIED FINANCIAL PLANNER™. However, there is a good chance these terms are lost for you in the letter soup of designations and acronyms the financial services industry has created to confuse, mislead, and lend credibility. There is one certification that you can trust as meaningful and significant.

Here are the top 5 reasons to choose a CFP® Professional

In an industry where some attempt to confuse and alter the truth to sell products, you want someone you trust with a CFP® certification because:

They know their stuff

Licensing in the financial services industry is entirely too easy. For someone off the street, it only takes one to two months to study for a Series 7 securities license. The test requires a sore of 72% to pass, and you can retake the test as many times as you’d like to get a positive result. The test is largely based on factual information and has very few questions that relate to the application of advice. Why this matters? Knowing the rules doesn’t help a trusted advisor as much as how the rules apply in different scenarios for the best potential result. When you consider that a Series 7 licensed advisor could now help manage your life’s savings, you should expect more.

Anyone with the CFP® certification can help give you confidence, as a consumer, with a certain degree of professionalism. First, there are seven college level courses that must be successfully completed to even sit for the CFP® Board Examination.

  • General Principles
  • Insurance Planning
  • Investment Planning
  • Income Tax Planning
  • Retirement Planning
  • Estate Planning
  • Comprehensive Capstone

After completing these courses, the real work begins. Studying to pass the comprehensive national exam often requires over 100 to 120 hours. The thing that makes the CFP Exam so challenging is the types of questions they ask. These are not definitional or memorization questions, but scenario based application and synthesis questions. Consider that Dr. Isabelle Gonthier, the director of examinations knows almost nothing about financial planning.Standard Deviation Her role is to craft a difficult, application based, and fair examination. There aren’t any free points for spelling your name correctly. But if you can calculate the risk metric standard deviation using this formula, you are well on your way.

They must take your interests ahead of their own

Part of being a financial planner is adhering to high standards of ethics. Beyond a background check, all CFP® certificants agree to adhere to the rules of conduct and professionalism. The key tenant of the rules of conduct is the fiduciary standard.

“A CFP® professional shall at all times place the interest of the client ahead of his or her own.”

Rule 1.4

You would be surprised, but the vast majority of advisers are not held to this standard. The financial services industry often suffers from a bad reputation for this reason. There are many more salespeople paid to sell products than there are true consultants who have your best interest at heart.

There is a good amount of press on this very issue due to the Department of Labor issuing the Fiduciary Rule. There has been a challenge to the new rule from the Trump administration and there is a good chance the rule will be changed from its current form. In either case, it will be up to you to choose an advisor who has your best interests first and foremost.

They are committed and experienced

An advisor has to go through a time intensive and often arduous process to complete the CFP® certification. Not only this, but it often costs upwards of $5,000 to complete the coursework. These barriers weed out most, leaving only those who are willing to commit a large amount of time and money to obtaining the marks. Especially since there is nothing in the industry that requires the certification. It simply is a certification to hold yourself out as one of the top professionals in the financial planning industry.

In addition to the significant commitment, there is an experience requirement to hold out as a CFP® certificant. Three years of industry experience is generally the minimum requirement to hold the marks. So in both fashions, you are assured of a level of commitment and experience. When trusting your life’s savings and your future financial success to a professional, the assurance of what the certification represents is paramount.

Sure, you likely have a nephew or close friend who is getting started in the financial services industry, but that doesn’t mean they have the tools, dedication, and experience to walk beside you on your financial journey.

They can help save you more than they cost

First off, no guarantee here.  As with hiring any professional, you generally get what you pay for. A board-certified attorney can give you an edge in a courtroom, contract negotiation, or dispute. The extra cost to hire the right attorney often winds up with a better outcome than if you had hired the least expensive attorney you found on Craigslist.

Nor do I mean to imply that any designation or certification will always lead to better investment returns. No advisor or wealth manager can ever make promises around investment returns. The good news is a well thought out plan and a disciplined approach to investment management can help lead to you hitting your financial goals.

The value of a CFP® professional comes by understanding investing fundamentals, but also by looking at your overall situation to recognize opportunities and blind spots. After all, helping you avoid financial mistakes like being underinsured in key areas, e.g., life, disability, long-term care, homeowners and auto, can wind up saving you from tremendous losses.

In addition, they will often help review your income tax return and estate planning documents to help you evaluate your income tax situation or your potential estate tax liability. By knowing the current laws and how to avoid mistakes, the cost of hiring a good financial planner can often be offset by their valuable advice.

Oftentimes, helping you avoid mistakes is just as valuable as investment gains.

They help hold you accountable to the plan

How do you ever know where you are going without a set goal and a plan to get there. It is critical that your finances are organized around a long term plan. There are too many individuals and companies whose only mission is to separate you from your diligent savings. A plan gives you a direction to follow, and more importantly, narrows your focus to the path of financial future. That is what Dave Ramsey has done with his Baby Steps. He gives a direction and focus to the masses. A trusted advisor will help craft a plan that is unique to you and your vision of financial success.

Additionally, a long term working relationship and even friendship with a CFP® professional will help keep you on track. Life is unexpected. There will always be challenges and hardships. In those times, having a trusted advisor can help you navigate through turbulent waters. Sometimes market volatility is to blame for your distress, but more often life’s hardships are what can truly wreck the best laid plans. Trust and confidence don’t develop overnight. This is exactly what is necessary when you are faced with adversity. A trusted CFP® professional has the tools to help guide you and your family to the other side.

Summary

You are good at what you do. If you are reading this, it is likely you are great at what you do, and are probably well compensated for it. I would also surmise that you have a significant amount saved up and have a responsibility to be a mindful steward. The more you have, the more responsibility it represents. Find someone who is at the top of their game in coaching people towards their most important goals.

Nashville is a great town to make a living, raise a family, and enjoy the process with those things and people that you cherish. The job of a CFP® professional is to understand your priorities, craft a plan that integrates all parts of your life, and walk with you in your journey towards your financial future.

There are many choices when looking for financial advisors in Tennessee. There is no other client-facing certification in the financial services industry that matches entirely. Making the decision to hire a CERTIFIED FINANCIAL PLANNER™ professional is an easy one.

Opinions expressed are those of Tyler Nace and are not necessarily those of Raymond James. Raymond James Financial Services, Inc. and its advisors do not provide advice on tax or legal issues; these matters should be discussed with a tax or legal professional. Raymond James is not affiliated with Dave Ramsey. There is no assurance that working with a CERTIFIED FINANCIAL PLANNER™ professional will provide a favorable outcome.
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Tyler Nace
tyler.nace@raymondjames.com

Tyler believes those he serves deserve a consummate professional, and that is who he strives to be. He majored in business and finance at The University of North Carolina at Chapel Hill. He obtained the CERTIFIED FINANCIAL PLANNER™ certification. He also taught the CFP® curriculum as an adjunct professor through the University of Dallas. Tyler has always connected with Dave Ramsey’s words to “have a heart of a teacher”. He loves sharing his passion for financial planning in simple and memorable ways. He is energized to help others achieve their goals and help them discover new doors. Tyler is blessed that his hard work feels light. Visit http://nacewealthteam.com/ to learn more about Tyler and his financial planning team.



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