If you are in Australia and looking to hire someone to help manage your finances, you may have come across the term Certified Financial Planner (CFP). But what exactly does it mean to be a CFP? Is it worth hiring someone with this certification? Let’s break it down so you know exactly what it is and why it’s so important.
A Certified Financial Planner (CFP) is a prestigious certification awarded globally to individuals who have completed specific qualifications and successfully passed a testing examination. In Australia, the CFP certification was initially awarded by the Financial Planning Association of Australia (FPA). However, the FPA has now merged with the Association of Financial Advisers (AFA) to form the Financial Advice Association of Australia (FAAA). The FAAA is a professional association representing financial planners in Australia. To obtain the CFP certification, an individual must have completed a relevant qualification and then apply to the FAAA for certification.
To earn this qualification, an individual must complete an undergraduate degree that satisfies the FAAA’s education requirements, which include subjects such as financial planning, investment planning, taxation planning, retirement planning, and estate planning. After completing the qualification, the candidate must then complete the FAAA’s “5-step pathway to certification.” This involves completing a significant amount of continuing education each year and passing a further examination.
Hiring a certified financial planner Australia can offer several benefits. Firstly, it ensures that the financial planner has met the select education and examination requirements of the FAAA. This means they have demonstrated their expertise in financial planning and are committed to maintaining their knowledge through continuing education. Secondly, it provides peace of mind knowing that your financial planner is held to high professional and ethical standards by the FAAA. Lastly, it can potentially save you money in the long run. A skilled and knowledgeable financial planner can help you make informed decisions about your finances, leading to better investment returns, lower taxes, and lower fees.
In addition to the CFP certification, there are several other financial planning certifications available in Australia, including the Chartered Financial Analyst (CFA) and the Certified Practising Accountant (CPA). However, the CFP certification is the most recognised and respected financial planning certification globally. It is also the only financial planning certification in Australia recognised by the Australian Securities and Investments Commission (ASIC).
To summarise, the CFP certification is a highly respected certification awarded by the Financial Advice Association of Australia to individuals who have completed a relevant qualification and passed a rigorous examination. Hiring a certified financial planner in Australia can provide peace of mind, knowing that your financial planner adheres to high professional and ethical standards. It can also potentially save you money by helping you make informed decisions about your finances. So, if you are looking for a financial planner in Australia, ensure to look for one with the CFP certification.