Fiduciary, Fee Only and CFP® Ethics
FIDUCIARY and FEE ONLY
As a CFP® professional, I have taken an oath to put my clients’ best interests ahead of my own in all of our planning together. This means that NPFP minimizes conflicts of interest to the greatest extent possible. One significant way NPFP does this is by charging fees only for financial planning and investment management services. These fees are fully disclosed to you prior to our planning together. NPFP does not sell investment products and we do not receive any commissions from other relationships that affect your next steps. For example, if we recommend that you obtain life insurance, we do not get compensated from the life insurance broker or agent by recommending their specific product to you.
We believe our relationship is built around knowing what your unique needs are, educating you as much as possible around those needs, and then recommending actions, products, and investments that help you live as securely and confidently as possible.
What it means to be a CERTIFIED FINANCIAL PLANNER™ Professional
CFP (Certified Financial Planner)®: The CERTIFIED FINANCIAL PLANNER™, CFP® and federally registered CFP (with flame design) marks (collectively, the “CFP® marks”) are professional certification marks granted in the United States by Certified Financial Planner Board of Standards, Inc. (“CFP Board”).
The CFP® certification is a voluntary certification; no federal or state law or regulation requires financial planners to hold CFP® certification. It is recognized in the United States and a number of other countries for its (1) high standard of professional education; (2) stringent code of conduct and standards of practice; and (3) ethical requirements that govern professional engagements with clients. Currently, only about 75,000 individuals have obtained CFP® certification in the United States.
To attain the right to use the CFP® marks, an individual must
satisfactorily fulfill the following requirements:
Education – Complete an advanced college-level course of study addressing the financial planning subject areas that CFP Board’s studies have determined as necessary for the competent and professional delivery of financial planning services, and attain a Bachelor’s Degree from a regionally accredited United States college or university (or its equivalent from a foreign university). CFP Board’s financial planning subject areas include insurance planning and risk management, employee benefits planning, investment planning, income tax planning, retirement planning, and estate planning;
Examination – Pass the comprehensive CFP® Certification Examination. The examination includes case studies and client scenarios designed to test one’s ability to correctly diagnose financial planning issues and apply one’s knowledge of financial planning to real world circumstances;
Experience – Complete at least three years of full-time financial planning-related experience (or the equivalent, measured as 2,000 hours per year); and
Ethics – Agree to be bound by CFP Board’s Standards of Professional Conduct, a set of documents outlining the ethical and practice standards for CFP® professionals.
Individuals who become certified must complete the following ongoing education and ethics requirements in order to maintain the right to continue to use the CFP® marks:
Continuing Education – Complete 30 hours of continuing education hours every two years, including two hours on the Code of Ethics and other parts of the Standards of Professional Conduct, to maintain competence and keep up with developments in the financial planning field; and
Ethics – Renew an agreement to be bound by the Standards of Professional Conduct. The Standards prominently require that CFP® professionals provide financial planning services at a fiduciary standard of care. This means CFP® professionals must provide financial planning services in the best interests of their clients.
CFP® professionals who fail to comply with the above standards and requirements may be subject to CFP Board’s enforcement process, which could result in suspension or permanent revocation of their CFP® certification.