Becoming a Certified Financial Planner

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Diver4242
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Becoming a Certified Financial Planner

Post by Diver4242 » Tue May 15, 2018 8:42 pm

I'm about to turn 60 and just got forcibly retired (aka laid off) from my IT job. I was burned out on it anyway. What I really enjoy is finance and financial planning. I've always read voraciously on the topic and have done well for myself. I like advising others and doing well for them (friends, family) informally.

I've been wondering what to do with my time after my last day next month, and this idea really has me excited. I understand that I can become a CFP by getting a certificate (I already have two bachelor's degrees) from a CFP-approved source and taking the exam. I'd also like to join NAPFA as I just want to work for an hourly rate to help people.

Has anyone taken this route and offer any advice? I'd particularly like to know what courses are good, likely distance/online learning. I'm sure there are a lot of bad ones out there. My soon to be former company will pay up to $2,500 for job retraining and this is what I'd like to use it for.

Thanks in advance for any help (and if this is the wrong area, administrators please move the thread to the appropriate place).

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Alexa9
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Re: Becoming a Certified Financial Planner

Post by Alexa9 » Tue May 15, 2018 8:54 pm

Most people on here will frown at it because they are DIY and there are a lot of sleazy advisors out there that take advantage of people. I would take an online course (doesn't matter which one) to be eligible to take the exam and cram for the exam (the review course is more important to pass the exam). Then you need to work for 3 years for someone else to get your CFP. Ideally you would work for a CFP that has values similar to yours. It is really a sales job so you have to be able to attract clients. Be aware if you work for a big firm they will make you try to get everyone you know to invest with them and if you leave that firm you can't take your clients.
To be honest at your age, I don't think it's a good career change. You would be better off teaching baby boomers computer skills or something related to your field.

ShowMeTheER
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Re: Becoming a Certified Financial Planner

Post by ShowMeTheER » Tue May 15, 2018 9:06 pm

My experience in doing this is 10 years old now, but prior poster mentioned the work requirement which is an annoying hurdle to the CFP. Some people find a way around but I had no luck (I knew that going in though).

I really enjoyed the learning and course work though. Just looked up and saw that Jeff is still running the Fast Track course. Jrfinancialgroup.com for more info

If a location works for you I recommend this. Six or seven 4-day weekends per topic (6-8 hour days usually). Got to meet some great people as well. I thought it a nice way to learn and it forces you to stay on track to be sure you would be prepared.

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unclescrooge
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Re: Becoming a Certified Financial Planner

Post by unclescrooge » Wed May 16, 2018 12:56 am

Alexa9 wrote:
Tue May 15, 2018 8:54 pm
Most people on here will frown at it because they are DIY and there are a lot of sleazy advisors out there that take advantage of people. I would take an online course (doesn't matter which one) to be eligible to take the exam and cram for the exam (the review course is more important to pass the exam). Then you need to work for 3 years for someone else to get your CFP. Ideally you would work for a CFP that has values similar to yours. It is really a sales job so you have to be able to attract clients. Be aware if you work for a big firm they will make you try to get everyone you know to invest with them and if you leave that firm you can't take your clients.
To be honest at your age, I don't think it's a good career change. You would be better off teaching baby boomers computer skills or something related to your field.
I forget where I read this, but a financial company was actively recruiting 55 year olds a few years ago. They were looking for people who wanted to make the career switch, and at this age probably had a strong network of friends to sell to.

Most advisors are 59, so I think OP will blend in.

OP, remember this is first and foremost a sales job. Is this something you are good at?

confusedinvestor
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Re: Becoming a Certified Financial Planner

Post by confusedinvestor » Wed May 16, 2018 1:25 am

I am in IT and I want to do "financial planning" as my side hustle, i plan to take the finra series 65 exam and register myself as a RIA.

CFP is much better vs Series xx exams/registrations but if you are BH, you may not need CFP/Series 65 etc but just some designation (eg CFhC ?) to attract clients...as CFP is basically a sales job...but you can really made difference to ppl lives by putting them to 3 Fund...

You may want to join XYPlanning network and play around with prof planning software such as RightCapital, MoneyGuidePro, eMoney ....

Diver4242 wrote:
Tue May 15, 2018 8:42 pm
I'm about to turn 60 and just got forcibly retired (aka laid off) from my IT job. I was burned out on it anyway. What I really enjoy is finance and financial planning. I've always read voraciously on the topic and have done well for myself. I like advising others and doing well for them (friends, family) informally.

Thanks in advance for any help (and if this is the wrong area, administrators please move the thread to the appropriate place).

Diver4242
Posts: 17
Joined: Wed Jan 03, 2018 4:17 pm

Re: Becoming a Certified Financial Planner

Post by Diver4242 » Wed May 16, 2018 4:38 am

ShowMeTheER wrote:
Tue May 15, 2018 9:06 pm
My experience in doing this is 10 years old now, but prior poster mentioned the work requirement which is an annoying hurdle to the CFP. Some people find a way around but I had no luck (I knew that going in though).
ShowMeTheER, did you do the CFP course/exam and then just skip the 3-year requirement and just help people with financial planning at an hourly rate?

I'm definitely not going to work for some firm and do a sales job on them or have to focus on acquiring clients. I just want to help folks who don't understand this stuff to get themselves out of a hole and actually to steer CLEAR of the con jobs and bad advice.

I guess I'll have to look at the RIA (but I don't want to only focus on investments, really financial planning overall) and other routes, or maybe do the CFP course/exam and just be straight with prospective clients that I'm not CFP certified and why. So please keep the advice coming! Thanks so much.

bondsr4me
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Re: Becoming a Certified Financial Planner

Post by bondsr4me » Wed May 16, 2018 5:34 am

OP, if you want to obtain the CFP go for it.

I would not pay any attention to the negativity posters.
You can do a lot of good helping others who do not have a clue about financial planning for their taxes, investments, insurance, estate.

Contrary to what was previously posted, doing CFP work is NOT a sales job; it is financial planning for your clients.
I would suggest you NOT accept commissions or do fee-only based on assets.
I believe charging an hourly fee is the fairest way to get paid without creating a conflict or “milking” your clients assets.

I wish you Good Luck. Financial planning done properly is a very worthwhile endeavor, for the clients you help and you can feel good about helping them.

Best of Luck,

Don

Jack FFR1846
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Re: Becoming a Certified Financial Planner

Post by Jack FFR1846 » Wed May 16, 2018 5:39 am

At 60, look into reduced/free tuition at state colleges. Massachusetts offers free tuition to citizens over 60 and I've already found a local state college that offers at least the series 7 courses. When I retire (next couple years), I'm planning on taking the free courses. I have no timeline and will look into what qualifies as "work" for the CFP. Insurance agency work? Bank? I know my local credit union has been openings all the time in their financial planning office. I would not be doing it to make a career, but because I want to learn, so perhaps going all the way to any exams aren't necessary.
Bogle: Smart Beta is stupid

Spedward
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Re: Becoming a Certified Financial Planner

Post by Spedward » Wed May 16, 2018 6:15 am

Got a cousin who did/does this.

Worked as a executive in a Fortune 500 till he was about 50 or so, had more than enough money, and got burned out.

Now he just helps folks just shy of retirement age and retired. Lots of SS optimization type stuff and alike. Also seems like he helps a lot of folks that do not otherwise have a ton to live on what I got. Sounds like he sees a lot of folks in this boat.

He loves it. He was already a CPA and Charted Financial Analysts (different CFA). I think he just went the CFP route offered by the AICPA. My point is there may be other routes but likely would take already having other things under your belt.
Last edited by Spedward on Wed May 16, 2018 6:16 am, edited 1 time in total.

aristotelian
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Re: Becoming a Certified Financial Planner

Post by aristotelian » Wed May 16, 2018 6:16 am

My understanding is that to even sit for the CFP exam, you need three years full time experience in the business. That would be a dealbreaker for me. Consider taking the CFP coursework and then working as an unlicensed "financial coach" instead.

https://www.kitces.com/blog/financial-c ... ecome-one/

carolinaman
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Location: North Carolina

Re: Becoming a Certified Financial Planner

Post by carolinaman » Wed May 16, 2018 6:37 am

bondsr4me wrote:
Wed May 16, 2018 5:34 am
OP, if you want to obtain the CFP go for it.

I would not pay any attention to the negativity posters.
You can do a lot of good helping others who do not have a clue about financial planning for their taxes, investments, insurance, estate.

Contrary to what was previously posted, doing CFP work is NOT a sales job; it is financial planning for your clients.
I would suggest you NOT accept commissions or do fee-only based on assets.
I believe charging an hourly fee is the fairest way to get paid without creating a conflict or “milking” your clients assets.

I wish you Good Luck. Financial planning done properly is a very worthwhile endeavor, for the clients you help and you can feel good about helping them.

Best of Luck,

Don
I agree with Don. However, a FP using an hourly rate for business model is a very difficult way to make a living. I have read in the past that Rick Ferri and other noted finance experts have said this. If OP is treating this more as a hobby then it makes more sense. You would generate some income but probably not enough to live off of. But it would be something you enjoy doing.

You would need to make sure you have proper credentials to advise people for pay. I am not clear on those options, but CFP seems to be a non starter since you would need to work for someone for 3 years to get credential.

tibbitts
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Re: Becoming a Certified Financial Planner

Post by tibbitts » Wed May 16, 2018 7:57 am

Diver4242 wrote:
Tue May 15, 2018 8:42 pm
I'm about to turn 60 and just got forcibly retired (aka laid off) from my IT job. I was burned out on it anyway. What I really enjoy is finance and financial planning. I've always read voraciously on the topic and have done well for myself. I like advising others and doing well for them (friends, family) informally.

I've been wondering what to do with my time after my last day next month, and this idea really has me excited. I understand that I can become a CFP by getting a certificate (I already have two bachelor's degrees) from a CFP-approved source and taking the exam. I'd also like to join NAPFA as I just want to work for an hourly rate to help people.

Has anyone taken this route and offer any advice? I'd particularly like to know what courses are good, likely distance/online learning. I'm sure there are a lot of bad ones out there. My soon to be former company will pay up to $2,500 for job retraining and this is what I'd like to use it for.

Thanks in advance for any help (and if this is the wrong area, administrators please move the thread to the appropriate place).
You missed the work experience requirement.

Do you like advising others and not doing well for them? That happens, you know.

How exactly will you work your "informal" conversations around to "oh by the way I'm going to charge you $200/hr for telling you this"?

Can you provide an example of a cold call (well, even to someone you know, but cold in the subject sense) you'll make?

Even some now-Boglehead-approved advisors started out in the cold cruel world of commissioned financial sales pushing high-cost products, and while I won't say they stole clients from their previous employers... well they did. Ethically when you bring a client to a previous employer you can argue if that's your client or theirs, but you have to decide how you feel about that. In fact a person might not have been a client if not for some combination of 1) your personal relationship with him/her; 2) your then-affiliation with a prestigious firm.

Cpadave
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Re: Becoming a Certified Financial Planner

Post by Cpadave » Wed May 16, 2018 8:04 am

I am a CFP and had a similar idea years back. However, I stopped doing any work in the area as there was more regulations and worry about liability and lawsuits. I understand you can buy professional liability insurance. Just was not worth it for me. Another important skill you would need is to be very sociable and do as much networking as possible. Again, this was not my thing.

Socal77
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Re: Becoming a Certified Financial Planner

Post by Socal77 » Wed May 16, 2018 8:17 am

I completely understand and agree that "fee only hourly" is technically the most correct way to advise investment decisions.

However I'd like to add that there is nothing unethical about gathering assets and charging an AUM fee so long as it small. What does Vanguard charge? .4 percent AUM?

The reason this may be optimal (not technically correct, but, real world optimal) is because with this compensation model you would, as others have mentioned, be able to make the advisor business model work full-time.

Another reason is that almost all investment/retirement savers would benefit even if they had to pay .03 to .17 percent index fund expense ratios plus a low AUM fee like Vanguards or even slightly higher. So the client pays total fees of .43 to .6 including expense ratios and AUM fees.

Have you talked to co-workers and seen their investment choices? Most would be far better off paying someone .43 to, gasp, 1% in total fees rather than what they would otherwise do without any advice.

You could put those people on track to have hundreds of thousands or millions more than they would have gotten otherwise.

wmackey
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Re: Becoming a Certified Financial Planner

Post by wmackey » Wed May 16, 2018 9:57 am

You do not need experience to sit for the exam. If you pass, you will need experience before they will certify you. I took the CFP course a few years ago. I did it mostly for my own education. I took one shot at the test, didn't pass. It was well worth it for the education, but it is a rough test.

Diver4242
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Re: Becoming a Certified Financial Planner

Post by Diver4242 » Wed May 16, 2018 11:40 am

aristotelian wrote:
Wed May 16, 2018 6:16 am
My understanding is that to even sit for the CFP exam, you need three years full time experience in the business. That would be a dealbreaker for me. Consider taking the CFP coursework and then working as an unlicensed "financial coach" instead.

https://www.kitces.com/blog/financial-c ... ecome-one/
This sounds like what I want to do, so thanks for the heads up. Reading through that article now. To the other responder, right it's just some income to help out in retirement, more or less part-time. I don't need six figures.

ShowMeTheER
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Re: Becoming a Certified Financial Planner

Post by ShowMeTheER » Wed May 16, 2018 8:59 pm

Diver4242 wrote:
Wed May 16, 2018 4:38 am
ShowMeTheER wrote:
Tue May 15, 2018 9:06 pm
My experience in doing this is 10 years old now, but prior poster mentioned the work requirement which is an annoying hurdle to the CFP. Some people find a way around but I had no luck (I knew that going in though).
ShowMeTheER, did you do the CFP course/exam and then just skip the 3-year requirement and just help people with financial planning at an hourly rate?

I'm definitely not going to work for some firm and do a sales job on them or have to focus on acquiring clients. I just want to help folks who don't understand this stuff to get themselves out of a hole and actually to steer CLEAR of the con jobs and bad advice.

I guess I'll have to look at the RIA (but I don't want to only focus on investments, really financial planning overall) and other routes, or maybe do the CFP course/exam and just be straight with prospective clients that I'm not CFP certified and why. So please keep the advice coming! Thanks so much.
Diver -

I did the coursework, passed the exam and then it fizzled out from there. So I never went fully into the profession in any way. I did submit my CFP application after finishing the exam, including explaining my relevant experience in helping people with financial/retirement/planning matters in my Corporate gig, but they wanted to see that you had directly managed people's money in some way. (my experience is 5x better and more relevant than a lot of the stuff that they did green light... which is the frustrating part.) Someone who has little financial knowledge but had sold financial products and chased rollover money was golden, for example.

As some others have suggested, if you can build that book of business and just help people out it would be great. My opinion is that lots of hurdles have been put in the way purposely to try to keep the existing hands in the money pie and limit others ability to break through. And unfortunately those hurdles have legal implications. There are some great people out there though so good luck hooking on with them to help pave your way.

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unclescrooge
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Re: Becoming a Certified Financial Planner

Post by unclescrooge » Wed May 16, 2018 10:10 pm

bondsr4me wrote:
Wed May 16, 2018 5:34 am
OP, if you want to obtain the CFP go for it.

I would not pay any attention to the negativity posters.
You can do a lot of good helping others who do not have a clue about financial planning for their taxes, investments, insurance, estate.

Contrary to what was previously posted, doing CFP work is NOT a sales job; it is financial planning for your clients.
I would suggest you NOT accept commissions or do fee-only based on assets.
I believe charging an hourly fee is the fairest way to get paid without creating a conflict or “milking” your clients assets.

I wish you Good Luck. Financial planning done properly is a very worthwhile endeavor, for the clients you help and you can feel good about helping them.

Best of Luck,

Don
As an independent cfp, you're in charge of drumming up new business... Thus it becomes a sales job. If you're not good at sales, you won't be able to get enough clients on a consistent basis.

bondsr4me
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Re: Becoming a Certified Financial Planner

Post by bondsr4me » Thu May 17, 2018 5:33 am

unclescrooge wrote:
Wed May 16, 2018 10:10 pm
bondsr4me wrote:
Wed May 16, 2018 5:34 am
OP, if you want to obtain the CFP go for it.

I would not pay any attention to the negativity posters.
You can do a lot of good helping others who do not have a clue about financial planning for their taxes, investments, insurance, estate.

Contrary to what was previously posted, doing CFP work is NOT a sales job; it is financial planning for your clients.
I would suggest you NOT accept commissions or do fee-only based on assets.
I believe charging an hourly fee is the fairest way to get paid without creating a conflict or “milking” your clients assets.

I wish you Good Luck. Financial planning done properly is a very worthwhile endeavor, for the clients you help and you can feel good about helping them.

Best of Luck,

Don
As an independent cfp, you're in charge of drumming up new business... Thus it becomes a sales job. If you're not good at sales, you won't be able to get enough clients on a consistent basis.
Promoting your business (ie: selling “yourself”) and “selling products” are two entirely different things.
Financial planning, if done on a fee-only basis, is not a sales job.
I don’t believe for one minute the CFP’s at Vanguard are “salespeople”.
They render advice for a fee.

Don

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unclescrooge
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Re: Becoming a Certified Financial Planner

Post by unclescrooge » Thu May 17, 2018 6:07 am

bondsr4me wrote:
Thu May 17, 2018 5:33 am
Financial planning, if done on a fee-only basis, is not a sales job.
I don’t believe for one minute the CFP’s at Vanguard are “salespeople”.
They render advice for a fee.

Don
Unless OP goes to work for vanguard he will spend most of his time selling his services, and not enough time doing financial planning.
Just because you don't sell commission based products doesn't mean you're not in sales.

bondsr4me
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Re: Becoming a Certified Financial Planner

Post by bondsr4me » Thu May 17, 2018 6:56 am

unclescrooge wrote:
Thu May 17, 2018 6:07 am
bondsr4me wrote:
Thu May 17, 2018 5:33 am
Financial planning, if done on a fee-only basis, is not a sales job.
I don’t believe for one minute the CFP’s at Vanguard are “salespeople”.
They render advice for a fee.

Don
Unless OP goes to work for vanguard he will spend most of his time selling his services, and not enough time doing financial planning.
Just because you don't sell commission based products doesn't mean you're not in sales.
As in any profession, it takes time to build a practice.
A good professional's reputation will in time do the "selling" for him/her.
Financial planning is not a one and one deal, it is an ongoing service: just as is tax preparation or accounting/auditing services or going to the doctor for an annual checkup or going to the lawyer to have a will updated for life's changes.
Peoples needs/circumstances change.
It has nothing to do with "selling"; it's all about rendering professional advice/services on as-needed basis.

Freefun
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Re: Becoming a Certified Financial Planner

Post by Freefun » Thu May 17, 2018 7:02 am

If I were in your shoes and enjoy it - I'd do it in a heartbeat.
Remember when you wanted what you currently have?

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