Anyone on here a CFP?

[Debt Vigilante]

I was thinking about taking some steps in heading that way for a career. I have an MBA already, and I am currently studying materials for the series 7 exam (not going to take it any time soon, just wanted the extra knowledge). I just want to know a little about you:

Do you work for a bigger company (Edward Jones etc..)
Do you work independently?
What steps did you take to get where you are?


Look forward to hearing from some of you.

DV

[jIM_Ohio]

I have looked into it, but have not taken many steps
some advice given to me was that its tough to make a living the CFP route (most people which have a CFP sell something beyond financial advice).

[Debt Vigilante]

I have looked into it, but have not taken many steps
some advice given to me was that its tough to make a living the CFP route (most people which have a CFP sell something beyond financial advice).

Ya thats what it looks like to me too. Its hard to trust someone that is trying to tell you something.

[jpg7n16]

I passed the March exam, but am still working towards the experience portion.

I paid for it all on my own - no sponsorship. All classes, everything. I'm still looking for the type of job I'd like to have.

I didn't study that hard to sell you stocks you don't need.

[TheStreetCeo]

I'm not a CFP but have my series 7, 6, and 63, among other licenses. I used to own an insurance agency and spent my time selling that stuff. You're right, it's not an easy living and is highly competitive. I live in a town outside of the twin cities. We have 10,000 people in our town and 7 CFP's not including non CFP's like myself if that gives you any idea on how competitive it is.
It's usually commission only too. Money is earned on a scale. The more you sell, the higher the percentage you earn. I could earn as much as 85% of the principles 5.25%. You would then also get "trails" of like 3% each year. Tough business.

[Debt Vigilante]

I'm not a CFP but have my series 7, 6, and 63, among other licenses. I used to own an insurance agency and spent my time selling that stuff. You're right, it's not an easy living and is highly competitive. I live in a town outside of the twin cities. We have 10,000 people in our town and 7 CFP's not including non CFP's like myself if that gives you any idea on how competitive it is.
It's usually commission only too. Money is earned on a scale. The more you sell, the higher the percentage you earn. I could earn as much as 85% of the principles 5.25%. You would then also get "trails" of like 3% each year. Tough business.

So I am assuming you are no longer in that business?

[TheStreetCeo]

No sir. I went back to finance which I prefer. Sometimes, I wish I still had that agency, and sometimes I'm happy I don't like payday

[jIM_Ohio]

In the discussions I had (2 different people), one friend had either a series 7 or 8 (he is a broker, not sure if people work for him or not). He worked for a large company (might have been solomon, might be someone else?) and knew a person in his office with a CFP. That person's advice to me was it was the hardest test he ever took (there are lots of aspects on that test a broker may not know- like life insurance and estate planning).

In a second discussion I had with someone in my tax class in 2007, he had a series 7, and had worked for Fidelity and a few other financial companies. He had an LAH and a few other licenses, when we discussed what a CFP was (a summary of many different fields of trade), his comment to me was along these lines...

If you have the equivalent of a series 6 or 7, but do not sell securities, you are "wasting" that certification (CFP at minimum requires knowledge of the 6 and 63, not sure if 7 is needed for CFP). In either case a 6 or 7 allows for high income in and of itself- to bypass that income is not wise for someone which wants to be seen as smart with finances (by customers).
If you have the equivalent of an LAH, but choose not to sell insurance, there is further "wasted" education (there is lots of money to be had selling insurance).
If you have the knowledge of taxes, but do not charge to prepare people's taxes, then there is again wasted knowledge, which has significant value, which cuts into possible income.
While CFP also has knowledge of estate planning in it, it will be tough without a law degree to actually make money on wills and other estate issues.
And we went thru the CFP and the various fields it encompasses- passing the test is an impressive feat, but just because someone has the letters will not make their advice objective.

Making money (making a living) is more important than giving out good advice (its better to have 100-1000 clients which trust you with taxes or similar than to have 100,000 clients and give them each objective advice but not get into details of any aspect of their financial life). Maintaining more clients is more work for same revenue- better to prepare taxes for 1000 people and give financial advice to the 100 of those which want (need) the advice in any given year.

In this same second discussion, he also mentioned the need for "objective" advice is quite high, but the people which have the knowledge to be objective usually need to make a living too. Our HR block tax instructor was giving out advice during class... but he and I agreed it was far from objective (and in some cases far from good).

So my path is to learn the tax side in and out... I believe you cannot get a series 6 or 7 unless you work for a company which sponsors you, so if you are a consultant, and give advice on mutual funds, the licenses don't give you much anyway (can anyone here confirm this???). Make money on taxes because that is the low hanging fruit (everyone needs to do taxes each year, and it does not require any certification to do this).

Anything which is done beyond taxes is decent objective advice, but nothing will ever be objective unless the advice is free without a service attached to it (boards like this) and many times those situations are about general rules of thumb and trying to apply those basic principles.

[Debt Vigilante]

Jim- thanks for the input. Thats the type of input I was looking for.

[TheStreetCeo]

So my path is to learn the tax side in and out... I believe you cannot get a series 6 or 7 unless you work for a company which sponsors you, so if you are a consultant, and give advice on mutual funds, the licenses don't give you much anyway (can anyone here confirm this???).

You have that right. You have to have a sponsor to get the license. You have to have a valid and updated U4 as well.

[jIM_Ohio]

You have that right. You have to have a sponsor to get the license. You have to have a valid and updated U4 as well.

And based on what people have told me... you need the 6 to sell mutual funds (collect a load fee, or otherwise draw a commission on selling mutual funds) and you need the 7 to sell individual stocks and other securities (key word being sell).

If you give advice on what someone holds, no license is needed.

[am_vanquish]

I'm personally considering the CFA designation. Seems like the perfect mix of finance/investments without all the sales BS to me. My understanding is that because it has a higher barrier-to-entry, it also demands higher salary and job stability. I know it's not personal finance, but I like how it provides more stability than the CFP designation while also including more finance/investment work than the ASA/FSA designations I'm currently pursuing.

[snafu]

DS1 works 'back-room' as an analyst for large Canadian Bank. He had securities certificate while still in university because he has always been interested in finance [traits from grandfather]. Bank sponsored and paid for all CFP courses, they are $5K ea. here. He found the process challenging but the actual knowledge base was lower than he expected. Most of the students in his cohort didn't have degrees but were experienced mutual fund sales personnel.

[jpg7n16]

I'm personally considering the CFA designation. Seems like the perfect mix of finance/investments without all the sales BS to me. My understanding is that because it has a higher barrier-to-entry, it also demands higher salary and job stability. I know it's not personal finance, but I like how it provides more stability than the CFP designation while also including more finance/investment work than the ASA/FSA designations I'm currently pursuing.

My take on this is that the CFP needs to know investments as far as how they work and relate to an individuals situation - but all in all, needs to know how to get an overall picture of a client's specific situation, and not just deal with investments all day long. That is a piece of it, but recognizing estate planning issues, insurance coverage, retirement scenarios, etc. play just as big a role. (when you have people that just sell mutual funds think they're good on how to create a comprehensive plan because they know about one type of investment, contributes to such a high fail rate. That and the test was really tough.)

CFAs have great opportunities as portfolio managers, working with mutual/hedge funds, pricing derivatives for investment banks, and all sorts of other work that deal with the investments themselves. Their knowledge is very specialized to investments, but is really deep and thorough. But you'll usually not have to deal directly with a client.


If you're looking for investments and investments only, CFA is the way to go. If you really want to help people, go the CFP route.

[jpg7n16]

If you give advice on what someone holds, no license is needed.

If that advice is free.

If you give advice for a fee you either need a 63 & 65, or just a 66.

From Investopedia: Series 65 - Regulation of Investment Advisors

The provisions of the act set out both required and prohibited behaviors for advisers who meet the following definition:

An investment adviser (IA) is an individual or entity who:
for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing or selling securities, or who, for compensation and as part of a regular business, issues or promulgates analyses or reports concerning securities.

To translate that definition into plain English, we can break it down to three main components:

Giving advice about securities
•this includes references to securities in general, not just specific investment recommendations; for example, even advising a client to invest a set percentage in "stocks" is considered advice about securities

Being in the business of giving that advice
•this refers to presenting yourself as an investment adviser

Being compensated for that advice
•this includes receiving compensation of any kind, including fees, commissions, or a combination of the two - and the compensation does not have to be received directly from the client

Exam Tips and Tricks

Many questions on the exam hinge on the components of the definition of an IA. Remember that all three of these criteria must be present to require registration as an investment adviser. For example, you might find a question where a professional, such as an accountant or an attorney, provides advice about asset allocation but does not charge a separate fee for this service. In that case, he/she is not being compensated for the advice and so is not required to register.