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Picking a financial-planning professional

Dear Dr. Don,
Is a CFS as qualified to do financial planning as a CFP, ChFc, etc.?
-- Planning Perplexed

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Dear Perplexed,
There's an alphabet soup of professional designations to consider when you are interviewing a financial professional about his or her qualifications -- and whether they may help in developing a financial plan.

A Certified Fund Specialist, or CFS, has completed a 60-hour self-study curriculum on mutual funds and topics relating to investing in mutual funds and passed a national exam on this curriculum. This compares to a Certified Financial Planner, or CFP, who has taken a multicourse curriculum covering employee benefits, taxation, insurance, investments, estate planning, retirement planning and financial planning; passed a national exam on these topics and met the Certified Financial Planner Board of Standard's work experience requirement.

A Chartered Financial Consultant, or ChFC, has been through a course curriculum that embodies the CFP curriculum, plus has taken additional coursework in financial planning topics and met a work-experience requirement. ChFC designees and CFP certificants are both required to uphold the code of ethics of their respective organizations.

My good friends at the CFA Institute would tell you that you should expand your list to include CFA Charterholders. There are some other groups that would also like to submit for your consideration their professional certifications. The earlier Dr. Don column, "Picking a financial adviser," discusses some of these programs and offers some additional suggestions in choosing a financial adviser.

My best advice is to not rely solely on the professional designation in choosing a financial planner. Interview the planner, and ask about his or her experience, education, cost and services. Try to ensure that he or she is working in your best interest and not just talking the position.

The adage, "If you only have a hammer, everything looks like a nail," comes into play more often than it should in this field, and the client should keep that in mind when working with a financial planner. If you have misgivings, then get a second opinion.

Comprehensive financial planning is a lot more than managing investments, and if you're looking for a comprehensive financial plan you need a planner or planning team that can manage all aspects of that plan.

Editor's note: Dr. Don is a CFA Charterholder and is an associate professor of finance at The American College, an academic institution that both offers the ChFC program and is a CFP Board Registered Program education provider. He is also a candidate for the CFP Board's certification.'s corrections policy -- Posted: Jan. 12, 2006
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