How Certified Financial Planners Work

Think only the super-wealthy need certified financial planners? Think again. Anyone dealing with debt or saving for retirement can benefit from using a certified financial planner. See more investing pictures.
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Certified financial planner: It sounds like something to help very rich people keep track of their big incomes, extensive investments and multiple bank accounts. That's not the case, however. If you have debt, if you're saving for retirement or if you just have general questions about your finances, you might consider a certified financial planner.

A certified financial planner, or CFP, can help you solve the money problems of everyday life. Have your expenses suddenly spiked? Maybe you've come into money you weren't expecting, and now you have to sort through the tax implications? A CFP can clear up your financial uncertainty. If you're not sure how to proceed with financial decisions, a CFP can be a very good investment [Source: MacDonald].

Investing Pictures

­­If you decide to sit down with a CFP, you can expect expert help at getting a handle on your finances. Your CFP­ will study your income, taxes, investments, debts and all the other elements of your financial picture. From there, you'll figure out how to achieve your goals. Your CFP will be there every step of the way to help you identify your goals, find and evaluate financial strategies, and come up with a plan. After you get started, your CFP will check in with you regularly to help you stay on track.

All financial planners are not created equal, however. Anybody can say that he or she is a financial planner. But to be certified by the Certified Financial Planner Board of Standards -- an organization committed to ensuring that CFPs have their clients' best fiduciary interests in mind -- CFPs have to meet educational requirements and pass a nationwide test. The grueling test (10 hours, spread out over two days) covers retirement planning, investments, insurance and taxation among other topics [Source: Board of Standards].

­But before you go hunting for one of your own, you need to think about what kind of CFP you want to work with. Read on to find out about two kinds of CFPs, and about what makes them different.­