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As a physician with substantial income (or income potential), you will most likely be contacted by a number of individuals offering various types of financial products and services throughout your career. If you are in the market for an advisor, you will want to know the qualifications and experience level of each one you are considering. Unlike medicine, which has a standardized path that physicians must take to gain the education, training, and experience necessary to obtain board certification, the insurance and financial services industry does not. While advisors must pass certain tests to earn a license in securities or insurance, for the most part, anyone can call himself or herself a financial advisor. Credentials and Certifications Finding the right financial advisor to help you build your financial future can be as challenging as choosing the right doctor to care for your health, so it is important to look for several key credentials. Following is a brief summary of some of the most recognizable designations or certifications that you might see among financial service professionals and what it takes to earn them. Certified Public Accountant (CPA): CPAs provide you with advice on tax matters and help you prepare and submit your income tax returns to the Internal Revenue Service. To be a CPA, candidates must pass a 14-hour computer-based test with 4 sections: auditing and attestation; financial accounting and reporting; regulation; and business environment and concepts. There are also work experience requirements that must be met. Not all accountants are CPAs. CPAs must meet stringent continuing education requirements and are regulated by states as well as their profession’s code of ethics. Personal Financial Specialist (CPA/PFS): A PFS is a CPA who has demonstrated both knowledge and significant practical experience in the area of personal financial planning. Only CPAs who are members of the American Institute of Certified Public Accountants can earn this designation. Certified Financial Planner (CFP): The CFP certification is one of the most recognized and prestigious credentials in the financial services industry. CFPs have completed a series of courses in investments, insurance, income taxes, estate, and retirement planning. They have also passed a comprehensive 10-hour certification exam. Additionally, CFPs must have at least 3 years of planning experience and meet stringent continuing education requirements as well as have a bachelor’s degree. While an estimated 700,000 people currently call themselves financial planners, only 1 in 10 holds the CFP designation. If you need help with more than 1 issue in your financial life or if you are targeting long-term goals like retirement or college, make sure a CFP is on your list. Chartered Financial Consultant (ChFC): ChFCs have credentials similar to CFPs. ChFCs have completed a series of courses and exams covering financial, insurance, and estate planning subjects. The ChFC program provides financial planners and others in the financial services industry with in-depth knowledge of the skills needed to perform comprehensive financial planning for their clients. Chartered Life Underwriter (CLU): CLUs are insurance agents who have completed comprehensive educational courses and demonstrated expertise in different areas of estate and insurance planning. This designation is specifically designed to enhance the knowledge of people employed in the life insurance industry. CLUs must also have at least 3 years of professional experience. Chartered Financial Analyst (CFA): CFAs have expertise in investing and portfolio management. They have passed 3 exams based on investment principles, applied financial analysis, and investment management. Each exam is approximately 6 hours in length. Additionally, CFAs must have at least 3 years of experience in the investment decision-making process. Generally, the CFA designation is recognized as the definitive standard for measuring competence and integrity in the fields of portfolio management and investment analysis. The Steps Financial planning takes the guesswork out of managing your finances and helps you understand the implications of each financial decision you make. Everyone has different goals, so it is important to have a unique plan that works for you and your financial situation, both now and in the future. The following 7 steps will help you find an advisor who understands and meets your unique goals and needs
Summary No matter which financial advisor you choose, make sure the one thing that you have in common is an uncompromised interest in your financial health. Start your search for a competent financial advisor today and begin enjoying better financial health tomorrow.
W. Ben Utley, CFP, is the lead advisor with Physician Family Financial Advisors, a fee-only financial planning firm helping doctors throughout the United States to save for college and invest for retirement. He can be reached at 541-463-0899 or by email to ben@physicianfamily.com.
Lawrence B. Keller, CFP, CLU, ChFC, RHU, LUTCF, is the founder of Physician Financial Services, a New York–based firm specializing in income protection and wealth accumulation strategies for physicians. He can be reached at 516-677-6211 or by email to Lkeller@physicianfinancialservices.com with comments or questions.
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