A personal finance blog dedicated discussing such topics as budgeting, asset allocation, 401K, IRA, cash flow, insurance, financial planning, portfolio management, and other areas in personal finance.


Thursday, March 24, 2005

Are Financial Planners Needed?

Some of the comments I received on one of my other posts asked me why I wanted to pursue a Certificate in Financial Planning. He said that CFPs are not experts in anything in particular and that maybe I would be better off if I pursued a more specific designation like a CLU (Chartered Life Underwriter) or CPA.

So, what is the purpose of the financial planner? Why should people want to consider working with one? In my opinion, it has much less to do with the designation and much more to do with the way the business is conducted.

A financial planner is a generalist. Their job is to help people write financial plans and then help them implement those plans. It is the financial planner's responsibility to recognize the areas that they are not experts in and refer that business to a qualified expert. If the planner refuses to do this, they are doing the client a major disservice and are opening themselves up to a potential lawsuit.

I like to think of the financial planner as the conductor of a financial orchestra. Although each of the experts know their particular part of plan the way the members of an orchestra each know their instruments, it is the conductor or financial planner that brings them all together to make the project complete.

Does that make sense? I'll post later today about my plan for achieving my CFP designation by March of 2006.