In the course of your financial career, you can come across a client whose present circumstances are problematic. Finding the right solution during your conference could present some difficulties. Clients with ostensibly straightforward conditions may have complicated life insurance, tax, or estate planning-related problems. They can also be ignorant of those circumstances.
It's crucial to ensure that you are prepared to recognize a variety of situations and effectively lead your clients through them in order to prevent these difficult cases. Your credibility and revenue will both increase as a result of your increased expertise. In this blog, we'll look at three credentials—the Certified Financial Planner (CFP), Chartered Life Underwriter (CLU), and Chartered Financial Consultant—that give you the expertise you need to manage practically any client's situation (ChFC).
CFP: The Media's Choice
The CFP mark is offered and governed by the Certified Financial Planner Board of Standards in Washington, DC. The CFP designation is perhaps the most widely recognized credential in the field today, due largely to the amount of exposure it has received from the media.
This credential is generally the designation of choice for those who wish to offer fee-based financial planning and traditionally has been more heavily pursued by those in the tax, legal or investment professions. Insurance agents who obtain this designation can use it to provide comprehensive financial plans for clients and show them how their various insurance needs fit into such plans.
CFP Curriculum
The CFP curriculum contains five core courses that cover the following planning topics:
- Investment planning
- Insurance planning
- Estate planning
- Tax planning
- Retirement planning
- Education planning
- Ethics and the financial planning process
There are approximately 106 conceptual topics related to financial planning that are covered in this material. Once all coursework is successfully completed, including The Capstone course, a comprehensive financial plan development course created to enhance your knowledge, skills and abilities. candidates must pass a rigorous,six-hour exam. Once the candidates pass the exam, they must also pass a background check and pay an entrance fee before receiving their certifications.
Once you become a CFP, you'll have to renew your certification on a regular basis. This is required every two years. To re-certify, you have to pay a fee of $355 along with a completed application, and complete 30 hours of continuing education—28 hours in financial planning and two hours in approved ethics.
Benefits of Becoming a CFP
Becoming a CFP takes a lot of hard work and commitment. But there are a lot of benefits to those who pursue this designation. First of all, it gives you the ability to help your clients meet their financial goals. It also provides you with a boost in your income—becoming certified can give you the potential for a higher salary.
Chartered Life Underwriter: The Oldest Designation
The CLU is widely considered to be the most respected insurance designation in the industry. This designation was created in 1927 by the American College in Bryn Mawr, Pennsylvania. The CLU has traditionally been pursued by agents who wish to specialize in life insurance for business or estate-planning purposes.
CLU Curriculum
The current course curriculum for the CLU includes five required courses. They include the following:
- Fundamentals of Insurance Planning
- Life Insurance Law
- Individual Life Insurance
- Fundamentals of Estate Planning
- Planning for Business Owners and Professionals
In addition to the five required courses, individuals must also enroll in three elective courses. These can be chosen from such subjects as the following:
- Financial Planning: Process and Environment
- Individual Health Insurance
- Income Taxation
- Group Benefits
- Planning for Retirement Needs
- Investments
- Estate Planning Applications
Chartered Financial Consultant: Advanced Financial Planning
The Chartered Financial Consultant (ChFC) credential was introduced in 1982 as an alternative to the CFP mark. This designation is also available through the American College. This designation has the same core curriculum as the CFP designation, plus two or three additional elective courses that focus on various areas of personal financial planning. But the biggest difference is that it does not require candidates to pass a comprehensive board exam, as with the CFP.
Due to the number of courses that overlap both the ChFC and CFP, the ChFC and CLU marks are often taken by individuals seeking in-depth knowledge of both financial planning and insurance, but who wish to avoid a lengthy board exam. Some of the areas the program outlines are:
- Behavioral Finance
- Small Business Families
- Financial Planning for LGBTQ Clients
- Helping Families with Special Needs Dependents
Which Is Best?
There really is no right answer to this question. The answer lies in your preferred area of focus. If you want to focus more exclusively on life insurance, then the CLU designation provides the most complete curriculum for you. If you prefer to focus on comprehensive financial planning, then one of the other two credentials are a better fit.
No designation is considered better than the others.
It should be noted that none of these designations are considered to be inherently superior to the others. The CFP designation requires less coursework but forces its students to learn the material in a way that allows them to proactively apply it in the board exam. The CLU and ChFC credentials require more coursework but have no comprehensive exam.
The Bottom Line
Agents and brokers who decide to earn one of these designations will soon discover that some of the same coursework is required regardless of which designation is chosen. Those who want to obtain only one of these credentials will need to personally evaluate the courses that are required for each and their relevance to their specific areas of practice.
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