Should You Use a Financial Planner?

by David Bakke

financial plannerIn the course of my time creating and developing this blog, I have learned so much more than I ever thought possible in the field of personal finance.  Recently, it occurred to me that it might be worth looking into becoming a Certified Financial Planner. 

I know a few CFPs, but don’t know anything about the certification process.

Now, if any of you know anything about me or may have read my book, you know that I come out firmly against the use of any kind of debt consolidation companies to get yourself out of debt.  Initially, I thought that CFPs would fall under this same category, and therefore, should never be employed.

However, in my small amount of internet research, I found this not to be the case.

In a nutshell, here is what I found out about how to become a CFP, and whether or not you should employ one, in my opinion.

The certification process is much more extensive that I ever imagined.  Originally, not knowing any differently, I thought that becoming certified was similar to becoming a certified home inspector.  If you didn’t know, basically, there is NO certification process involving home inspectors.  Basically, you can just wake up one morning and decide to be a home inspector, and poof!, you’re a home inspector.

This is far from the case with Certified Financial Planning.   A Bachelor’s Degree is a pre-requisite.  There are other educational requirements.  But apparently, any CPA, any licensed attorney, and people in a few other professions can get around these educational requirements.  For those not in these professions, there are a variety of courses available at universities to take which would satisfy this part.

Additionally, there is a 10-hour exam that must be passed. It covers a variety of topics, but basically tests your knowledge in just about all areas related to financial planning, and your abilities to communicate this knowledge to clients.

There is also an experience requirement of three years in work related to certified financial planning.  You must also pass a background check and pays fees that look to be in the area of $1000 and then also some annual fee to maintain your certification.

What I did learn was that I think that CFPs are a group that can be trusted (as opposed to the home inspectors I spoke of earlier).  Would I ever consider becoming one?  Maybe, but not right now.  It seems that your income is based almost solely on your ability to market, network and build your client base, which I would not have enough time to do effectively.  However, I would consider it as a future endeavor.

I guess more importantly, the question remains:  Should you consider using one?

My answer is this:  if you are in need of some advice on how to get out of debt, then I would absolutely NOT use one.  The only reason that I say this is that all the advice you need is out there for you to learn through either experience or research.  I did it strictly through experience.

On the other hand, should you need advice on just about any other topic regarding personal finance (investing for the future, retirement planning, estate planning, etc.)  I would consider utilizing the service of a CFP. 

So, depending on what you r needs are, you may want took into the use of a financial planner.  I think that they can be trusted and could prove to be helpful in a variety of areas outside the realm of debt management.

Comments?  Suggestions?  Feel free to do so below.


1 Michael McCarthy May 13, 2010 at 5:42 pm

Hi David,

While I can agree with you on most of what you mentioned above I have to disagree with you on the idea that a CFP cannot help you in dealing with debt. Just recently a new client came on in a heap of debt. Our firm assisted by mapping out all the areas of debt, listing them out by amounts and interest rates, assisted the client with a decesion to liquidate some assets and use a home refinance to clear out the rest, this dropped the effective intrest rate on total debt, dropped the monthly outflow ofcash on debt payments so that the client could avoid paying fees when they would forget to make one of their 35+ payments by consolidating that to one payment with, like I said, a lower effective rate. In addition they can now build up emergency funds with their additional cash flow they can use to avoid debt in the future. The firm also assisted them in selecting a mortgage firm and helped in negotiating out unneccesary fee’s. we then followed it all up with extensve assistance in helping the client realize what situations and thought processes contributed to their issues in the begining, and how to map out future cash flows.

I would suggest if your interest in the CFP continues you look into a organization known as NAPFA. Also, look into the diffrent types of CFP’s some work on commisions while other accept only fees. A fee only advisor is one that has the least economic bias and is the most independent.


2 David/yourfinances101 May 14, 2010 at 10:05 am


3 David/yourfinances101 May 14, 2010 at 10:09 am


First, thanks for your kind words.

I guess the gist of what I was trying to say is that for me personally, I would not spend money to have someone help me get out of debt. To me, this would be counter-productive.

However, I already knew the root causes of what caused my debt, and it didn’t take me too long to figure out what I needed to do to actually get out of debt.

If one has no clue to the answers to these two questions, then maybe a CFP would be the answer.

Also, another point I was trying to make was to distinguish the difference between debt consolidation companies and financial planners.

The piece was meant to be complimentary towards people in your industry. Maybe it didn’t come off that way, but that was my intent.

I added you on Facebook, I would love to connect more.

Thanks for commenting

4 Marissa May 16, 2010 at 10:01 pm

Hi David,

This is a great take on CFPs. I have been using a financial planner for quite some time now. I have found him to be very helpful, not for getting out of debt, but just for guidance. He has explained the many options I have of investing my money, be it mutual funds, stocks, etc. I have found him to be very helpful and I would definetely recommend CFPs for financial guidance.

5 David/yourfinances101 May 16, 2010 at 11:38 pm


Thanks for commenting.

I agree with you fully.

Some may need them for getting out of debt if they are completely mired in debt and don’t know what to do, but I was able to get out on my own.

Thanks for stopping by.

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