How do you become a Financial Planner or Certified Financial Planner (CFP)?
In Australia, becoming a financial planner is surprisingly easier than you would expect. From a legal standpoint, to offer personal financial advice to some one based on their personal circumstance, you are required to be RG146 Compliant. Although there are short courses that you can do to make you RG146 compliant, in reality when looking for financial planning roles, employers will require you to have an absolute minimum of a Diploma of Financial Services (Financial Planning), often abbreviated as 'DFS' in job descriptions. It's important to note however that standards have risen and nowdays, most of the bigger banks and firms are requesting that you have a minimum Advanced Diploma of Financial Services (Financial Planning), often abbreviated as 'ADFS' in job descriptions. It's remarkable that such high paying financial planner roles are achievable at an educational level that is less than a degree but in the case of financial planning, this happens to be the case. Bare in mind, after completing your Diploma or Advanced Diploma you're generally required to start off in an entry-level role as either a paraplanner (who assists a financial planner) or a financial assistant in a financial services environment.
To become a Certified Financial Planner (CFP) in Australia, you're required to meet certain extra criteria with regards to education and relevant work experience as well as undertake the CFP Certification Program. Prerequisites to be granted entry into the CFP Program as stated by the FPA are as follows (all the following points must be satisfied):
- Current individual membership of the FPA
- Twelve months appropriate relevant experience, Candidates who do not hold Authorisation with an AFS Licensee must submit their Record of Experience for verification by the FPA before enrolment will be approved
- One of the following education pathways:
a.) Approved bachelorís degree, masterís degree or higher in financial planning;
b.) Bachelorís degree, masterís degree or higher in a finance-related discipline that has been assessed by the FPA for entry;
c.) Bachelorís degree, masterís degree or higher in a non-finance-related discipline PLUS Advanced Diploma of Financial Services (Financial Planning) or FPA Diploma of Financial Planning.
The CFP Program itself is merely a series of extra theoretical modules followed by a final certification assessment.
You may be wondering what the benefits are of achieving Certified Financial Planner or CFP Status. To begin with, the average salary of a Certified Financial Planner is significantly higher than that of an ordinary financial planner. Many of the top end financial planning roles favour those with CFP Status as it implies a higher level of education, training and experience.
Furthermore, your CFP Status will give you more flexibility with the types of roles you can apply for. CFP is the highest form of certification you can receive as a financial planner and by becoming a CFP, your image as a financial planner is greatly enhanced, valued and well respected.