How to Begin a CFP Practice
There are a number of factors to consider and requirements to complete when looking to start your own CFP (Certified Financial Planner) practice. There are education requirements to complete, as well as a process of licensing and certification to undergo in order to become a professional CFP.
- Earn a minimum of a bachelor's degree in a relevant field, such as accounting or finance, from an accredited institution.
- Successfully complete the CFP Certification Exam.
- Complete a minimum of three years of work experience in the financial planning field.
- Draft a detailed business plan. Things to include are your specific goals with realistic due dates and your planned focus area: investments, insurance, taxes, real estate, securities, etc. You may consider hiring an accountant to help you manage the financial aspects of this business plan.
- Clearly define your planned practice structure. Do you plan on being the sole proprietor or do you plan on working with senior partners or advisers in your practice?
- Identify and emulate a business model that will allow you to stand out from other CFPs, especially those in your area. Consider whether you plan on working on a commission or fixed-fee basis.
- Determine if there are any local tax regulations and laws that you must be aware of before beginning your CFP practice. This information is easily obtained by calling your local county clerk or IRS office.
- Obtain required information on compliance and registration from your regional U.S. Securities and Exchange Commission (SEC) office. Much of this information can also be obtained through the SEC website.
- Lease an office space and begin advertising your services as a professional CFP to the community.
- Hire experienced, trained and professional employees to help you with clerical or administrative work. This will allow you to focus all of your time on the actual tax and investment strategy planning that your client base will require. It will also allow you to spend some time keeping up to date with current financial products and international economic trends.