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What Are the Different Types of Financial Planner Qualifications?

K. Kinsella
K. Kinsella

Financial planners are individuals who assist consumers with tax preparation, investment planning and major financial decisions. In some countries, financial professionals must obtain a license or permit prior to working as a planner. Other types of financial planner qualifications include accounting credentials, tax preparation licenses and even securities and insurance licenses.

In many instances, financial planners have degrees in finance, accounting or similar topics. Regulatory organizations in some areas arrange training classes for these financial professionals and the training normally culminates in an examination. Those who successfully pass the exam can apply for a license or a certificate of completion. The training and the examination normally test the candidates’ knowledge of financial matters but also challenge the candidates to make ethical decisions by presenting hypothetical situations similar to the ones that planners often encounter. Successful examination candidates must exhibit an ability to make recommendations that are in the best interests of the client regardless of the financial impact on the planner.

Woman holding a book
Woman holding a book

While some planners work independently, many finance firms hire financial planners. These firms expect job applicants to have financial planning licenses but other types of financial planner qualifications that firms expect candidates to have include licenses to work as accountants or tax professionals. Financial planners are tasked with saving their clients money and qualified tax professionals can use their knowledge of tax deductions to make tax efficient planning recommendations. Accounting skills are useful for planners who work with small business owners whose personal and business assets are often intermingled.

Financial planner qualifications in some nations typically include law degrees. In some instances, there are tax advantages to creating various types of trusts and other legal entities to hold assets. Laws in some nations mean that only a lawyer can draw up a valid trust document. Consumers can save money by hiring a financial planner with a law degree rather than having to pay a fee to seek advice from a planner and then paying a separate fee to have an attorney draft a trust.

Discussions between planners and clients often involve securities and insurance products because retirement planning usually results in the purchase of securities and estate planning usually involves insurance products. In many countries, financial professionals cannot provide investment or insurance advice unless they have securities or insurance sales licenses. Consequently, at full service financial firms standard financial planner qualifications usually include both of these licenses. As with the law degree, clients can save money by working with a financial planner who can make sound investment decisions and make arrangements to buy and sell securities on the client's behalf.

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