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Old 01-27-2019, 09:55 AM   #61
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I used that site. But there are hardly any nearby and the one that was listed charged the high fees.

Sounds like you got a really good one.
It's better if they are not nearby in my opinion. Pick one in a location you like to visit. Do most meetings by phone and then do once every few years in person... a tax deductible trip for tax/financial planning. I think that's deductible!?

Plus, I know for me I'd rather have someone far away knowing my business. Local people have big mouths and I don't need my finances being known about.
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Old 01-27-2019, 10:59 AM   #62
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It's better if they are not nearby in my opinion. Pick one in a location you like to visit. Do most meetings by phone and then do once every few years in person... a tax deductible trip for tax/financial planning. I think that's deductible!?

Plus, I know for me I'd rather have someone far away knowing my business. Local people have big mouths and I don't need my finances being known about.
GREAT suggestion CaliKid!
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Old 01-27-2019, 11:00 AM   #63
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My Vanguard plan was focused mostly on whether we "had enough" and asset allocation. Pretty basic stuff and what I expected. I've never seen or heard of a plan that covers all the bases that LOL! listed in post #52... especially for free. That would be a custom plan and cost big $$$.
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Old 01-27-2019, 11:46 AM   #64
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... Google SPIVA at some point. ...
Yes. S&P has been publishing those reports twice a year for fourteen years and they are all the same. There is just a little jitter in the percentages from one six-month period to the next. Here, coincidentally from 2016, is a graphical version:




So, you say, "No problem. I'll just be sure to hire only managers who will outperform."

There is a second, equally valuable, recurring S&P report called the "Manager Persistence Report Card." What it shows, every time, is that past performance absolutely does not predict future results. Basically, the top managers from the past five years are no more likely to excel during the next five years than any other fund manager on the list. Its completely random. All luck, no skill. This is super-counterintuitive. Very hard to accept, but it is true. There are also academic studies that confirm this.

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It's better if they are not nearby in my opinion. Pick one in a location you like to visit. Do most meetings by phone and then do once every few years in person...
For those who are interested in this strategy I'd suggest reading "The Coffeehouse Investor" by Bill Schultheis. (http://www.coffeehouseinvestor.com/) I met Bill on an investment advisor survey trip for a nonprofit. He is in Seattle and he is the real deal. His business partner is a CPA, so they have that base covered too. Plus, what other author gives you a recipe for pumpkin pie?

(His book is a good read even if you're not looking for an FA and don't bake pies.)
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Old 01-27-2019, 11:51 AM   #65
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It's better if they are not nearby in my opinion. Pick one in a location you like to visit. Do most meetings by phone and then do once every few years in person... a tax deductible trip for tax/financial planning. I think that's deductible!?

Plus, I know for me I'd rather have someone far away knowing my business. Local people have big mouths and I don't need my finances being known about.

Honestly- no one knows us around here hardly. We live a pretty secluded life. I have absolutely no worries about that.


Then again- we will be moving out of state in another 2 years so the local guys will be not so local anymore.
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Old 01-27-2019, 02:40 PM   #66
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I want the FP to give US the advice of what to do with it and WE take it from there on our own. Maybe meet a few times with the FP and pay by the hour or visit.
Perfectly reasonable. So look for an hourly fee-only fiduciary planner.

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I just recently spoke with a Dave Ramsey vetted FP from Rick Edelman Financial Engines.
Are you sure about that combination?

All the financial planners in Edelman are employees, not independent. I suppose it's possible, but I'm surprised Ramsey would vet any of them.

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He, too, said we are too conservative and should go with more stocks and the Financial Engine tool also says this but yet when it calculates out what we have it looks like we are good the way we are.

I just don't get it.
Did you ask for an explanation? My planner explains everything when I ask. And I always keep asking until I understand. That's what they are being paid to do.
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Old 01-27-2019, 03:15 PM   #67
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I'm in a similar quandry with Meleana, the OP, but for different reasons. We have a sizeable 401K account with TRowe Price as well as IRAs and other 401Ks, but we've only spoken twice to a TRowe Price advisor, once when we retired in 2013 and recently last December when I inquired about moving half of my TRowe account funds to TSP. I've been quite happy with the online tools TRowe has for us. It serves my needs, though I don't really use it alot. (TRowe gives me a 97 percent confidence factor for retirement success, which is kinda strange since my Federal pension covers all of our retirement needs, and then some -- this confidence level is also dependent on the level of income you think you need for retirement with TRowe generally establishing a 70 percent baseline of your last annual income level.)

I have been DIYing most of the issues raised by Meleana, with occasional help from professionals in specific fields. I don't think there is a Jack-of-all-trades CFP who can handle all the issues raised: SS strategies, Tax issues, real estate relocation matters, investment portfolio management, and estate and legacy planning. Even those CFPs in the Garrett Network have their limitations -- and most will use the same software planning tools available to all CFPs -- and I have yet to find any CFP as knowledgeable as those posting here or on Bogelheads when it comes to Roth Conversions and tools available to optimize Conversions.

In our case, we were very comfortable with SS stratagies (I'm WEP reduced and took SS at 64; wife at 66 took spousal benefits on my PIA and will take her own retirement benefits at 70, in two years.) We use a trusted CPA for tax issues and our returns are fairly complicated with personal and partnership returns. I file my BIL's tax return as he has MS and no longer capable of managing his financial affairs. And I file a 1041 Trust Return for an Irrevocable Trust my MIL established shortly before she passed away in 2017.

Our professional support for estate planning, including MIL's plans were primarily our estate planning lawyer and tax software, but a lot of this legwork -- funding Trusts, re-tiltling assets, selling assets, etc -- was done by ourselves. Similarly, relocation issues -- we moved from Virginia to NC -- were primarily addressed by skillful real estate agents and we also had a complicated 1031 exchange issue which we handled by ourselves with a 1031 exchange intermediary. And for Medicare and other health insurance issues, we don't believe any of the "advice" we've seen from Medicare insurance specialist and literature covers the waterfront as well as information from online blogs like M. Kitces, especially when it comes to IRMAA issues.

Though I feel very confident going forward that we can continue to manage all of our financial house, as the primary financial caretaker in my family with a spouse that is not very interested in these matters, it makes sense to me to enlist the aid of a CFP primarily for succession planning. If I'm no longer around (or if both of us are no longer around to tell our heirs about estate issues), I'd want a professional/CFP to be knowledgeable about our financial resources to help the survivor or heirs navigate, initially, our financial assets. Also, a once a year check-up or review by a CFP would be a good idea to ensure that our plans aren't de-railed by potential cognitive issues like dementia or CRS ("Can't Remember Sh*t) and it would be a good way to brief the less financial knowledgeable spouse about finanical matters, annually.
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Old 01-27-2019, 03:30 PM   #68
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Perfectly reasonable. So look for an hourly fee-only fiduciary planner.


Are you sure about that combination?

All the financial planners in Edelman are employees, not independent. I suppose it's possible, but I'm surprised Ramsey would vet any of them.


Did you ask for an explanation? My planner explains everything when I ask. And I always keep asking until I understand. That's what they are being paid to do.

This FP was referred to me through Dave Ramsey's Smart Investor program- yes I am sure. He supposedly vets some FP's and this guy is one- that is why he was referred through his program.


And Edelman now has merged with Financial Engines.


I did not ask this guy about the difference between his suggestions and the tool, but I do remember asking the same to the T Rowe Price Advisor this because their Future Path tool said the same thing and yet he was saying more stocks and less cash (sure- they want my bank account money). He said he used the Monte Carlo thing and well- so does Future Path.



He actually did not answer me- just evaded my question.
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Old 01-27-2019, 03:33 PM   #69
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This FP was referred to me through Dave Ramsey's Smart Investor program- yes I am sure. He supposedly vets some FP's and this guy is one- that is why he was referred through his program.
Strange.
Maybe he was referred before he became an Edelman employee.

Whatever. You need hourly help from a fee-only fiduciary planner.
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Old 01-27-2019, 03:51 PM   #70
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I'm in a similar quandry with Meleana, the OP, but for different reasons. We have a sizeable 401K account with TRowe Price as well as IRAs and other 401Ks, but we've only spoken twice to a TRowe Price advisor, once when we retired in 2013 and recently last December when I inquired about moving half of my TRowe account funds to TSP. I've been quite happy with the online tools TRowe has for us. It serves my needs, though I don't really use it alot. (TRowe gives me a 97 percent confidence factor for retirement success, which is kinda strange since my Federal pension covers all of our retirement needs, and then some -- this confidence level is also dependent on the level of income you think you need for retirement with TRowe generally establishing a 70 percent baseline of your last annual income level.)

I have been DIYing most of the issues raised by Meleana, with occasional help from professionals in specific fields. I don't think there is a Jack-of-all-trades CFP who can handle all the issues raised: SS strategies, Tax issues, real estate relocation matters, investment portfolio management, and estate and legacy planning. Even those CFPs in the Garrett Network have their limitations -- and most will use the same software planning tools available to all CFPs -- and I have yet to find any CFP as knowledgeable as those posting here or on Bogelheads when it comes to Roth Conversions and tools available to optimize Conversions.

In our case, we were very comfortable with SS stratagies (I'm WEP reduced and took SS at 64; wife at 66 took spousal benefits on my PIA and will take her own retirement benefits at 70, in two years.) We use a trusted CPA for tax issues and our returns are fairly complicated with personal and partnership returns. I file my BIL's tax return as he has MS and no longer capable of managing his financial affairs. And I file a 1041 Trust Return for an Irrevocable Trust my MIL established shortly before she passed away in 2017.

Our professional support for estate planning, including MIL's plans were primarily our estate planning lawyer and tax software, but a lot of this legwork -- funding Trusts, re-tiltling assets, selling assets, etc -- was done by ourselves. Similarly, relocation issues -- we moved from Virginia to NC -- were primarily addressed by skillful real estate agents and we also had a complicated 1031 exchange issue which we handled by ourselves with a 1031 exchange intermediary. And for Medicare and other health insurance issues, we don't believe any of the "advice" we've seen from Medicare insurance specialist and literature covers the waterfront as well as information from online blogs like M. Kitces, especially when it comes to IRMAA issues.

Though I feel very confident going forward that we can continue to manage all of our financial house, as the primary financial caretaker in my family with a spouse that is not very interested in these matters, it makes sense to me to enlist the aid of a CFP primarily for succession planning. If I'm no longer around (or if both of us are no longer around to tell our heirs about estate issues), I'd want a professional/CFP to be knowledgeable about our financial resources to help the survivor or heirs navigate, initially, our financial assets. Also, a once a year check-up or review by a CFP would be a good idea to ensure that our plans aren't de-railed by potential cognitive issues like dementia or CRS ("Can't Remember Sh*t) and it would be a good way to brief the less financial knowledgeable spouse about finanical matters, annually.

That is funny. The T Rowe Price Future Path tool puts us at 98% with or without more stocks, And- we have no pensions.

What is TSP?


There are CPA firms that do holistic financial planning. They coordinate and work with estate attorneys. They most certainly can help with a SS strategy and a strategy to withdraw funds to live on that are the most tax advantaged. They can tell us how much we can safely withdraw.They can also give some insight into our relocation dilemma and what we can afford to pay for another home.

We actually might try to sell our home ourselves since it has not appreciated in 31 years and paying the real estate commission will make things worse for us. Of course, we would have an atty.


My spouse also is not into the finances and neither is our son, so another reason to have some professional help and maybe someday to manage our investments also.


I have always been a do it yourselfer but I am becoming overwhelmed and it would be nice to just have someone pull it l together for us. I do our taxes and I do our son's taxes.



I would like to have a life and have everything more or less on autopilot. I just need a plan and some help and then can take off from there.
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Old 01-27-2019, 04:05 PM   #71
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Strange.
Maybe he was referred before he became an Edelman employee.

Whatever. You need hourly help from a fee-only fiduciary planner.

Maybe. But there was also another one from Edleman that was referred.


Yes- right. Is all a matter of semantics. Some are fee based; some are fee only; some are hourly; some are annually; some are quarterly; some are by the visit. Can drive a person nuts!


I am going to call some CPA firms and also an hourly CFP through Garrett that looks like he has hourly fees.
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Old 01-27-2019, 05:41 PM   #72
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I would go with an hourly or a fee for service type FP if you are inclined to seek "professional" direction. The previous chart by OldShooter in post #40 is pretty telling IMO. What is missing in that post is when the market takes a loss of, say 20% of a 1,000,000 investment, you loose $200,000 (understandable) and still have to pay the FA an additional $10,000.

I used to think that people use FA's because they are insecure in their ability to manage their finances. I recently have changed my opinion to people somehow wanting someone to blame when things go South. It is a lot easier for someone to accept that "he" lost my $210,000 instead of admitting that "I" made a mistake that made me lose $200,000. Right or wrong.
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Old 01-27-2019, 05:51 PM   #73
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That is funny. The T Rowe Price Future Path tool puts us at 98% with or without more stocks, And- we have no pensions.
Future path says we should draw down $17.6K in income per month. We don't need that level of income even with ambitious travel plans. And Future Path does not include my wife's Social Security retirement income at age 70

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What is TSP?
TSP is the Federal Government's 401K type plan for Federal employees: Thrift Savings Plan. It is also now open to our nation's military service members.


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There are CPA firms that do holistic financial planning. They coordinate and work with estate attorneys. They most certainly can help with a SS strategy and a strategy to withdraw funds to live on that are the most tax advantaged. They can tell us how much we can safely withdraw.They can also give some insight into our relocation dilemma and what we can afford to pay for another home.
I don't deny that there are CPA firms that purport to do what you say they do. My estate planning lawyer works with one as well, but typically I haven't found them very talented even on issues like stretching out Roths for legacy planning. Perhaps, you'll find one of them they covers everything you desire. I really don't think these purported holistic CPAs or CFPs have a better handle on SS strategy than those who post on Bogeheads and no one can really match the detailed analysis that is sometimes provided by people who post there like the person with the screen name #Cruncher on Bogelheads.

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We actually might try to sell our home ourselves since it has not appreciated in 31 years and paying the real estate commission will make things worse for us. Of course, we would have an atty.
Not sure I'd agree with that approach. I was once a licensed real estate agent for two years and my wife and I practiced law for over 70 combined years (with wife having dabbled in real estate transactions as well). We've always used real estate agents but we've always been successful in negotiating reduced real estate commission rates.


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My spouse also is not into the finances and neither is our son, so another reason to have some professional help and maybe someday to manage our investments also.


I have always been a do it yourselfer but I am becoming overwhelmed and it would be nice to just have someone pull it l together for us. I do our taxes and I do our son's taxes.



I would like to have a life and have everything more or less on autopilot. I just need a plan and some help and then can take off from there.
I think you can put the investments on auto-pilot as well as your draw downs. Make life easier for you by doing a 3 Fund Portfolio, recommended on the Bogelheads forum.
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Old 01-27-2019, 06:10 PM   #74
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My DD and her husband are both CPAs with young children BUT he has a health condition that will shorten his lifespan. They also have interests in businesses that are not yet publicly traded. Their situation is complex so they consult with an expert. They found this expert through recommendations of their peers.

IMHO they should first find an attorney who is a specialist in elder law and estate planning to assure that they have the paperwork they need such as a revocable living trust, wills, POA healthcare and the like. Make a list of all your assets, how they are titled and if there are beneficiaries specified. Find that attorney by word of mouth in your community. If you plan to move to another state make sure that attorney is familiar with that state's inheritance laws.

Ask that attorney for a referral to a FEE-based FA, ask that attorney why they think each on their recommended list would be good. The OP, and spouse, should meet with a FEE FA at least once so that they can put together a to-do list to assure that they are prepared for retirement.

Keep your investment plan simple and in no-load low fee funds.

Always ask the attorney and the FA "why do you recommend that". Before you act always understand the reason and in the case of the FA know if they are taking a bite out of the investments they recommend.
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Old 01-28-2019, 06:33 AM   #75
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I would go with an hourly or a fee for service type FP if you are inclined to seek "professional" direction. The previous chart by OldShooter in post #40 is pretty telling IMO. What is missing in that post is when the market takes a loss of, say 20% of a 1,000,000 investment, you loose $200,000 (understandable) and still have to pay the FA an additional $10,000.

I used to think that people use FA's because they are insecure in their ability to manage their finances. I recently have changed my opinion to people somehow wanting someone to blame when things go South. It is a lot easier for someone to accept that "he" lost my $210,000 instead of admitting that "I" made a mistake that made me lose $200,000. Right or wrong.

Yes. That is why I am turned off by the high advisory fees as a percentage of assets.



Also- though- if you lose $200,000 out of 1 million in a market correction, then wouldn't the advisory fee be less since it is based on a percentage of assets?
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Old 01-28-2019, 07:09 AM   #76
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Yes. That is why I am turned off by the high advisory fees as a percentage of assets.



Also- though- if you lose $200,000 out of 1 million in a market correction, then wouldn't the advisory fee be less since it is based on a percentage of assets?
Not having a FA, I don't know. I suppose it could be paid either in advance or arrears. If arrears, it could be based on a daily average or final balance. It might be something to ask.
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Old 01-28-2019, 10:06 AM   #77
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.. We actually might try to sell our home ourselves since it has not appreciated in 31 years and paying the real estate commission will make things worse for us. ... .
Be a little careful with this line of thinking. Whether or not the house has appreciated is completely irrelevant to a sale decision. If, looking forward, FSBO is the right answer that's fine. But if it's not, the value of the history of the house should not affect a decision to do something else. This is a slight variation on the "sunk cost fallacy." https://en.wikipedia.org/wiki/Sunk_cost

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... Also- though- if you lose $200,000 out of 1 million in a market correction, then wouldn't the advisory fee be less since it is based on a percentage of assets?
Yes, of course. Some FA's have a stepped price schedule, though, so your total fee as a percentage might rise a tiny amount.

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Not having a FA, I don't know. I suppose it could be paid either in advance or arrears. If arrears, it could be based on a daily average or final balance. It might be something to ask.
I regularly see statements from a couple of FAs. Both charge their fees monthly. I assume they are calculated either on the average account balance for the month or on the month-ending balance. I have never checked however.
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Old 01-28-2019, 10:09 AM   #78
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we used a fee only FP from a teferral from our trust atty and that's the only type i would ever recommend. ref ric edelman..initially i was a fan until he started preaching carrying a huge mortgage to use the funds to invest. bad, no, horrible idea. unnecessary risk.
Huge mortgage, more $ to invest, means his % of your investments is larger.
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Old 01-28-2019, 04:57 PM   #79
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These last few posts (and perhaps others) appear to use the term and role of Financial Advisor as synomous or inter-changeable with the work done by a Certified Financial Planner, the latter which I think the OP was seeking.

Anyone can hold themselves out as a "Financial Advisor." I don't believe there are any licensing or certification requirements to be a Financial Advisor. Most of these Financial Advisors are Registered Representatives of Brokerage Houses or firms that sell securities to the public; in other words, these are stock brokers or account executives who might be required to pass certain exams to sell securities as required by FINRA or to sell insurance as required by other regulators. And some of these Financial Advisors are "investment advisors" who can sell securities to qualified clients. When they manage an investment portfolio you might have, including 401K or IRA retirement accounts, they do not have to meet fiduciary standards of care in managing your accounts (of course, this is a major topic in and of itself). The conventional method of compensation for their services is a percentage of the Assets Under Management you have with them -- could be 150, 100, or 75 basis points. And they might get sales commissions for the particular financial products they might sell to their clients.

On the other hand, Certified Financial Planners (CFPs) are subject to specific educational, examination and certification requirements. https://www.cfp.net/
CFPs can be registered representatives at brokerage houses, can operate independently of brokerage or traditional wired houses, or have their own wealth management operations or investment advisor credentials with FINRA. They can also provide these services under an AUM compensation arrangement and sell securities as well to their clients. A number of CFPs can also operate solely as financial planners to clients under a fee-based services compensation arrangement where the client pays typically an hourly rate for a menu of services that the CFP provides. The CFPs in perhaps all cases are subject to the fiduciary standard of care when managing your investments or financial affairs.

In any case, the FAs or the CFPs don't have the secret sauce for Social Security or Medicare/Health Insurance issues, which appeared to be a concern of the OP. They are dipping from the same well of financial information that all of us have at our disposal for Government benefit programs.

Hope this clariies things a bit.
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Old 01-28-2019, 05:32 PM   #80
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... Certified Financial Planners (CFPs) are subject to specific educational, examination and certification requirements. https://www.cfp.net/ ... The CFPs in perhaps all cases are subject to the fiduciary standard of care when managing your investments or financial affairs. ...
A little more clarification:

The CFP designation is a product sold by a private corporation. It has no legal standing, although it is certainly a credential with some value. Anyone with a college degree (mortuary science, finance, accounting, English lit, etc.) can take the training and take the test. 4,000 hours of experience are required but this is a loose requirement. I have read of a financial journalist being offered credit for his "experience." There is a moral hazard here; the corporation selling the certificates is a nonprofit but the president takes home over $1M/year. So he is clearly motivated to maximize the number of CFPs paying hundreds of bucks each year to keep the designation. How this interplays with the quality of the CFP designation process is anyone's guess.

The popular idea that all CFPs are fiduciaries is simply false. As @ChrisC implies, many CFPs are fiduciaries by virtue of Series 65 or Series 66 examinations or by being "Investment Advisor Representatives" of a fiduciary registered advisor company. CFP's operate under "Rules of Conduct" that omit the fiduciary duty of "loyalty" to his/her client. This allows them to work as Series 7 "Registered Representatives" whose loyalty is to their employer. The Rules of Conduct also state: “ … the Rules are not designed to be a basis for legal liability to any third party. “ So .. literally no consumer protection there.

This fall the Rules are being changed and will look much more like the rules for fiduciaries. But in the end they are not legally binding. A CFP who violates the Rules is simply risking his CFP certificate.

So, IMO the CFP certificate is a worthwhile thing to look for when interviewing CFPs but it is important to understand what it is and what it isn't.

As always, https://brokercheck.finra.org/ should be the first stop, CFP or not. It is FINRA that has the teeth.
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