What is a Certified Financial Planner? An Interview with Ciaran McKeever

I have a secret desire to be a professional financial planner one day (well, now it’s not so secret anymore). Of course, this would take me in a completely direction from my current career. Because of this desire, I jumped at the chance to interview Ciaran McKeever of Chance Favors who is a Certified Financial Planner.

If you want to know what it’s like to be a Certified Financial Planner, here it is:

Could you tell us a little about yourself?

Ciaran McKeeverI was born and raised in Douglaston, N.Y. I live about 1 mile away from my childhood home.

I’ve traveled quite extensively, mostly playing tennis over seas for 2 1/2 years on and off after college, 3 of the best years of my life. I was bit with the ‘love of travel’ bug and have traveled to many cool places including, Iceland, Sweden, China, New Zealand, Australia, Estonia, Vancouver to name a few, all on separate occasions.

In 2005 made it to midnight of Day 3 in the main event in the World Series of Poker and have a great story about being knocked out, save that one for a post.

Been in finance for 13 yrs + love it most of the time, and have hated it at other times. If you want to know more about me, feel free to visit my About page, it has a lot there.

What motivated you to begin blogging and how long have you been doing it?

I was motivated to help people my own age to get their financial futures sorted out. Originally, my blog was geared towards my friends, many of whom have good jobs, 401K’s, individual retirement plans, brokerage accounts; but, at the same time, they had very little idea how to tie it all in and make the appropriate plans for the future and efficiently manage their assets.

For years I’ve seen the positive effects of financial planning on clients, I so want to bring a hybrid version of that to people my age, something I call informal financial planning or ‘Down Home’ planning (more or less something that can be self administered). It’s on my mind everyday and I’m working hard to bring it to my blog; not there yet, as of this writing.

I’m extremely motivated to fill the sizable void when it comes to GenX financial issues; and the larger goal is to help change the perception of the advisory business by proving to people that there are honest caring, knowledgeable, affordable qualified advisors that you can trust to help you (if, of course, you need the help). More on that sometime in the future.

Been blogging for nearly 7 months now. Almost quit in September because of the inability to overcome massive technical difficulties, if you go to my Archives for September you’ll see the big drop off.

These days I’ve found my sea legs and am understanding more and more about blogging and how much work I have to do.

Pinyo’s note: Ciaran understands so much more that he even wrote a post for ProBlogger.

Could you tell us a little about being a Certified Financial Planner?

You actually have to pass 6 tests before you can qualify to sit for the Board exam. I actually took the first of those tests in 2001 and passed the last one in 2005. For some reason I decided not to take the actual CFP certification test until March of 2007, 2 years later. I passed. :-)

I think I waited because I felt like I knew what I was doing and I didn’t see the benefits of a piece of paper. I haven’t seen much benefit (at least in the form of tangible evidence) in having the CFP behind my name at all actually. A few people like yourself understand how hard it is to get those credentials and what they stand for, but the public for the most part, have no idea what it is.

I put some of the blame on the CFP Board for poorly marketing the designation, although they have recently moved to Washington D.C. and I hope things will change for the better. But for now, ask the average person what a CPA is and many know, ask the average person what a CFP is and nobody knows. Do a Google search for CPA and CFP and see the difference in listings and resources. Although, that’s probably not a fair comparison [on my part], I feel at the end of the day more has to be done to get the word out.

Actually, I don’t know either; please tell me difference between CPA and CFP?

One is a Certified Public Accountant, specializing in accounting. One is a Certified Financial Planner, specializing in financial planning. Both certified as professionals in their respective fields. Although, there is a fair bit of overlap, the bulk of your time is spent dealing with issues specific to your core skills set. For CPA’s that means tax, for financial planners that means investment management.

What’s the minimum investment requirement for someone to offer financial advice professionally?

That varies tremendously. Fee-only planners will probably take on most anyone, as long as their hourly rates are met. The simpler cases can be resolved fairly quickly; I imagine the more complex cases will resemble the billable hours a law firm would charge.

Your question refers more to fee based planners. Many financial planners (esp. CFP’s) often designate a minimum client asset base just to say Boo. Generally speaking, the numbers I usually hear bandied around are $100K-$250K on the low end, up to $1 million on the high end, in order for it to be worth it for everyone involved.

Here’s the conventional wisdom today: Clients often need to have fairly complex issues or a significant asset base to justify the time, expertise and cost of a CFP, understand, that’s the financial advisor’s mentality not the client’s! I talk about it more in this post, “Here’s the Rub” from back when I started blogging, much of what I’m trying to accomplish with my blog is to bridge this gap.

Click the links mentioned because there’s much more detail about the questions asked.

What is the minimum amount of credentials needed to present yourself as a professional advisor to the public?

That’s a good question and I’m not really sure to be honest. That’s one of the topics you see in the first few chapters of the books you use to study for exams, but never see a question about.

I’m going to have to get back to you on that.

Could you walk me through a day of your life as a CFP?

I’ll walk you through a day in the life, I’m not sure being a CFP has much to do with my day. :-)

I get up early, do some reading, usually at RealMoney.com, flip on the TV, watch a little CNBC, Sportscenter, not much usually, then I address any client issues if there are any, usually there are not. I spend about 2 hours going through client accounts after that.

These days I only have a small group of loyal clients for whom I manage assets and run the full gamut on financial planning. I’m close with all of them and they can pretty much reach me or speak to me whenever they want. I spend quite a bit of the rest of my day reading, blogging, researching, updating my blog, preparing for future posts and building my presence on StumbleUpon, soon Twitter and LinkedIn.

I do a tremendous amount of reading (about 6-8 hours+ a day), almost all online, although I read some industry publications including The Investment News, The Ledger and WSJ. I read Time magazine each week and Business 2.0 was my favorite magazine until they recently pulled the plug (sadly).

I try and get to the gym for a run at some point. Also play tennis and try and do yoga once a week. Eat dinner and lunch once or twice a week with ‘the rentals.’ Oh, that’s short for parentals or parents :-) My parents are a bit older than the parents of most people my age and I enjoy spending a lot of time with them.

So nothing too exciting, I try and keep things balanced, something I’ve struggled with over the last few months, but am getting better at.

Could you walk me through the steps needed to become a CFP?

For me it was six tests through The American College (a CFP accredited program). Once you’ve passed the 6 individual tests they allow you to sit for the certification exam. I have a friend who just went through it and it was a little different for him. At the end of the day, you have to take that monster of a certification exam and it’s comprehensive and extremely tough. It’s a 2 day (all day) exam that leaves you physically exhausted. They send you the results 6-8 weeks later.

What are your areas of expertise?

The basis for all my client relationships is a financial plan, which I’ve written about quite frequently on my blog. The consistent theme with all my clients is they all have investable assets, so to answer your question, on a day to day basis I have the most experience with asset management.

But I approach each new financial plan as if it were a blank canvas, the paint to be applied in so many different ways. As a financial planner, sometimes you’re faced with heavy estate issues and learn to deal with those, working closely with estate lawyers. Sometimes the problems are insurance (e.g., disability, long-term care, life, home, etc.) or real estate related and you learn to deal with that. Sometimes it’s tax, business succession or education related and you learn to deal with that.

You have to have a good working knowledge of all these fields, that’s really what differentiates a CFP from a stock broker or most financial advisors. In the real world, I can go a long time without dealing with certain client issues and then have one come up again. Well, I have to go back and reacquaint myself with the material.

I’m not scared to tell someone I don’t know the answer to that question, because some times I don’t know or I can’t remember. I’ll say let me go do some research and I’ll get back to you with the appropriate response, much like a doctor or lawyer when presented with a new set of circumstances.

I may not have all the answers but I usually have no problem conceptualizing the issues, that’s what the CFP signifies if you ask me, it lets you know which advisors have a deeper understanding of the broader issues that you must be able to apply to client situations.

What are your favorite personal finance books?

Have never read a personal finance book. I’ve been reading the personal finance blogs in my blogroll and have learned heaps in the last 7 months, which is obvious by much of what I StumbleUpon.

I’ve been given a few recommendations, one of which was Dave Ramsey’s The Total Money Makeover, whose name pops up everywhere. The last 3 books I’ve read in the field of finance, other than the CFP books, were all written between 1926-1931.

I did a tremendous amount of personal trading back in 2003-2006 and read a lot of trading books, but the best 3 books I ever read on the subject were published over 75 years ago.

They had the most candid accounts of how markets really work and you would have thought they were written last year, if it weren’t for the stock names and lower trade volume representations; absolutely fascinating books if you ever wanted to trade and know how markets really work.

What posts on your blog should all visitors read?

Here are 3 posts to get you started:

  • My Two Cents on “12 Investing Mistakes and How You Can Learn From Them”
  • Interested in the Equivalent of a Tax Free Loan in 2010?
  • 5 Easy Ways To Apply Frugality to Your Investment Decisions

Thank you Ciaran for sharing your story candidly

Thanks for the interview Pinyo. I appreciate the time you took out of your busy schedule to do this. All the best!

About the Author

By , on Feb 12, 2008
Pinyo
Pinyo is the owner of Moolanomy Personal Finance. He is a licensed Realtor specializing in residential homes in the Northern Virginia area. Over the past 20 years, Pinyo has enjoyed a diverse career as an investor, entrepreneur, business executive, educator, and financial literacy author.

Leave Your Comment (12 Comments)

  1. Paul says:

    @Adfecto – I’ve known at least two engineers who made the change from engineering to financial planning. Engineers can make great planners because of their attention to detail (though they can get bogged down with that sometimes).

    @savvy – There is no way around the CFP experience requirement. As far as doing it while you’re still employed as an engineer, you can consider doing pro-bono work or starting your own firm on a part-time basis. However, keep in mind that the experience requirement is based on 40 hours a week/2000 hours a year as 1 year of experience. If you do less than that, it will be prorated. When you factor this in with the rule that says you have to meet your experience requirement within 5 years of passing the CFP exam, it can be difficult to meet the experience requirement if you’re working full time in another capacity. You can get 3 months of experience if you participate in the FPA’s Residency Program (a two week program, I think).

    Although it would probably mean a pay cut, you might be better off looking for a paraplanner position while you gain your experience. This way you’ll have an experienced mentor while you’re still learning and you’ll avoid costly mistakes that might occur if you go out on your own while you’re still fresh.

    I’ve passed the CFP exam and I’m still working on my experience requirement. I’ve worked with two firms, and I’ve learned a lot. You’ll still have a lot to learn beside the CFP education stuff…compliance, custodians, running a business, required paperwork, etc. I’m getting there and hope to open my own firm in a year or two.

    Good luck to both of you, and to Pinyo!

  2. Jonathan says:

    Becoming a certified financial planner is very hardwork, I know this from a friend who has just reached this level of professional qualification. All respect.

  3. FIRE Finance says:

    Fantastic post. We cited it in our Sunday Review as one of our favorites.
    Keep up the excellent blogging.
    Cheers,
    FIRE Finance

  4. Pinyo says:

    @Cairan – No problem. Thank you for your time and information.

    @Minimum Wage – Sounds like a remake of The Pursuit of Happyness in the making

    @Dan – Thank you for the added info.

    @Adfecto and Savvy – Now we all want to become CFP :-)

  5. savvy says:

    Great post. Like the commenter above me (Adfecto), I have a BS and MS in engineering but am interested in financial planning. I actually just started the CFP coursework. Any advice on how to get the required work experience to actually become certified without quitting my full-time job just yet?

  6. Adfecto says:

    Nice post. I’ve considering getting the CFP designation. I’ve already sunk a BA and MS into engineering and it has its benefits, but I would love to be a fee only planner. It would would be an entirely new career that I my launch in Life – Phase II.

  7. Minimum Wage says:

    How much do the exams cost? I am one of those annoying people who can ace tests with little work, but I always have financial issues.

  8. Ciaran says:

    Hey Dan, Good to see you around:) That’s a very good article on your site.

    I think if you take the two articles (his and mine), you’re pretty much covering your bases. I touched a little on becoming an IA (investment advisor) in my post, he goes into a lot more detail.

    In my post, I spoke more to becoming a registered rep. with FINRA, FINRA has over 660,000 reps in their database; IA’s are not required to be registered with FINRA since they register with their state (Texas in Dan’s case) or the SEC – who you need to register with as an IA all depends upon the $$$ assets you have under management.

  9. Glen Craig says:

    Great article. Thank you! I’ve been interested in becoming a financial planner as well. I’m going next to check out MR. McKeever’s site!

  10. Dan says:

    “What is the minimum amount of credentials needed to present yourself as a professional advisor to the public?”

    I have found in my research that if you want to charge for financial advice, you must register with your state or the SEC (if you manage a lot of money) as an investment advisor. For that, you need to take the NASAA Series 65 exam or the Series 7 and 66. In Ciaran’s case, his CFP exams exempt him from the Series 66. As he mentions, a CFP is not needed to be a financial planner. In fact, you must be a planner for 3 years and spend ~$5,000 on courses and exams before you can call yourself a CFP. You can present yourself as a professional advisor with much less jumping through hoops, though hopefully you have studied up on the CFP curriculum to make sure you give balanced advice.

    In Texas, once I pass the Series 65 and register with the state as an investment advisor, I can start charging for financial planning and other advice (I currently don’t plan to do so). Other states may have different rules.

  11. Ciaran says:

    The exam cost just under $700 last March. With the books and classes it can run you. I know of people that took prep classes that ran into the several thousands of dollars.

    But if you can ace tests, then you won’t be looking for additional help. The books will cost you a few hundred dollars, if you pass the exam it costs another $400 in dues that go to the CFP board.

  12. Ciaran says:

    Thanks for the interview Pinyo. Not exactly an all-nighter but not a lot of sleep either;) I hope my post answered that last question for you.

    regards

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