The Certified Financial Planner Board of Standards last month said it's amending its regulations to shorten the time needed to qualify for CFP certification from three years to two if the person has two years of experience providing professional financial planning service or the part-time equivalent.
The individual has to have been working under the direct supervision of a CFP professional, been providing direct financial planning services to clients and must have documented in writing the performance of all six steps of the financial planning process.
Currently, a candidate can apply for CFP status only after three years if he or she has met experience requirements that can include teaching or internships. These criteria still apply, and a candidate can use them to fulfill the three-year requirement and gain certification.
Under the new rules, the candidate would still have to complete a course of study for financial planning and pass the CFP exam, pass a background check and agree to the CFP Board's code of ethics and professional responsibility, rules of conduct and financial planning practice standards. But applicants will also be able to meet the experience requirements before they pursue the education and examination requirements.
The new experience requirement will go into effect September 1, 2012.
The board reviews its regulations periodically and updates those it feels need changing, says Alan Goldfarb, the chairman of the board of directors.
Another change under the new rules is that CFP candidates and those already holding CFP certificates will be treated equally when it comes to bankruptcy filings. Currently, a CFP candidate who has filed for bankruptcy is required to wait five years before applying for certification. Under the new rules, the candidate can pursue certification, and the bankruptcy information will be made public as it is for CFP designees.
All bankruptcy filings will be made public on the CFP Web site, and a news release will be issued four times a year listing the names of those CFP professionals who have filed.
Under the current regulations, the Board of Standards does not make a CFP's bankruptcy filings public if there is no related public action against the practitioner.
"We want to disclose any information that could reasonably be expected to affect a person's decision about hiring a financial planner," says Michael Shaw, the managing director of the CFP Board's professional standards and legal department.