In order to avoid these types of awkward situations, it is important to ensure that you have equipped yourself to recognize many situations and guide your clients through them correctly. By increasing your knowledge, your credibility and your income will benefit. In this article we'll examine three different designations that will allow you to gain the knowledge you need to handle almost any client's situation: the Certified Financial Planner® (CFP®), Chartered Life Underwriter® (CLU®) and Chartered Financial Consultant® (ChFC®).
CFP® - The Media's Choice
The CFP® mark is offered - and governed - by the Certified Financial Planner® Board of Standards in
The CFP® curriculum contains five core courses that cover the following planning topics:
- Investment planning
- Insurance planning
- Estate planning
- Tax planning
- Retirement planning
- Education planning
- Ethics and the financial planning process
Chartered Life Underwriter® - The Oldest Designation
The CLU® is widely considered to be the most respected insurance designation in the industry. This designation was created in 1927 by the
The current course curriculum for the CLU® includes five required courses plus three elective courses. The required courses include the following:
- Fundamentals of Insurance Planning
- Life Insurance Law
- Individual Life Insurance
- Fundamentals of Estate Planning
- Planning for Business Owners and Professionals
- Financial Planning: Process and Environment
- Individual Health Insurance
- Income Taxation
- Group Benefits
- Planning for Retirement Needs
- Investments
- Estate Planning Applications
The Chartered Financial Consultant® (ChFC®) credential was introduced in 1982 as an alternative to the CFP® mark. This designation has the same core curriculum as the CFP® designation, plus two or three additional elective courses that focus on various areas of personal financial planning. The biggest difference is that it does not require candidates to pass a comprehensive board exam, as with the CFP®.
Due to the number of courses that overlap both the ChFC® and CFP®, the ChFC® and CLU marks are often taken by individuals seeking in-depth knowledge of both financial planning and insurance, but who wish to avoid a lengthy board exam.
Which Is Best? The answer to this question lies in your preferred area of focus. If you would like to focus more exclusively on life insurance, then the CLU® designation will provide the most complete curriculum for you. If you would rather focus on
comprehensive financial planning, then one of the other two credentials will be a better fit.
It should be noted that none of these designations are considered to be inherently superior to the others. The CFP® designation requires less coursework but forces its students to learn the material in a way that allows them to proactively apply it in the board exam. The CLU® and ChFC® credentials require more coursework but have no comprehensive exam. The following chart can help you understand the differences and similarities between the three designations.
-- | CLU® | CFP® | ChFC® |
Comprehensive Board Exam | No | Yes | No |
Number of courses required | 8 | 5 | 8 |
Focus of Study | Life Insurance, both personal and business | Comprehensive financial planning | Comprehensive financial planning |
The Bottom Line
Agents and brokers that decide to earn one of these designations will soon discover that some of the same coursework is required regardless of which designation is chosen. Those who desire to obtain only one of these credentials will need to personally evaluate the courses that are required for each and their relevance to their specific areas of practice.
Original story - CFP, CLU Or ChFC - Which Is Best?
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