Professional Designations

What is a Chartered Financial Consultant (ChFC)?

By  Brian Thorp

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The Chartered Financial Consultant (ChFC) designation has been around since 1982. Awarded by the American College of Financial Services in Bryn Mawr, Pennsylvania, it’s similar to the Certified Financial Planner (CFP). 

The primary difference between the ChFC and CFP, however, is that the ChFC requires a more extensive education and certification process. To date, there are more than 40,000 professionals who have earned this prestigious title. 

Let’s take a closer look at what this financial certification is, what it takes to earn it, and how you may benefit from working with a ChFC. 

What is a Chartered Financial Consultant (ChFC)?

The ChFC is available to any financial professional who wishes to help clients with complex situations. It may be a good option for bankers, realtors, stockbrokers, accountants, insurance agents, and others who work in the financial space. 

Those who pursue the ChFC will be required to complete an education component, which consists of eight college-level courses.These courses include similar topics to the ones found in CFP education such as retirement, insurance, taxation, and investing.

All courses are available online in a self-paced format. While there is no comprehensive exam that covers all eight courses, ChFC candidates will have to pass an individual exam at the end of each course. In addition, they must adhere to The American College’s Code of Ethics, which includes this pledge: 

“I shall, in light of all conditions surrounding those I serve, which I shall make every conscientious effort to ascertain and understand, render that service which, in the same circumstances, I would apply to myself.”

Should You Hire a ChFC?

A ChFC has the expertise and depth of financial knowledge that may help you if you:

  • Would Like Tax Planning Support for Your Business: As a business owner, there are many financial topics you need to understand, especially when it comes to taxes. Whether you’re an LLC, partnership, corporation, or proprietorship, a ChFC can help you with various tax income strategies. These include tax credits, deductions, capital gains and losses, annuities, and more. 
  • Have a Unique Family Situation: If you have a non-traditional family, it’s highly likely that you’re in need of specialized financial advice. A ChFC may be a great resource if you’ve gone through a divorce, have a special needs child, are in a LGBTQ relationship, or in a blended family. 
  • Hope to Make the Most Out of Your Investments: If you’re a high net worth investor or have a large portfolio, a ChFC can support your investment plan so you can maximize your income. They can guide you through investment strategies that relate to diversification, portfolio management, tax issues and securities markets. If you’re unsure of which retirement strategy is right for you, they may also assist you in choosing a SEP IRA, Roth IRA, nonqualified deferred compensation, etc. 
  • Wish to Prepare for Major Financial Milestones: Whether you’d like to retire early, fund your child’s college, pass on an estate or anything else, a ChFC can support you with your major milestones. They may give you some much needed peace of mind that you’re on track to meet them.

What Does it Take to Earn and Maintain the ChFC?

Those who hope to earn a ChFC designation must fulfill certain requirements set forth by the   American College of Financial Services. Here’s a brief overview of what that they are.

Education

Before financial professionals sit for the ChFC, they must complete a series of eight courses. These are delivered via the new Personal Pathway™ model, which allows for optimal structure and flexibility. Even though it’s designed to be a 14-week learning path, ChFC candidates can choose to complete their coursework sooner. 

Each course offers a variety of learning methods including webinars, discussion boards, multimedia lessons, and reading from digital textbooks. There is also a preparatory quiz that prepares candidates for the final exam at the end of each course. 

Despite the fact the curriculum for the ChFC has been recently reduced, it still requires more coursework than any other major financial planning designation including the CFP. Fortunately, those who hold other designations like the CFP may earn credits for any coursework they’ve already completed. 

Experience

Financial professionals with at least three years of relevant work experience within the previous five years may take the ChFC. This work experience may be in the fields of financial services, employee benefits, insurance, and healthcare. 

Exam

As stated, there is no comprehensive exam. Instead, ChFC candidates take a proctored exam at the end of each course. Eight exams are distributed on the following topics: 

  • Financial Planning: Process and Environment
  • Fundamentals of Insurance Planning
  • Income Taxation
  • Planning for Retirement Needs
  • Investments
  • Fundamentals of Estate Planning
  • Personal Financial Planning: Comp. Case Analysis
  • Contemporary Applications in Financial Planning

Continuing Education

Once a financial professional earns the ChFC designation, they are required to continue their education. This requires them to maintain at least 30 continued education credits every two years. A renewal fee must be paid as well. 

Disclaimer: The information in this article is not intended to encourage any lifestyle changes without careful consideration and consultation with a qualified professional. This article is for reference purposes only, is generic in nature, is not intended as individual advice and is not financial or legal advice.

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