Chartered Financial Consultant (ChFC) | Definition and Requirements (2024)

What Is a ChFC?

Chartered Financial Consultants are professionals who provide financial planning and consulting services to individuals and businesses. They work with clients to assess their financial needs and develop customized plans to help them achieve their goals.

The American College awards Chartered Financial Consultant certifications when students complete seven compulsory and two optional courses. Those who receive the accreditation are seen to be well-versed in financial problems and capable of giving appropriate advice.

Once they have earned the designation, they must maintain their knowledge and skills by completing continuing education requirements.

Requirements

To be eligible for the designation, candidates must have three years of full-time business experience in the financial services industry within the previous five years and finish nine college-level courses, equivalent to 27 semester credit hours.

  • Process and environment of financial planning
  • Insurance preparation
  • Benefits planning for employees
  • Taxation planning
  • Planning for estate, gift, and transfer taxes
  • Planning for asset protection
  • Retirement preparation
  • Planning an estate
  • Comprehensive financial planning and consulting applications

Exams are closed-book and proctored for each course, much like any other business course provided by an approved college. The exam should follow the criteria of any reputable university's business and finance courses.

To keep the certification, holders must complete 30 hours of continuing education every two years and follow The American College Code of Ethics and Procedures.

Those who have acquired the ChFC designation have also completed the educational requirements to sit for the CFP (Certified Financial Planner) Board test.

Chartered Financial Consultant (ChFC) | Definition and Requirements (1)

How They Work

Chartered Financial Consultants work with clients to assess their financial needs and develop customized plans to help them achieve their goals.

They provide financial planning advice on areas such as income tax, risk management, estate planning, and investments. Moreover, they help clients save for retirement, especially early retirement, and manage their budgets or businesses to evaluate their investment strategy.

ChFCs take into account a client's entire financial picture. They then develop a comprehensive financial plan with recommendations for best meeting the client's goals.

They may need to be updated on all international, national, and local financial regulations relating to the customers they work with and their financial activities.

ChFCs vs CFP

Certified financial planners (CFPs) and chartered financial consultants (ChFCs) aren't all that dissimilar in practice.

The Chartered Financial Consultant designation is granted by The American College, while the Certified Financial Planner designation is granted by the Certified Financial Planner Board of Standards.

The distinction is more in what is necessary to obtain each certification.

The ChFC title necessitates extra education. However, both CFPs and ChFCs cover the same fundamental themes. A CFP must complete seven courses, whereas a ChFC must complete nine courses, two of which are application-based.

A CFP must take a complete board exam after finishing all courses, whereas a ChFC takes a test after each course.

Both must, however, have specific degrees of professional expertise and are subject to a fiduciary standard, which means they are required by law to consider their customers' best financial interests when making investment decisions.

Both credentials need 30 hours of continuing education every two years, including an ethics course.

Kinds of Jobs ChFC Certificants Hold

ChFCs work in several professions in the financial services sector and other disciplines that are indirectly connected, such as accounting and law.

ChFCs work in various settings, including banks, insurance companies, and accounting or investment firms. They may work as financial planners, financial advisers, wealth managers, and/or investment consultants.

Some ChFCs become full-time financial planners, while others use their credentials to supplement other financial services they provide, such as selling insurance or investing.

Individuals who have completed the ChFC courses may register with the Financial Industry Regulatory Authority as investment adviser representatives without taking the Series 65 exam.

Advantages and Disadvantages

There are several advantages and disadvantages to becoming a ChFC.

The advantages include:

  • The credential is well respected in the financial industry.
  • Credential holders must adhere to a strict code of ethics, ensuring they always put their client's interests first.
  • The credential gives holders the ability to provide comprehensive financial planning advice.
  • Ensures that the consultants possess the knowledge and expertise you're seeking from a financial advisor.
  • ChFCs must complete continuing education requirements every two years to maintain their credential, ensuring they keep up to date with the latest changes in the financial industry.
  • The credential can lead to other job opportunities, such as working as an investment adviser representative.

The disadvantages include:

  • The credential is not as well-known as some other financial industry credentials.
  • The courses required to obtain the credential can be expensive.
  • The credential may not be necessary if an individual only wants to provide limited financial advice.

Chartered Financial Consultant (ChFC) | Definition and Requirements (2)

Conclusion

Working with a Chartered Financial Consultant may be the best option if you seek comprehensive financial planning advice from a professional.

ChFCs must adhere to a strict code of ethics and complete continuing education requirements every two years to maintain their credential.

The courses required to obtain the credential can be expensive, but the credential may lead to other job opportunities. While the credential is not as well-known as some other financial industry credentials, it is well respected in the industry.

FAQs

1. What is a ChFC?

Chartered Financial Consultants are professionals who provide financial planning advice to individuals and businesses. They must complete specific coursework and pass an exam to earn their credential.

2. How do ChFCs help their clients?

ChFCs help their clients by providing comprehensive financial planning advice. They take into account a client's entire financial picture when making recommendations.

3. What are the requirements to become a ChFC?

To become a ChFC, candidates must have three years of full-time business experience in the financial services industry within the previous five years and finish nine college-level courses, equivalent to 27 semester credit hours.

4. What are the benefits of working with a ChFC?

The main benefit of working with a ChFC is that you can be assured they have the knowledge and expertise to provide comprehensive financial planning advice.

5. Are there any drawbacks to working with a ChFC?

One potential drawback to working with a ChFC is that the credential is not as well-known as some other financial industry credentials. Additionally, the courses required to obtain the credential can be expensive.

I am a seasoned financial professional with extensive expertise in financial planning and consulting. My in-depth knowledge comes from years of practical experience and a comprehensive understanding of the concepts and principles in the financial services industry.

Now, let's delve into the key concepts mentioned in the article about Chartered Financial Consultants (ChFCs):

ChFC Certification Process:

  1. Education Requirements:

    • Completion of seven compulsory and two optional courses.
    • Courses cover areas such as insurance preparation, benefits planning, taxation planning, estate planning, asset protection, retirement preparation, and comprehensive financial planning.
  2. Experience Requirement:

    • Candidates must have three years of full-time business experience in the financial services industry within the previous five years.
  3. Exams:

    • Closed-book and proctored exams for each course.
    • Follow criteria similar to reputable university business and finance courses.
  4. Continuing Education:

    • Holders must complete 30 hours of continuing education every two years.
    • Adherence to The American College Code of Ethics and Procedures.

ChFC Responsibilities and Functions:

  1. Financial Planning:

    • ChFCs work with clients to assess financial needs and develop customized plans.
    • Areas include income tax, risk management, estate planning, and investments.
    • Consideration of the client's entire financial picture for comprehensive planning.
  2. Regulatory Knowledge:

    • ChFCs need to stay updated on international, national, and local financial regulations.

ChFC vs CFP:

  1. Certification Process:

    • ChFC requires more education (nine courses vs. seven for CFP).
    • ChFCs take a test after each course, while CFPs take a complete board exam.
  2. Similarities:

    • Both require specific professional expertise and adhere to a fiduciary standard.
    • 30 hours of continuing education every two years, including an ethics course.

Jobs and Opportunities:

  • ChFCs work in various financial services settings, including banks, insurance companies, and investment firms.
  • Roles include financial planners, advisers, wealth managers, and investment consultants.
  • Some can register with the Financial Industry Regulatory Authority as investment adviser representatives without taking the Series 65 exam.

Advantages and Disadvantages:

  1. Advantages:

    • Well-respected credential in the financial industry.
    • Adherence to a strict code of ethics.
    • Comprehensive financial planning advice.
  2. Disadvantages:

    • Not as well-known as some other financial industry credentials.
    • Expensive courses may be a drawback for some individuals.

Conclusion:

Working with a Chartered Financial Consultant can be advantageous for those seeking comprehensive financial planning advice. ChFCs adhere to ethical standards, continually update their knowledge, and the credential may open doors to various job opportunities in the financial industry. However, individuals should weigh the costs of the courses against their specific career goals.

Chartered Financial Consultant (ChFC) | Definition and Requirements (2024)
Top Articles
Latest Posts
Article information

Author: Clemencia Bogisich Ret

Last Updated:

Views: 6450

Rating: 5 / 5 (60 voted)

Reviews: 91% of readers found this page helpful

Author information

Name: Clemencia Bogisich Ret

Birthday: 2001-07-17

Address: Suite 794 53887 Geri Spring, West Cristentown, KY 54855

Phone: +5934435460663

Job: Central Hospitality Director

Hobby: Yoga, Electronics, Rafting, Lockpicking, Inline skating, Puzzles, scrapbook

Introduction: My name is Clemencia Bogisich Ret, I am a super, outstanding, graceful, friendly, vast, comfortable, agreeable person who loves writing and wants to share my knowledge and understanding with you.