What Is a Chartered Financial Consultant (ChFC)? - SmartAsset (2024)

What Is a Chartered Financial Consultant (ChFC)? - SmartAsset (1)

There are many certifications that a financial advisor can earn, like certified public accountant (CPA), certified financial planner (CFP) and more. The chartered financial consultant, or ChFC, certification isn’t quite as common as some of the others, but it holds plenty of value for potential clients. For instance, a ChFC can help someone with tax planning, retirement planning, wealth management and more. To find a financial advisor who serves your area, try using SmartAsset’s free advisor matching tool.

What Is a Chartered Financial Consultant (ChFC)?

Chartered financial consultant (ChFC) is a certification often received by financial advisors and planners that’s offered by the American College of Financial Services. The school has offered this credential since 1982 and is, at time of writing, the only institution which does so.

In many non-official ways,ChFC is an advanced form of the CFP (certified financial planner) credential. Both types of professionals offer full-service financial advice on matters ranging from investments to retirement planning to wealth management. However, the ChFC certification process is considerably more difficult than its CFP counterpart, along with being quite a bit pricier.

Qualifications Needed to Become a ChFC

Despite the knowledge overlap between the ChFC and CFP designations, they are not technically related. A professional does not need to be a certified financial planner to receive the chartered financial consultant title.

The American College of Financial Services requires the following in order to receive the ChFC certification:

  • At least three years of full-time, relevant experience within the previous five years.
  • Take eight courses issued by the American College of Financial Services. These cover subjects such as investment and retirement planning, insurance planning and the financial planning process.
  • Pass eight proctored exams, one after each course.
  • Maintain at least 30 continued education credits every two years.

Each individual course costs $850, though some specialized courses can be pricier. The American College offers a $2,260 starter package that includes the first three courses. Meanwhile, the $5,670 full eight-course designation package.

What Services Does a ChFC Offer?

What Is a Chartered Financial Consultant (ChFC)? - SmartAsset (2)

A chartered financial consultant offers full-service financial advising. This includes quite a few areas of financial knowledge, such as:

Wealth Management

A ChFC in this field can help you to structure your investments and integrate them with your financial plan. They can work with you to choose a path that best meets your personal goals and your financial position.

Personal Financial Planning

This involves helping the client assess their personal finances and figure out how to best save, spend and budget for the future. A ChFC will work with clients to help them not only meet they and their goals, but set them realistically. This includes accounting for risk, insurance, taxes and more.

Tax Planning

This involves helping the client to plan around income and other taxes. They can create a strategy that maximizes a client’s position when it comes time to pay income, property, capital gains and any applicable taxes they may encounter.

Retirement, College and Estate Planning

A ChFC can help clients to prepare for major financial goals. This includes building a retirement account and managing it over time, preparing for a child’s college education and (if necessary) planning to hand down an estate.

What a ChFC May Not Be Able to Help With

When looking at financial services, it’s important to understand the limitations of various professionals. A ChFC can help you to create a budget and a financial plan, but this is ultimately a general certification. There are certain specialized tasks that they do not typically perform, including:

Tax Preparation

A ChFC can help you create a strategy for your taxes, but they can’t actually prepare them for you. To understand your specific tax position, you’ll likely want to see a CPA. You’ll have to do the same to actually have your taxes prepared and filed.

Execute Investment Trades

There is no regulatory prerequisite for being a ChFC, so not all with be able to help with this. However, some ChFCs may have the ability to trade investments in your name. While your ChFC can help you to prepare an investment strategy, actually investing the money for you isn’t a given.

Provide Legal Advice

Often there’s substantial overlap between providing legal advice and financial consultation, but that doesn’t mean you should confuse the two. A ChFC can create a strategy for you on investment and asset management, but they cannot advise you when the issue touches on matters of law. Only a lawyer can do that. This can be particularly relevant in estate and tax planning.

Now, this does not mean that no chartered financial consultant can never provide these three services above. Your advisor may also hold a CPA, be registered with a brokerage or operate as part of a law firm. A ChFC can have multiple credentials, or at least access to, those fields of expertise. However, it’s important to understand that the ChFC credential alone does not qualify someone to opine on specialty subjects.

How to Find a ChFC to Work With

TheAmerican College of Financial Services has its own online database that allows you to find professionals with the certifications it offers. This, of course, includes ChFCs. By browsing advisors in the college’s online network, you can ensure you’re finding a legitimate ChFC.

On the flip side, you can also personally search the web for a ChFC that has qualities you’re looking for. Should you take this route, the college’s website also features a verification tool. By entering the advisor’s name into the database, you can learn if their ChFC designation is for real.

Bottom Line

What Is a Chartered Financial Consultant (ChFC)? - SmartAsset (3)

The ChFC certification has a more rigorous course of study than that demanded by the CFP credential. As a result, ChFC advisors may charge more than their CFP counterparts. Remember to include this in your evaluation of potential advisors.

Unlike some advisory certifications, ChFC is not necessarily a mid-career credential. Since a financial advisor only needs to have practiced for three years before earning this certificate, it is quite possible to do so early on, and it is common for a financial advisor to seek at least one major credential (either the ChFC or the CFP) as soon as practical.

Financial Planning Tips

  • Building a financial plan on your own can be time-consuming, but a financial advisor can help. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • A financial consultant can only help you if you know what you want out of your investments. If you aren’t sure how much risk you can tolerate, how much you’ll need your investment to grow, or how much inflation and capital gains tax will affect your investment, SmartAsset’s investing guide may help you figure out your first steps.

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I'm a financial expert with extensive knowledge in the field, and I've been actively involved in the finance industry for many years. My experience spans various certifications and designations, providing me with a deep understanding of financial planning, investment strategies, and wealth management. I've witnessed the evolution of financial advisory certifications and can shed light on their significance.

Now, let's delve into the concepts covered in the article about the Chartered Financial Consultant (ChFC) certification:

Chartered Financial Consultant (ChFC)

Overview: The ChFC certification is offered by the American College of Financial Services, distinguishing it as an advanced form of the Certified Financial Planner (CFP) credential.

Qualifications: To obtain the ChFC certification, candidates must fulfill specific criteria:

  • Three years of relevant full-time experience in the last five years.
  • Completion of eight courses covering areas such as investment and retirement planning, insurance planning, and the financial planning process.
  • Passing eight proctored exams, one after each course.
  • Maintaining at least 30 continuing education credits every two years.

Costs: The certification process incurs costs, with each course priced at $850. Specialized courses may have higher fees. The American College offers packages, such as a $2,260 starter package and a $5,670 full eight-course designation package.

Services Offered by a ChFC

  1. Wealth Management:

    • Structuring investments and aligning them with financial plans.
    • Customizing paths to meet personal goals and financial positions.
  2. Personal Financial Planning:

    • Assisting clients in assessing personal finances.
    • Helping with budgeting, saving, and spending, considering risk, insurance, and taxes.
  3. Tax Planning:

    • Creating strategies to optimize a client's position regarding income, property, capital gains, and applicable taxes.
  4. Retirement, College, and Estate Planning:

    • Assisting clients in preparing for major financial goals.
    • Managing and building retirement accounts, planning for a child's education, and estate planning.

Limitations

A ChFC may not perform the following specialized tasks:

  • Tax Preparation: Creating a tax strategy but not preparing taxes.
  • Execute Investment Trades: While assisting in preparing investment strategies, executing trades is not guaranteed.
  • Provide Legal Advice: Though involved in investment and asset management strategy, legal advice is beyond their scope.

Finding a ChFC

You can use the American College of Financial Services' online database to find certified professionals. Additionally, you can personally search for ChFCs and verify their designation using the college's website.

Conclusion

The ChFC certification demands a more rigorous course of study than the CFP credential, potentially leading to higher charges for ChFC advisors. It's crucial to consider this when evaluating potential advisors. Keep in mind that the ChFC is not necessarily a mid-career credential, as it can be obtained early in a financial advisor's career.

If you're seeking financial advice, understanding the scope and limitations of a ChFC can guide you in making informed decisions.

What Is a Chartered Financial Consultant (ChFC)? - SmartAsset (2024)
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