The Financial Planning Competency Handbook , 2d ed.

The Financial Planning Competency Handbook
The Financial Planning Competency Handbook

If you want to become a certified financial planner you must first complete the extensive CFP Board education requirements and then pass the CFP exam. In 2013 the overall pass rate was 63.3%.

The Financial Planning Competency Handbook, written primarily by academics who are also CFPs under the auspices of the Certified Financial Planner Board of Standards, serves two functions. First, it is a supplementary prep course for the exam. Those who buy the book have access to an online site with nearly 400 practice questions. And second, since I doubt that many people preparing for the exam master (or subsequently remember) all of the material a financial planner is expected to know, it is a useful reference for practicing professionals.

In a little over 900 pages the book covers 88 topics. A very brief sampling from the first, and by far the largest, part of the book: cash flow management, health care cost management, business uses of insurance, quantitative investment concepts, tax reduction and management techniques, gifting strategies, and estate planning for non-traditional relationships. Seven chapters deal with the client-planner relationship and developing, communicating, implementing, and monitoring financial planning recommendations. The last part of the book introduces readers to insights from other disciplines that can enhance the financial planner’s competence—for instance, behavioral economics, marriage and family therapy, and the psychology of decisions.

This is not a book you read cover to cover in a few sittings. But it’s a book that belongs on the shelves of everyone who gives (or sells) financial advice. Clients deserve well informed, high quality, professional service.