A Guide To Professional Designations in the College Planning Industry

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Introduction

Young woman doing her taxes w/ her daughter. John Burke

Even for parents with a working knowledge of the various college savings accounts, putting your plans into action can still feel overwhelming. Hiring a trusted professional can take a lot of the pressure off parents who are already managing busy lives.

But choosing a professional can feel like an equally daunting and confusing task. There are a lot of people who claim to be experts, many of whom have official sounding designations after their names. There are also a lot of horror stories about parents getting scammed out of hundreds or thousands of dollars by professionals who did not perform as advertised.

Here’s a primer on some of the more credible designations you may want to consider if you’re shopping for help:

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Certified Financal Planner (CFP)

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The CFP designation is perhaps the most widely recognized designation in the financial planning industry, and for good reason. To become a Certified Financial Planner, an individual must have a bachelor’s degree, complete 18-24 months of study, and pass a rigorous licensing exam.

Additionally, the CFP Board of Standards actively responds to complaints about licensees. It’s not uncommon for the Board to revoke licenses of those found to be acting below the accepted professional standards.

However, while a CFP has extensive training in the financial planning and investment process, they do not receive exhaustive training in college planning. So it’s best to consider the CFP designation as a minimum standard for a college planning professional. Ideally, if you choose to hire a CFP, he or she will have additional credentials or extensive experience working with college planning.

Lesser-known designations that can be considered fairly equivalent to the CFP designation are the Chartered Financial Consultant (ChFC) and the Personal Financial Specialist (PFS) designations.

A great place to begin looking for a CFP is on the CFP Boards of Standards directory, or by contacting your local Financial Planning Association.

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Certified College Planning Specialist (CCPS)

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While the title itself sounds fairly impressive and useful, the actual background and training of these individuals can vary widely. To get licensed according to the NICCP’s website, an advisor only needs to hold “any type of financial license.”

Since many of the acceptable “financial licenses” do not even require a college degree, it’s advisable to use an advisor with this designation only if they have more extensive training and credentials. If they hold this designation and are not a licensed stockbroker or investment advisor, they legally should not be giving you investment advice.

If you would like to find a professional with the CCPS credential, you can visit the website for the National Institute of Certified College Planners.

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Stockbroker or Registered Representative

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A Registered Representative, more commonly known as a “stockbroker”, is an investment professional that works for a Wall Street brokerage firm like Merrill Lynch. Becoming a stockbroker requires passing a fairly difficult exam known as the Series 7, which primarily covers investment principles.

Stockbrokers vary widely in their ability and focus, and may have little or no training in financial planning. This means that there are stockbrokers out there who will be great at helping you plan and save for college, as well as those who have very little experience.

Since the vast majority of stockbrokers work on commission, there is a natural conflict of interest that exists between your needs and their income. Oftentimes, a stockbroker will only make money if you invest with them, which can blind their ability to give impartial advice. Further, many stockbrokers’ investment recommendations are limited by their firms’ relationships with other investment companies.

For example, a large Wall Street firm may only have agreements with a portion of the companies offering Section 529 plans. Thus, a stockbroker’s recommendation may be based more on what they can offer you through their firm than what is best for you.

Generally, the best way to find a stockbroker is by asking other friends or professionals you trust. Once you’ve narrowed it down to a few potential candidates, you can perform an abbreviated background check on the National Association of Securities Dealers website.

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Certified Public Accountant (CPA)

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While most Certified Public Accountants do not give specific investment advice, they are invaluable in maximizing your college related tax benefits. Many things like the Hope Scholarship and the Lifetime Learning Credit, as well as Section 529 and Education IRA withdrawals, have complex tax rules.

Even if you’re already using a trusted CFP or Registered Representative to help you manage your college investments, these individuals are usually prohibited by law from giving you tax advice. Using a CPA in conjunction with one of these other professionals will help make sure you maximize your tax deductions and credits.

The Enrolled Agent (EA) designation is a lesser known, but equivalent designation in the world of tax preparation.

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Professional FAFSA Preparer

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There is no one designation needed for someone to get paid for helping people complete their FAFSA form. Virtually anyone can extend themselves as a “Professional FAFSA Preparer,” which is a little scary.

If you truly feel like you need help filling out the FAFSA form (the instructions are very clear when you complete the form online), consider asking your tax preparer or financial planner for help.

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Scholarship or Financial Aid Expert

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Again, this is one of the areas where no designation is required to call yourself an expert. Naturally, there are a lot of scams built on promises of huge scholarships and juicy financial aid packages.

You don’t need a paid professional to help you participate in Federal and state aid programs. In fact, the financial aid office at your college of choice is there to help you accomplish those exact tasks.

This isn’t to say there aren’t professionals out there who know the scholarship world like the back of their hand. If you can truly find one of these professionals, and you have a student that may qualify for more obscure scholarships, this may be a great person to have in your corner.

When it comes to choosing one of these professionals, the best method is going to be a solid referral from someone who has already used them. Ask other parents and financial professionals if they’ve worked with anyone worthy of your trust.

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Other Designations

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The investment and planning industry is full of less recognized designations that are often misrepresented to attract new clients. While none of these designations are bad things, they should be considered “bonus” designations for a college planning professional. These designations include the MBA, CLU, CIMA, CFA, and any type of insurance license.

Additionally, you need to be aware of designations created by larger investment firms and awarded only to their employees. Designations as “Section 529 Plan Specialist” may have only required an individual to complete a day-long class, and are as much a marketing ploy as a real credential.