01 Dec What is a Certified Financial Divorce Analyst?
Going through a divorce can often feel lonely and confusing. Even if you know others who have been through a divorce, the process has evolved significantly in the last decade, and friends and family don’t always have the most up-to-date advice and insights to offer. That’s one of the reasons many parties are choosing to work with more specialists and advisors in the process than ever before. Choosing the right partners can make all the difference in achieving the outcomes you want in your divorce.
One of the important specialists to consider is a Certified Divorce Financial Analyst (CDFA), an advisor who holds one of the most desired and respected global divorce certifications. In this post, we’ll explore the role of a CDFA and how they can help you throughout your divorce.
Training & Credentials
A Certified Divorce Financial Analyst specializes in divorce finances in similar ways to a financial planner. However, while a financial planner is more of a generalist, a CDFA is trained specifically in divorce financial planning. In July 2020, the CDFA eligibility requirements changed to require a bachelor’s degree with three years of on-the-job experience, or five years of relevant experience if a CDFA does not hold a bachelor’s degree. Relevant experience must be in the fields of:
- Financial planning
- Family law
- Or experience in three or more of the following areas:
- Tax code
- Investment advisement or management
- Real estate, mortgage, or mortgage lending
- Life or disability insurance
- Financial therapy or coaching
Based on these requirements, CDFA’s have deep experience and understanding of general finance along with specialized training around the financial dynamics of a divorce.
Complementing other professionals
CFDA’s work alongside attorneys and other important divorce professionals. However, attorneys are not financial professionals and are often not aware of specific intricacies surrounding tax, investment, transfer, and account regulations. Not to mention, you would not want them to bill you at their high rate to help with the financial support that is often needed throughout your divorce. Having a CFDA work alongside your attorney gives you access to specialized support and helps you feel comfortable making pressing financial decisions.
A CFDA can serve as an expert in topics that may affect your long-term financial picture. He or she will often complete an analysis and provide recommendations on topics such as:
- Spousal or child support
- Dividing marital property/assets
- Proposing the value and division of retirement and pension funds
- Property limitations or requirements regarding the division of assets
- The economics of your divorce
- Setting financial goals and retirement objectives
- Divorce tax law, tax consequences, and tax liabilities
- Financial negotiation strategy
- Current and future cash flow (budgeting), and overall financial planning
Specifically, CFDAs are helpful in divorces that are more financially complex, or those that require more education throughout the process (because one party isn’t as financially savvy or hasn’t been as involved in the finances).
Choosing a CFDA
Like the process of choosing any divorce professional as a partner in achieving the outcomes you desire, look for a CFDA who has related experience with similar types of clients, first and foremost. That way, they will offer relevant input and insights from firsthand experience. Check his or her qualifications to ensure a CDFA designation in addition to any additional certifications such as a CFPⓇ or ChFCⓇ.. Since many of the financial requirements of a divorce are state-specific, geographic experience is critical. Like any professionals you partner with, ensure you are aligned on preferred communication styles, whether that be weekly meetings, emails, phone calls, or a combination of the above. Referrals from friends, family, and your professional networks are always a good place to start.
At A.M. Financial, we are a strong choice to partner with your financial needs with several prominent professional designations as well as over 15 years of experience supporting individuals and families with their financial planning needs of which 6 years working in the area of divorce. We know that each divorce is unique, and therefore we begin with a free consultation to understand your divorce specifics so we can best explain how we can support the outcomes you desire. Contact us to schedule that conversation today.