The following certifications are widely recognized within the financial services advisory industry:
* Accredited Estate Planner (AEP)
* Certified Financial Planner (CFP)
* Chartered Financial Analyst (CFA)
* Chartered Investment Advisor (CIC)
* Insurance agents
> Chartered Financial Consultant (ChFC)
> Chartered Life Insurer (CLU)
* Personal Finance Specialist (PFS)
This short list of certifications was compiled using various sources. First, many other certifications require these certifications as a prerequisite. Second, when registering as an advisor in certain states, some of these certifications may substitute for passing various tests administered by the North American Securities Administrators Association, Inc. (NASAA) Third, Form ADV, which is used By the SEC and most states for registration advisers, it explicitly lists many of these particular designations. Finally, these designations are most frequently mentioned in financial planning literature and on investment and financial websites.
Accredited Estate Planner (AEP)
The AEP is awarded by the National Association of Wealth Planners and Councils (NAEPC). To obtain the AEP, the applicant must:
* have an attorney license, CPA, CLU, ChFC, CFP or CTFA
* participate professionally in “estate planning activities”,
* have at least five years of directly relevant experience (or 15 years to waive educational requirements)
* take certain required courses from The American College or take two “challenge exams”
> (See the ChFC and CLU listings below for more information on The American College.)
* have membership in a NAEPC council,
* send references, and
* Commit to the NAEPC code of ethics.
Certified Financial Planner (CFP)
The CFP is awarded by the Certified Financial Planner Board of Standards Inc. (CFPBS). To earn the CFP designation, a candidate must have five years of work experience in personal financial planning or three years and a bachelor’s degree. You must pass a comprehensive exam. To take this exam, you must complete a course of study offered by various educational organizations, or you must already have a CPA, ChFC, CLU, or CFA designation or a Ph.D. in business or economics, Doctor of Business Administration, or a lawyer’s license. . The CFPBS has an online consumer complaint process and professional disciplinary process, and supports online verification of professional status and references.
According to the CFPBS, it is “a non-profit regulatory organization (that) promotes professional standards in personal financial planning so that the public values, has access to, and benefits from competent and ethical financial planning. The CFP Board of Directors holds the CFP®, CERTIFIED FINANCIAL PLANNER (TM) and federally registered CFP certification marks (with the flame logo), which awards individuals who successfully complete initial and ongoing certification requirements. The CFP Board currently authorizes more than 43,000 people to use these marks in the United States. ” The CFPBS also “establishes and enforces the education, testing, experience and ethics requirements for CFP® certificates.” (Footnote 1)
Chartered Financial Analyst (CFA)
“CFA Institute is comprised of more than 70,000 individual voting members and 131 non-voting member societies who believe in setting a higher standard for the investment profession. Individual members either have the CFA designation or are active in the investment business and agree to comply with the CFA Institute Ethical Requirements. “
Formerly the Association for Investment Management and Research (AIMR), the CFA Institute confers the CFA designation. Successful candidates must pass three successive exams that require approximately 250 hours of preparation for each exam. A candidate must also have four years of work experience or a bachelor’s degree and three years of work experience.
The CFA Institute operates a professional conduct process that includes an investor complaint process and investors can check the status of an advisor’s CFA credentials.
Chartered Investment Advisor (CIC)
The CIC designation is granted by the Investment Counsel Association of America, Inc. (ICAA). ICAA “is a national nonprofit association whose membership consists exclusively of federally registered investment advisory firms.” (Footnote 2) Candidates must have worked for an ICAA member firm and must hold the CFA designation.
Insurance agents
+ Chartered Financial Consultant (ChFC)
+ Chartered Life Insurer (CLU)
The ChFC and CLU designations are awarded by The American College. To earn either designation, the candidate must complete eight courses and have three years of full-time insurance or personal finance experience. If an individual has completed the CLU designation, they could also earn the ChFC designation by completing three additional courses. There is no complaint or disciplinary process for any designation.
The American College states that “Founded in 1927 as The American College of Life Underwriters, the College has expanded its instructional offerings in recent decades to reflect the increasing convergence of the insurance and other financial services professions. A variety of designations, certificates , graduate degrees, and continuing education programs now complement its recognized CLU designation. ” (Footnote 3)
Personal Finance Specialist (PFS)
The PFS designation is awarded by the American Institute of Certified Public Accountants (AICPA). The AICPA established a PFS credential “for certified public accountants who specialize in personal financial planning.” To have the PFS designation, a person must:
* be a member of AICPA
* have a CPA issued by a state and not revoked
* earn points based on experience and exam
* Submit references and other proof of personal financial planning work experience.
Footnotes:
1) Certified Financial Planner Board of Standards Inc. (CFPBS) website 2) Investment Counsel Association of America, Inc. (ICAA) website 3) American College website