How Authentic are my Advisor's Certifications?
Investors hire financial professionals because they believe the advisors have specialized knowledge that will help them achieve their financial goals. One way investors measure knowledge is to place value on certifications and designations that appeart after the advisors'name. Investors assume certifications require a lot of work on the part of advisors and that they must past difficult examinations before they are allowed to use the credentials. These assumptions may or may not be true.
Certification Mills
You've heard of diploma mills that sell BA, BS, MBA, and PhD degrees. No real work is required to earn the degrees, just money. Advisors can also by certifications and designations from mills.
Deceptive Sales Practice
This deceptive sales practice is used by advisors who want you to believe they are more knowledgeable than they really are. They know the more they appear to be experts the higher the probability you'll follow their recommendations and buy what they are selling. Advisors get away with this practice because:
Very few investors know a good certification from a bad one.
Less than 3% of investors will commit time to checking the validity of certifications
Financial services regulators can't control what advisors "say" to investors
How to Avoid this Deceptive Sales Practice
The good news you can avoid this deceptive sales practice by following the steps that are outlined below.
Ask advisors for the names of the organizations that provide the certifications and the URLs of their websites
Go to their websites to obtain the following information: How long have the organizations been providing the certifications?
How many hours of study are required to obtain the certifications?
Is the program self-study, classroom, or both?
Are their proctored examinations or are they open book?
Does the certification have significant continuing education requirements?
Does the advisor have a current certificate?
When is doubt call the organizations that issued the certifications
Quality Certifications & Designations
The best certifications are the ones that require a lot of work and include a comprehensive examination to make sure the advisors acquired knowledge they can use to help you achieve your financial goals. Four certifications and designations that stand-out are: Chartered Financial Analyst (CFA), Certified Financial Planner (CFP), Certified Public Accountant / Personal Financial Specialist (CPA/PFS), and Certified Invesment Management Analyst (CIMA).
Documentation
You should always ask advisors for copies of their certifications and designations:
You can determine if they actually have the certification
You can see when they earned the certification
You can determine if they are currently in good standing with the sponsoring organizations
Types of Certifications & Designations
There are approximately 150 certifications or designations for financial advisors, planners, and representatives. The following list contains some of the more frequently used ones that have a broad range in quality. These credentials are in alphabetical order and are not listed by quality or importance.
AAMS - Accredited Asset Management Specialist (SM) Source: College for Financial Planning
(800-237-9990) or www.cfp.net
12 module program / Examination
Continuing Education
AFC - Accredited Financial Counselor Source: Association for Financial Counseling and Planning Education
614-485-9650 or www.afcpe.org
Two courses with exams; self study
30 hours of Continuing Education every two years
AIF - Accredited Investment Fiduciary Source: Center for Fiduciary Studies
866-390-5080 or www.cfstudies.com
2.5 day program or 15-20 hours of self study
Continuing Education
CAP - Chartered Advisor in Philanthropy Source: American College
888-263-7265 or www.theamericancollege.edu
3 courses at college/self study
15 hours of Continuing Education every two years
CASL - Chartered Advisor for Senior Living Source: American College
888-263-7265 or www.theamericancollege.edu
5 courses at college/self study
15 hours of Continuing Education every two years
CCC - Certified Credit Counselor Source: National Institute of Financial Counseling Education
321-727-2233 or www.nifce.org
Seminar/self-study
8 hours of Continuing Education per year
CCPS - Certified College Planning Specialist Source: National Institute of Certified College Planners
315-487-4567 or www.niccp.com
Three modules; self study
24 hours of Continuing Education per year
CDFA - Certified Divorce Financial Analyst Source: Institute for Divorce Financial Analysts
800-247-8132 or www.institutedfa.com
Four exams/self study
20 hours of Continuing Education every two years
CEP® - Certified Estate Planner Source: National Institute of Certified Estate Planners
877-776-4237
Three day classroom or correspondence/proctored examination
Eight credits every two years
CESP - Certified Specialist in Estate Planning Source: National Institute for Excellence in Professional Education, LLC
610-688-4574 or www.niepe.org
6 core courses and 2 electives
24 hours of Continuing Education every two years
CFA® - Chartered Financial Analyst Source: Chartered Financial Analyst Institute
800-247-8132 or cfainstitute.org
Three years/three exams
Continuing Education
CFP® - Certified Financial Planner Source: Certified Financial Planner Board of Standards
800-487-1497 or www.cfp.net
Board Approved Curriculum/10 hour examination
30 hours of Continuing Education every two years
CFS - Certified Fund Specialist Source: Institute of Business & Finance
(800-848-2029) or www.ibfdesignations.com
60 hours of course work / examination
15 hours of Continuing Education per year
ChFC - Chartered Financial Consultant Source: American College
888-263-7265 or www.theamericancollege.edu
6 courses and 2 electives
30 hours of Continuing Education every two years
CIMA - Certified Investment Management Analyst Source: Investment Management Consultants Association
303-770-3377 or www.imca.org
Five day classroom program/substantial self study/four hour examination
40 hours of Continuing Education every two year
CLTC - Certified in Long-Term Care Source: Corporation of LTC Certification
617-796-9788 or www.ltc-citc.com
Self study
CMFC - Chartered Mutual Fund CounselorSM Source: College for Financial Planning
(800-237-9990) or www.cfp.net
Nine module program / Examination
Continuing education
CPWA - Chartered Private Wealth Advisor Source: Investment Management Consultants Association
303-770-3377 or www.imca.org
Pre-study and five day in-class program/comprehensive examination
40 hours of Continuing Education every two years
CRFA - Certified Retirement Financial Advisor Source: Society of Certified Retirement Financial Advisors
888-880-CRFA or www.crfa.us
Four day course/self study
15 hours of Continuing Education per year
CSA - Certified Senior Advisor Source: Society of Certified Senior Advisors
800-653-1785 or www.society-csa.com
Three day course/self study
18 hours of Continuing Education every three years
CSA is not a financial certification of designation. It denotes specialized knowledge about the evolving needs of people as they age.
PFS - Personal Financial Specialist Source: American Institute of Certified Public Accountant
888-777-7077 or www.aicpa.org
3 years of planning experience and an examination
RFC - Registered Financial Consultant Source: International Association of Registered Financial Consultants
800-532-9060 or www.iarfc.org
Must meet education, experience, and membership requirements
RFG - Registered Financial Gerontologist Source: American Institute of Financial Gerontology
(888-367-8470) or www.asaging.org
Six courses / examination
This editorial is for informational purposes only and is not to be considered financial, tax, or legal advice. Paladin Registry does not endorse or recommend any of the certifications or designations on this list.
