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 the advisor uses after his or name. Investors assume certification programs require a lot of work on the part of advisors and they must past tough examinations before they are allowed to use the credential.
These assumptions by investors may not be true at a number of levels:
- You've heard of diploma mills that sell BA, BS, MBA, and PhD degrees. These same mills produce as many as 150 certifications and designations for the rising popularity of the Internet has spawned more than 150 certifications and designations.
- Some certifications require little or no work and the "exams" are 20 questions and open book.
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 knowledgeable they appear 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.
- Only a very small percentage 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 contact the organizations that issued the certifications
Quality Certifications & Designations
The best certifications are the ones that required a lot of work and included a comprehensive examination to make sure the advisors acquired knowledge that will help them do a better job for you. 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
- 941-761-0869 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 Counselor
- 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.
