The financial industry designations are seemingly limitless! It amounts to an alphabet soup of randomness, and in many cases the letters aren’t worth anymore than the noodles in the soup!
To help clear up the confusion, here’s a list of the “more distinguished” industry designations, and a brief description of each.
Acronym – Meaning – Requirements
CFA – Chartered Financial Analyst
Passing three six-hour exams, Working as an investment professional for at least 4 years, Committing to abide by CFA code of ethics
CFP – Certified Financial Planner
Pass two hour exams given in 5 parts as well as a final, Complete 30 hours of continuing education every 2 years, Held to a high ethical standards
CLU – Chartered Life Underwriter
Complete courses at American College focused on risk management
ChFC – Chartered Financial Consultant
Complete courses at American College focused on financial planning
CTFA – Certified Trust and Financial Advisor
Have specific levels of experience and education, Pass a comprehensive exam, Agree to abide by a code of ethics
PFA – Personal FInancial Advisor
Three years of relevant experience, Pass a comprehensive examination, Adhere to a code of ethics
CFS – Certified Fund Specialist
Pass three exams, Have accumulated 2,000 hours of work experience, Must report 30 hours of CE every 2 years, Must sign a code of ethics
RIA – Registered Investment Advisor
Complete FINRA examinations, Complete series 66, Complete Series 7 or Series 65 exams
RR – Registered Representative
Must be sponsored by a broker-dealer firm, Must pass the FINRA administered 7 series
AFC – Accredited Financial Counselor
Pass AFCPE courses, Meet experience and ethics requirements, Submit three letters of reference
RFC – Registered Financial Consultant
Meet education, experience, and membership requirements, Agree to abide by their code of ethics, Have previously earned a CFP, CFA, CFP, CLU, ChFC, J.D., EA, or RHU
AIF – Accredited Investment Fiduciary
Substantial coursework and a comprehensive test
As you can see – there are a LOT of designations. These only scratch the surface.
Most of the designations you might see on a financial advisors business card might not be worth the ink they’re printed with. The ones above are generally a bit more “elite” in nature.
Also it’s important to know that you can be an RIA, and a CFP. Meaning, you may have earned a CFP designation, and may practice as a CERTIFIED FINANCIAL PLANNER, but do so in the form of an RIA or as an RR for a broker dealer.
It’s confusing to say the least, I realize that. However you should always start with a CFP as a minimum requirement for anyone you would choose to be your financial advisor. The best place to start is the NAPFA find an advisor function.