In case you were wondering, here’s a list we created of the most common 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
AAMS – Accredited Asset Management Specialist
Complete 12-module education program, Pass an examination, Commit to a code of ethics, Agree to pursue CE
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 to be honest. Most of the designations you might see on a financial advisors business card might not be worth the ink they’re printed with, but the ones above are generally a bit more elite.
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.
Confusing to say the least, I realize that. However you should always start with a CFP as a minimum requirement for who you choose to be your financial advisor.
