Understanding Financial Advisor Designations

Understanding Financial Advisor Designations
Photo (cc) by Alan Cleaver

Do you know the difference between a CPA and a CFU? How about a CFP and a CFA? If you’re going to get financial advice, descrambling this alphabet soup of designations is a must… otherwise, you could end up with a Farm Manager (AFM) instead of a Financial Manager (CFM).

You’ll recognize a few of the more common ones, but you may not be completely versed in their meaning.

  • Certified Public Accountant (CPA) – A CPA is an experience accountant who has met licensing and education requirements of the state in which he or she resides. If you’re looking for a good tax pro, a CPA should be a good choice.
  • Personal Financial Specialist (PFS) – A PFS is a CPA who has undergone some additional financial planning education, and has met testing and experience requirements. Think of a PFS as a super-CPA… in fact, you’ll often see the designation written as CPA/PFS.
  • Certified Financial Planner (CFP) – These guys has studied and passed exams in risk management, investments, tax planning, retirement planning, and estate planning, so their generally knowledgeable in a wide range of topics.
  • Chartered Financial Consultant (ChFC) – Typically an insurance professional who has specialized in some aspect of financial planning, completing courses in economics, investments, insurance, taxation, and a few other related areas.
  • Chartered Financial Analyst (CFA) – CFA’s have passed exams in financial accounting, economics, portfolio management, security analysis, and standards of conduct. Typically, a CFA will be a investment professional (institutional or private client investment managers, investment bankers/broker dealers, investment consultants, and mutual fund managers) who has undergone a graduate level, self-study course to gain the CFA designation.
  • Chartered Retirement Planning Counselor (CRPC) – A CRPC designation allows financial planners to focus on (you guessed it) retirement planning. There is also an exam and strict code of ethics for CRPC’s.

This list is by no means comprehensive. However, WiserAdvisor maintains a page specifically for understanding advisor designations that briefly explains more of them than you can count, or a simple Google search will quickly reveal a host of additional designations.

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