What’s in a Name? The New CFP® Campaign
Have you seen any of the CFP® ads lately? YouTube, cable providers, and regular TV have started to show ads for financial planning that have us paying attention, like this:
Here we have a very everyday kind of couple talking about the universal financial goal of retiring. As they call it, their “Confident Forever Plan,” which is a play on the initials CFP® – CERTIFIED FINANCIAL PLANNER™.
We’re glad to see awareness being raised around one of the most common designations in the finance industry, as many investors don’t seem to know what it means. The CFP® Board has put together an ad campaign to make the jargon accessible called “With a CFP® Professional.”
This got us thinking about the many initials you might see in the financial world after an advisor’s name. They don’t all mean the same thing, and they’re not all created equal. The CFP® Board website points out that there are over 184 professional designations for financial advisors, some require a handful of hours and a test, while others require college degrees and more.
Professional Designations for Advisors – Just a Few
Today, let’s look at a few professional designations for financial advisors and the requirements and expertise associated with each.
● CFP® – CERTIFIED FINANCIAL PLANNERTM – the most widely recognized designation for advisors. Candidates must have a four year college degree with specific coursework approved by the CFP® board, 30 hours of continuing education every two years, and 6000 hours of experience before they are considered. Here at TFS Advisors, Dale has this professional designation.
● ChFC® – Chartered Financial Consultant® – has the same core curriculum as the CFP, but adds additional electives centering around personal financial planning. The consultant’s focus is to advise on proposed business plans or decisions. Dale holds this designation as well.
● CFA® – Chartered Financial Analyst® – Candidates must pass three exams, Level I, II, III and have four years experience. CFAs have an expertise in investment analysis and portfolio management.
● CDFA® – Certified Divorce Financial Analyst® – Individuals with an eligible Bachelors degree and minimum of three years of professional experience in finance or divorce. This includes experience as a financial professional, accountant, or matrimonial lawyer. CDFAs are experts in finance in regard to divorce.
● FPQPTM– Financial Paraplanner Qualified Professional TM – This designation requires completing a ten module course and doing a comprehensive exam. The FPQPTM has a strong emphasis on personal, practical financial advice. Here at TFS Advisors, Aaron carries this designation.
Again, these are just a few of the professional designation for financial advisors, but are some worth keeping an eye out for.
A Professional Analogy
Perhaps an easier way to look at professional designations is to consider the difference between a dietitian and a nutritionist. In our health-conscious culture, people are often looking for professionals to help them optimize their diet and exercise routine.
A “nutritionist” is a title that has become quite loose, used by everyone from serious students of dietary arts to any self-styled health guru who writes their name on a sign and hangs it outside their front door. “Dietitian,” however, is a stringent title meaning the specialist has been certified by the Commission on Dietetic Registration.
In the financial world credentials like those above are your seal of quality and approval by a regulatory board similar to the title of dietitian. Those letters carry a standard of having been validated by a host of professionals, and the advisor’s performance should reflect that.
What is Your Advisor’s Professional Designation?
You never know quite what you’ll get if you hire a nutritionist, but you know the designation “dietitian” comes with professional backing. Professional designations for financial advisors are the same. This is not someone who simply has a head for numbers or was an accountant for a few years, but a verified professional who’s been held to high standards by a community of excellence.
And so the question comes back to you: what are the initials after your advisor’s name? Has he/she been tested and approved by an outside committee such as the CFP® Board? If not, then who’s keeping your advisor accountable, how do you know you’re getting the best?
At TFS, we are serious about your money, and excited about your life. Looking after your best financial interests is a great honor to us, and we believe standards such as the CFP®, the FPQPTM, and others are vital to the health of the financial world.
If you’re interested in a comprehensive financial plan or just simply need a sounding board about the money side of life, give us a call at (425) 776-0446.