Investments
2008-08-01 09:35:00
Financial advisor’s accreditations
Can someone please help me understand/define the accreditations and designations that are associated with a financial advisor’s name?
It is an understatement to say that, in the world of financial advice, the myriad of different accreditations and designations that appear after a financial advisor’s name can be confusing. The American College, one of the leading offerers of financial services education, listed twelve separate programs of study in its 2008 curriculum. Investment News reported in 2006 that as many as 100 certifications can be obtained from different financial planning groups.
The Financial Industry Regulatory Authority (FINRA) website at www.finra.org/index.htm has a section titled “Understanding Professional Designations” that lists eighty-five certifications, all with varying degrees of requirements necessary to obtain each mark. The site provides information about each designation including the name of the sponsoring organization, the experience, educational and examination requirements necessary or not necessary to obtain the designation. The site also lists whether there is an investor complaint and discipline process and whether you can check a person’s status online.
If there is one set of letters you want to see after an advisor’s name, it has to be CFP®. First, the requirements that a person must meet before they can use the CFP® marks are quite stringent. The CFP Board of Standards, which owns and oversees the use of the designation, requires CFP applicants to complete a comprehensive course of study followed by successful completion of a comprehensive two-day 10-hour CFP Certification Examination. The study and the exam cover a wide area of subjects including the financial planning process, tax planning, employee benefits and retirement planning, estate planning, investment management and insurance.
Once a person is awarded the right to call him or herself a CFP® Practitioner, they must meet requirements for continuing education, comply with the CFP Board’s Code of Ethics and adhere to standards of the financial planning profession set by the Board. So, even if you don’t quite know what the letters after an advisor’s name stands for, if you see the letters CFP®, you can have some confidence that the person will be someone that you would want to do business with.
