If you’re searching for a financial planner, you’ll come across lots of different titles and acronyms that follow a planner’s name.
You may have seen some of the more common ones for financial professionals, like CFP, CPA, CFS, or CIMA. These designations indicate different financial certifications that an advisor may hold and specific ethics or guidelines that the advisor must adhere to.
But not all certifications are equal. Some require a higher code of conduct, more continuing education, or passing rigorous exams.
We’ll explain the 10 most critical financial certifications to look for when looking for a financial planner, and what those certifications mean.
Top 10 Certifications for Financial Professionals
- Certified Financial Planner (CFP)
- Certified Public Accountant (CPA)
- Chartered Financial Consultant (ChFC)
- Chartered Financial Analyst (CFA)
- Chartered Investment Counselor (CIC)
- Financial Risk Manager (FRM)
- Chartered Life Underwriter (CLU)
- Chartered Alternative Investment Analyst (CAIA)
- Chartered Mutual Fund Counselor (CMFC)
- Certified Management Accountant (CMA)
1. Certified Financial Planner (CFP)
The CFP certification is one of the most highly regarded within the industry. Planners with this designation can assist in many different financial areas, including taxes, investment, estate planning, life insurance, generational wealth preservation, and retirement.
Requirements for this certification are among the most rigorous, as CPFs have several years of experience (6,000 hours) in asset management, pass the CFP exam (which is seven hours long and has a 70 percent pass rate), and adhere to a strict code of ethics set forth by the CFP Board of Standards.
Consumers are increasingly seeking this CFP certification, preferring to work with advisors who have advanced knowledge and training beyond entry-level requirements.
2. Certified Public Accountant (CPA)
The CPA designation is the gold standard for accountants. For some accounting jobs and finance firms, a CPA may be a required job designation. The CPA certification is administered by the American Institute of CPAs (AICPA). The process requires 150 hours of coursework, followed by a rigorous exam.
Working with a CPA may be beneficial for those who want financial advice related to asset allocation, reducing tax liability, and general budget and cash flow management.
In addition to accountants, many other industry professionals may hold this designation. This includes financial analysts, tax preparers, tax attorneys, stock analysts, and chief financial officers (CFOs).
3. Chartered Financial Consultant (ChFC)
The ChFC is a lesser-known title but still common and well-regarded within wealth management circles. A ChFC has similar training to a CFP but has additional specialization to meet specific needs like small business planning or estate planning for remarried or unmarried couples.
The American College of Financial Services (ACFS) oversees the certification process and administers both the needed coursework and challenging final exams. An applicant must complete eight ACFS educational courses, seven of which are part of the CFP curriculum.
After receiving certification, a ChFC must complete at least 30 hours of continuing education (CE) every two years in order to maintain accreditation.
4. Chartered Financial Analyst (CFA)
A chartered financial analyst is an expert investment manager. Many consider the CFA designation to be the most desired designation when it comes to managing investments and securities.
The CFA accreditation is one of the hardest to achieve. It requires a candidate to master 10 different areas of investment, including risk management, taxes, estate planning, and retirement, and pass three exams. It takes most participants four years and over 400 hours of study in order to complete the program.
CFAs commonly work as financial executives, portfolio managers, hedge fund managers, analysts, or financial planning consultants. Many also hold an MBA degree. CFAs may or may not hold any fiduciary obligation toward their clients.
5. Chartered Investment Counselor (CIC)
A chartered investment counselor is similar to the CFA designation. It’s designed specifically for finance professionals who work in investment counseling and portfolio management. Unlike the CFA title, CICs are required to be fiduciaries and work in the financial best interest of their clients.
To achieve this designation, a financial planner must have at least five years of experience and work at an investment firm that is a member of the Investment Adviser Association (IAA). There are no examination or educational requirements, however, CICs do need a number of character references and significant experience in investment counseling.
According to the Financial Industry Regulatory Authority (FINRA), this designation is no longer offered to new applicants. Accreditation, however, is still maintained by the issuing organization IAA.
6. Financial Risk Manager (FRM)
As the title implies, a financial risk manager specializes in helping manage financial risk. Commonly, certified FRMs work as risk analysts for banks and insurance companies. Some FRMs are consumer-facing, at least in part, and provide investment and personal finance guidance to private clients.
Earning a FRM certification is an arduous process. Candidates must pass an eight-hour exam with pass rates commonly below 50 percent. The exam, a multiple-choice test, is administered by the Global Association of Risk Professionals (GARP).
In addition to passing the exam, applicants must have at least two years of relevant work experience. Beyond that, FRMs must complete 40 hours of continuing education or professional development every two years in order to maintain certification.
7. Chartered Life Underwriter (CLU)
Issued by the American College of Financial Planning (ACFP), the CLU designation is well-suited to insurance agents, insurance underwriters, and estate planners. They have expertise in underwriting, risk assessment, and business planning.
Applicants do not have to pass a final certification exam, but they are required to complete eight education courses administered by the ACFP. Every two years, CLUs must complete 30 hours of continuing education including one hour in ethics training.
Chartered life underwriters may provide consumer-facing services to help individuals with special insurance or financial needs. Additionally, many ChFCs or CFPs choose to pursue CLU certification to enhance their learning and credentials.
8. Chartered Alternative Investment Analyst (CAIA)
The CAIA destination is for finance professionals who manage non-traditional or high-risk investments like hedge funds. It provides recognition for financial professionals with expertise in analyzing, managing, or distributing alternative investments.
The Chartered Alternative Investment Analyst Association (CAIA) issues this designation and runs the certification program. Completion takes about 12 to 18 months, including coursework and two exams.
CAIAs may work in hedge funds, investment firms, private equity firms, foundations, trusts, universities, pension plans, or for state or local government. Many CAIAs also have other designations, like FRM, CPA, Certified Fraud Examiner (CFE), or MBA.
9. Chartered Mutual Fund Counselor (CMFC)
A chartered mutual fund counselor (CMFC) is an expert in mutual funds. This professional designation is offered by the College of Financial Planning and requires completion of a 10-week course followed by a series of exams.
According to FINRA, the College of Financial Planning is no longer issuing new certifications but existing members may retain and renew this designation. Current, active CMFCs are required to complete 16 hours of continuing education every two years.
CMFCs offer investment advice and financial planning services related to mutual funds and common workly for banks, insurance companies, or investment companies. CMFCs may also hold other finance industry certifications related to financial planning and investment services.
10. Certified Management Accountant (CMA)
A certified management accountant is an expert at management accounting. These accountants typically work for large business corporations rather than private accounting firms, and they use their skills in finance and management to make strategic business decisions.
Certification is administered by the Institute of Management Accountants (IMA). The IMA requires applicants to have a Bachelor’s degree, two years of continuous working experience in finance or management accounting, and Institute membership.
CMAs must also pass a two-part exam that consists of 100 multiple-choice questions and two essays per exam. The exam tests your proficiency in 12 financial competencies including professional ethics, corporate finance, and financial statement analysis. The exam has a 50 percent pass rate and requires 12 to 18 months of study.
Other Financial Certifications
Beyond the 10 most important financial certifications we’ve shared, here are some other common designations and what those acronyms represent.
- RICP: Retirement Income Certified Professional
- AIF: Accredited Investment Fiduciary
- IAR: Investment Adviser Representative
- PFS: Personal Financial Specialist
- IMA (IM&A): International Mergers and Acquisitions
- CPWA: Certified Private Wealth Advisor
- CIMA: Certified Investment Management Analyst
- CIMC: Certified Investment Management Consultant
- FMVA: Financial Modeling and Valuation Analyst
- CRPC: Chartered Retirement Planning Counselor
What is the Easiest Finance Certificate to Get?
It’s not easy to obtain any finance certificate, as each certificate requires years or hundreds of hours of work, expertise, and additional study and exams.
Three of the more accessible certificates to obtain include the RICP, CIMA, CRPC, and ChFC.
Do Advisors Have All Major Financial Certifications?
No one advisor will have all major financial certifications, but many do have two or more accreditations.
Which Certifications Should I Look for in a Financial Advisor?
Some of the most common certifications to look for include CFP, CFA, CPA, or ChFC, but these are not the only seals of competency.
Amid a confusing hodge-podge of different titles, our list above highlights the ten most important certifications or titles for an advisor to have.