Understanding What Your Financial Advisor’s Designations Mean

Written by Jeff Helms

The financial world is complex and constantly changing. Those changes can impact our clients and their plans for the future. As the firms founder and Managing Partner, making sense of these changes is my job. We try to simplify communication on market dynamics to make it meaningful and useful for our clients.

December 16, 2015

When you’re searching for an investment advisor, chances are you’ve been inundated with the “alphabet soup” of designations various advisors have after their names. It’s important to understand what these designations actually mean, and the level of commitment and education financial professionals have put into becoming adept at their trade.

CFP: Certified Financial Planner

Candidates for this designation must have a Bachelor’s Degree and have worked full-time in the industry for a minimum of three years or have served as a full-time apprentice for a minimum of two years. Once this is complete, there is a certification exam which only approximately two-thirds of all applicants pass. After meeting all eligibility requirements, the candidate must agree to the CFP Board’s Code of Ethics and Professional Responsibility and Financial Planning Standards. Generally, these professionals focus on working with individuals and helping them assess their savings and investing goals and helping guide them into suitable investments.

CFA: Chartered Financial Analyst

Candidates for this designation must have a Bachelor’s Degree and have completed four years of work in their fields. This designation requires three total tests to be taken to get the full designation. Only slightly more than one-third of all applicants successfully complete the testing requirements. Successful candidates will have a well-rounded knowledge of the portfolio management process including analyzing various investments for suitability depending on an investor’s goals and financial status. The required training for this position includes topics like accounting, ethics, economics and stock analysis. Professionals with this designation have a unique role in advising CFPs on how to make better investment recommendations to their clients.

CPA: Certified Public Accountant

Nearly all of us will recognize this designation as it is one of the oldest financial designations in the United States. Educational requirements and work hour requirements have changed over the years and are generally determined on a statewide level. Florida CPA designation requirements include a minimum of 120 semester hours of education on various accounting topics, taxation topics, and auditing, among others. The testing for a CPA designation contains four specific modules which must be passed before the candidate may be approved as a CPA.

When you’re working with someone to help you determine the best way to invest your money and help you make investment decisions, you want to make sure they are well-trained and have the skills and experience necessary. Investors who are working with individuals with these particular designations can feel confident they are working with professionals with the education and knowledge to help them make the best possible decisions based on their financial situation.

The Back Office: Why Customer Service Matters

Another important aspect of working with a wealth management firm is the “back office”. These individuals are the backbone of an operation and can help clients with basic questions and make sure their more complex questions get answered. We prefer to hire staff members who are professionals in the customer service industry, and as such, our support staff typically have the following designations:

ACS: Associate, Customer Service – This training course offers customer service professionals and in depth understanding of the financial services industry and allows them to answer customer questions with confidence. Candidates gain an understanding of how to deal with clients effectively as well as an increased knowledge of financial markets.

AIAA: Associate, Insurance Agency Administration – This designation is important for anyone who is involved in any type of insurance business, including life insurance and annuities. These professionals are trained to interact with salespersons as well as administrative staff and can be a great asset to those in the financial services field.

Be Confident in Your Advisor’s Expertise

When you’re seeking assistance managing your wealth, you can feel more confident in your choices if you seek professionals who have these designations. Not only can you be sure that they’ll adhere to the highest ethical standards, you’ll also feel confident they have the knowledge and education to help you make better financial planning decisions.