Keeping track of financial designations
What do the letters after an advisor’s name mean?
Professionals in many industries tout their education and professional experience as a way to demonstrate their expertise and set themselves apart. The financial industry is a prime example, with almost 200 professional credentials advisors can obtain to sharpen their ability to serve clients well. If you are searching for a financial advisor and seeking clarity on what the acronyms after each professional’s name means, below is a primer on eight of the most common designations.
• Accredited Estate Planner: Advisors seek the AEP designation to learn more about designing an estate plan focused on the accumulation, conservation, preservation and transfer of an estate in a way that also helps individuals achieve their estate and wealth management goals.
• Accredited Portfolio Management Advisor: Individuals who hold the APMA designation have completed a course of study to learn more techniques to create and maintain portfolios for clients. The coursework includes client assessment and suitability, risk/return, investment objectives, bond and equity portfolios, modern portfolio theory and investor psychology.
• Chartered Advisor in Philanthropy: The CAP designation provides professionals in the nonprofit and financial services fields with the knowledge and tools needed to help clients reach their charitable giving objectives while also helping them achieve their estate planning and wealth management goals. The curriculum addresses the advanced design, implementation and management of charitable gift techniques and strategies.
• Certified Divorce Financial Analyst: The CDFA designation is growing in popularity because it helps financial and legal professionals support clients going through or managing assets after divorce. Those with this credential are trained to evaluate the tax implications of dividing property, settlement options for dividing pensions, marital property, awarding of child and spousal support and to help determine the financial needs and outcomes for couples after divorce.
• Certified Financial Planner (CFP) and Chartered Financial Consultant (ChFC): Advisors with either or both credentials have studied key financial planning topics in-depth, including risk management, tax planning, retirement and employee benefits, and estate planning, and insurance, to help develop well-balanced financial strategies for their clients.
• Certified Long-Term Care: The CLTC program is independent of the insurance industry and is designed to provide financial service professionals with expertise and tools to address long-term care planning with their clients.
• Certified Retirement Planning Counselor: A financial professional seeks the CRPC credential to learn the finer points of helping clients implement financial strategies to cover pre-and post-retirement needs, asset management, estate planning. Coursework touches on the entire retirement planning process using models and techniques from real client situations.
As you evaluate the expertise of an advisor, keep in mind that not all designations are equally rigorous. Each credential requires a different amount of work to obtain and maintain. Many of the designations above require a combination of coursework, one or more exams, a commitment to ongoing education and/or a pledge to maintain ethical standards.
That being said, a designation alone does not mean an advisor is the right fit for you. A professional’s education background is one factor to consider when deciding who has the right level of expertise and experience that matches what you’re looking for. For more designation explanations, check out Finra’s website at finra.org/investors/professional-designations. Finra is a key regulator of the financial services industry.
Robert A Bonfiglio, CFP, ChFC, is a private wealth advisor and CEO at Rise Private Wealth Management, a private wealth advisory practice of Ameriprise Financial Services Inc. in Bedford.