Superior client service requires staying well informed on a multitude of topics. The state of the economy, fiscal & monetary policy, as well as tax law reform, all impact your chances for success and the probability that you will reach your financial goals. In this current social and economic landscape, this is not an easy task!
In my opinion, a proper education and being part of a network that supports you, is how this is achieved. As you know, I have earned several designations during my career. More than just letters, these represent the highest levels of accreditation available in our industry. Earning them required not only extensive time but also the devotion and focus necessary to obtain a single long-term goal. It is a sacrifice that many others are not willing to make.
For your reference, I have included a summary of the certifications that I currently hold. As of the date of this article, I am progressing though the requirements to obtain my CFA Charter and have successfully completed the level 1 exam. I hope you find this informative, and I encourage you to pursue your interests no matter how daunting the task may be.
CPA – Certified Public Accountant
All CPAs are accountants, but not all accountants are CPAs. Broadly speaking, an accountant is any person who records and interprets accounting records. Many people may be able to do this, but far fewer people can pass the additional requirements of becoming a licensed CPA.
To become a licensed CPA requires holding a bachelor’s degree from an accredited university, having at least two years of work experience in public accounting, passing the uniform CPA exam, and fulfilling any other requirements set forth by the state’s board of accountancy.
A CPA is qualified to manage many different levels of engagements, including tax preparation, tax planning, accounting/bookkeeping, payroll, auditing, and consulting services. CPAs typically work for major corporations, nonprofits, government agencies, or some even start public practices of their own.
Maintaining this license requires completing annual Continual Professional Educational requirements (CPE), including ethical training, and maintaining the standards set by the governing organization.
PFS – Personal Financial Specialist
A PFS certification is available only to CPAs who are members of American Institute of Certified Public Accountants (AICPA).
To obtain the PFS designation you must be a CPA in good standing, have a specified level of work experience and sufficient knowledge in the field of study to pass a comprehensive examination.
Due to their extensive tax knowledge, an individual with a PFS credential has the unique ability to offer a vast menu of services to their clients which includes investment strategy, retirement planning, risk management & Insurance analysis, education planning, trust & estate planning, as well as other areas involving personal finances.
Maintaining this license requires completing annual Continual Educational requirements (CE), including ethical training, and maintaining the standards set by the governing organization.
CFP® – Certified Financial Planner
For more than 30 years, CERTIFIED FINANCIAL PLANNER™ certification has been the standard of excellence for financial planners.
To obtain the CFP designation a candidate must complete the following requirements:
The Education Requirement
The two-part education requirement includes both (1) completing coursework on financial planning through a CFP Board Registered Program, and (2) holding a bachelor’s degree or higher (in any discipline) from an accredited college or university.
The Exam Requirement
Passing the CFP® exam demonstrates that the candidate has attained the knowledge and competency necessary to provide comprehensive personal financial planning advice. The CFP® exam is a 170-question, multiple-choice test that consists of two 3-hour sessions over one day. The exam includes stand-alone and scenario-based questions, as well as questions associated with case studies.
The Experience Requirement
The experience requirement prepares the candidate to provide personal financial planning to the public without supervision. The candidate can fulfill the experience requirement either before or after taking the exam. The candidate will need to complete either 6,000 hours of professional experience related to the financial planning process, or 4,000 hours of apprenticeship experience that meets additional requirements.
The Ethics Requirement
The ethics requirement is the final step to the CFP® certification. It indicates the candidate agrees to adhere to high ethical and professional standards for the practice of financial planning, and to act as a fiduciary when providing financial advice to the client, always putting their best interests first.
Typically, a CFP will review a client’s financial situation and through a collaborative effort, develop a plan based on the client’s goals and constraints. This could include investment strategy, retirement planning, risk management & Insurance analysis, education planning, trust & estate planning, as well as other areas involving personal finances.
Maintaining this license requires completing annual Continual Educational requirements (CE), including ethical training, and maintaining the standards set by the CFP Board.
AIF® – Accredited Investment Fiduciary
Accredited Investment Fiduciary® (AIF®) Training prepares investment professionals and those managing investments on behalf of others to carry out their fiduciary responsibilities.
An AIF has completed a course on ethical behavior and fiduciary services, which means that the AIF is better suited to balance their business interests with a client first, or fiduciary, approach.
The examination is a timed, closed-book assessment of the Prudent Practices and methodology, as well as their proper application. It consists of eighty (80) multiple choice questions with a time-limit of one hundred twenty (120) minutes.
CFA – Chartered Financial Analyst
The CFA charter is one of the most respected designations in the finance industry and is generally considered the gold standard in the field of investment analysis.
To become a CFA, candidates need to pass three very difficult exams, have a bachelor’s degree from an accredited university, and need at least four years of relevant professional experience. As of 2021, there are fewer than 200,000 people with this certification worldwide.
Individuals with this designation typically work for investment banks, investment companies or professionally manage portfolios for clients.
Maintaining this license requires completing annual Continual Educational requirements (CE), including ethical training, and maintaining the standards set by the CFA Institute.