What Are Financial Certifications?

Financial certifications, aka 澳洲幸运5官方开奖结果体彩网:financial designations, are credentials 𒁏that investment and financial industry professionals use. Represented by a trio or duo of letters after a name, they indicate a degree of education/training and specialization on the part of the individual.

If you have trouble telling the difference between a CFA®, CFP®, CIC, ChFC, or any of the other financial certifications, you're not alone. How do you sift through this alphabet soup to find the best financial professional for you? Let's look at the nine most popular designations with a brief explanation of the education and expertise each designation signifies and the kind of work done by the professionals holding them.

Types of Financial Certifications

Certified Financial Planner (CFP)®

Those with the CFP® designation have demonstrated competency in all areas of financial planning. Candidates complete studies on dozens of topics, including stocks, bonds, taxes, insurance, retirement planning, and estate planning. The🎉 program is administered by tඣhe Certified Financial Planner Board of Standards Inc.

In addition to passing the CFP certification exam, candidates must also complete qualifying work experience and agree to adhere to the CFP board's 澳洲幸运5官方开奖结果体彩网:code of ethics, and 𝄹professional responsibility and financial planning standards.

A 澳洲幸运5官方开奖结果体彩网:financial planner works with individuals to help them understand their options and make financial decisions suited to their personal financial situation and goals. Because of the nature of their work, people place a good deal of trust in these individuals. The CFP board posts infoꩲrmation on the financial planning process and current licensees, which lets clients of CFPs verify if their financial planners' designations are in good standing. The last thing anyone needs is to choose a CFP whose certification has been revoked.

Chartered Financial Analyst (CFA)®

This designation is offered by the CFA Institute (formerly the Association for Investment Management and Research [AIMR]). To obtain the CFA charter, candidates must successfully complete a difficult three-part exam and gain at least 4,000 hours work experience over a minimum of three years, among other requirements. In passing these exams, candidates demonstrate their competence, integrity, and extensive knowledge in accounting, ethical and professional standards, economics, 澳洲幸运5官方开奖结果体彩网:portfolio management, and securities analysis.

CFA charter holders tend to be analysts who work in the field of institutional 澳洲幸运5官方开奖结果体彩网:money management and stock analysis, not financial pla🅠nning. These professionals provide reseaౠrch and ratings on various forms of investments.

Certified Fund Specialist (CFS)

As the name implies, an individual with this certification has demonstrated his or her expertise in 澳洲幸运5官方开奖结果体彩网:mutual funds and the mutual fund industry. These individuals often advise clients on which funds to invest in and, depending on whether or not they have their license, they will buy and sell funds for clients. The Institute of Business and Finance (IBF) has offered the 澳洲幸运5官方开奖结果体彩网:Certified Fund Specialist designation and training since 1988. The course focuses on a variety of mutual fund topics, including portfolio theory, dollar-co𒁏st averaging, and annuities.

The knowledge these CFS designees hold is kept current through their 澳洲幸运5官方开奖结果体彩网:continuing education requirements.

Chartered Financial Consultant (ChFC)

Individuals with the Chartered Financial Consultant (ChFC) designation have demonstrated their vast and thorough knowledge of financial planning. The ChFC program is administered by the American College of Financial Services. Candidates must complete an exam in financial planning, including 澳洲幸运5官方开奖结果体彩网:income tax, insurance, investment, and estate planning, and are required to have a minimum of three years of experience in a financial industry position.

Like those with the CFP designation, professionals who hold the ChFC charter help ♔individuals analyze th♍eir financial situations and goals.

Chartered Investment Counselor (CIC)

Given by the 澳洲幸运5官方开奖结果体彩网:Investment Adviser Association, CFA charter holders who are currently 澳洲幸运5官方开奖结果体彩网:registered investment advisors can study for this is a designation. The CIC program's focus is on portfolio management. Inಞ addition to proving their high-level expertise in portfolio management, CIC candid𝓀ates must also adhere to a strict code of ethics and provide character references.

Individuals who hold the CIC charter tend to be among the financial world's major players, such as those who manage large accounts and mutual funds.

Unfortunately, this designation is no longer offered. The organization only maintains the existing designations of those who already hold it.

Certified Investment Management Analyst (CIMA)

The Certified Investment Analyst (CIMA) designation focuses on 澳洲幸运5官方开奖结果体彩网:asset allocation, ethics, 澳洲幸运5官方开奖结果体彩网:due diligence, risk measurement, investment policy, and performance measurement. As this certification signifies a high level of consulting expertise, only individuals who are investment consultants with at least three years of professional experience are eligible to try for the CIMA. The Investments & Wealth Institute, formerly the Investment Management Consultants Association, offers CIMA courses.

Individuals who hold CIMA designations are required to prove their expertise through continual recertification, which requires CIMA designees to complete at least 40 hours of continuing education every two years.

CIMA designation holꦡders tend to have careers with financial consulting firms, which involve extensive interaction with clients and managing large accounts.

Chartered Market Technician (CMT)®

The CMT^® designation is granted by the New York-based CMT Association. The CMT is the highest level of training within the discipline of 澳洲幸运5官方开奖结果体彩网:technical analysis and is the preeminent designation for practitioners worldwide. Te꧅chnical analysis provides the tools to successfully navigate the gap between intrinsic value and market price across all asset classes through a disciplined, systematic approach to market behavior and the law of supply and demand.

Earning the CMT demonstrates mastery of a core body of knowledge of investment risk in portfolio management, including quantitative approaches to market research and rules-based trading system design and testing. CMTs likely would be employed in the sales ♔and trading departments of sell-side firms, as research analysts in firms that provide technical analysis to their clients, or working as portfolio managers and investment advisors.

Certifi🌜ed Public Accountant (CPA) and Personal Financial Specialist (PꦕFS)

A certified public accountant (CPA) is a designation🍨 provided to licensed accounting professionals. The CPA license is provided by the Board of Accountancy for each state.

Those holding the CPA designation have passed examinations in accounting and tax preparation, but their title does not indicate training in other areas of finance. So, those CPA holders who are interested in gaining expertise in financial planning in oꦚrder to supplement their accounting careers need to become certified as personal finance specialists (PFS).

The PFS designation is awarded by the to those who have taken additional training and already꧒ have a CPA designation.

Chartered Life Underwriter (CLU)

This designation is issued by the American College and those who hold it work mostly as insurance agents. The CLU designation is awarded to persons who complete a five-course program of study with exams. The course covers the fundamentals of life and 澳洲幸运5官方开奖结果体彩网:health insurance, pension planning, insurance law, in𒈔come taxation, investments, financial and estate planning, and group benefits.

Advantages and Disad🅠vantages of Financial Certifications

It's important to realize that not all certifications are created equal. While some, like the CPA, reflect a state-issued or -sanctioned license (allowing the person to legally practice or do certain activities), others are simply industry-awarded designations. They may indicate a certain degree of experience and education but aren't mandatory qualifications to work in the field.

While certifications are not everything, you should give extra credit to 澳洲幸运5官方开奖结果体彩网:investment professionals who have them. Mos♐t of these certifications require candidates to put in many hours of study 💝and meet high ethical and professional standards.

For instance, to get the CFA designation, candidates must normally put in a minimum 250 hours of reading per exam, and there are three exams to pass. The tests are so intensive that normally less than 40% pass the level 1 exam each time it's offered. Those who make it through all three levels to become charter holders are also bound by a code of ethics and rules of professional conduct, among other requiremen🍌ts.

Although all of these exams are intense and the hours can be lo♔ng, these designations𓄧 should be only one part of your criteria when deciding on a financial professional.

The Bottom Line

If you have to deal with a financial professional, it's important that you know the extent of his or her expertise in different areas of finance. Now you have an idea of what some of the designations mean and what they require from those who hold them.