Know Your Dough

Alphabet Soup: Financial Designations

Last week, we went over some of the acronyms that make up the alphabet soup of retirement planning. This week, we decided to cover some of the certifications that make up the alphabet soup of financial professionals.

This is not a comprehensive list by any means, and you may find people with more than one of these acronyms on a business card, but of one thing you can be certain: the people who have earned these designations underwent a thorough curriculum to earn the letters after their name, and most must complete continuing education in order to maintain them, meaning their knowledge is kept in check over time.

CFP® – A Certified Financial Planner® is an individual who has undergone rigorous testing and experience requirements in order to gain this certification. They are tested in detail on all facets of financial planning including investments, retirement planning, education planning, life insurance, property and casualty insurance, estate law, income taxes, etc. A CFP® is a similar certification to the CPA (Certified Public Accountant) of the accounting world. These people know a lot about a lot of different topics.

CPA PFS – This is a Certified Public Accountant who has gone beyond the CPA designation to become a Personal Financial Specialist, learning more about financial planning in order to assist their clients.

CFA – A Chartered Financial Analyst has spent a lot of time studying, gaining work experience, and taking 3 difficult examinations to become an demonstrate their knowledge in professional and ethical standards, investment analysis, and portfolio management – among other topics. Generally, these professionals work in institutional money management providing stock analysis, but your financial planning professional may very well carry this charter or work with someone who does.

CLU – Chartered Life Underwriters are insurance professionals who have completed coursework and examinations to demonstrate their knowledge in insurance planning, life and health insurance, insurance law, estate planning, business insurance, and risk management.

As always, if you have any questions about any of these designations or any that I didn’t mention, please feel free to email us at info@iomechallenge.org.

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