Financial Advisor Designations

There are countless different designations/certifications that financial advisors can get. Even though I am in the industry, I feel like I regularly see other professionals with designations/certifications that I am unfamiliar with.

What is a designation?

Designations are titles that show a professional has gone through a particular certification process. The process may involve various education, testing, experience, and ethical requirements. Designations are often displayed as letters behind a professional’s name. They can be thought of similarly as college degrees – they are typically not required, but may be recommended and expected.

Why do financial advisors get designations?

Financial advisors spend a meaningful amount of time, money, and effort to obtain professional designations for several reasons:

• Learning. The education and testing requirements can be a great way to learn more about a field, such as financial planning, investment analysis, or accounting.

• Marketing. Obtaining a designation can show prospective clients or employers in the industry that the professional is knowledgeable and committed to their craft.

• Substitute for licenses. In certain circumstances, designations can substitute for required licenses. For example, in Virginia, the Certified Financial Planner (CFP®) designation can substitute for certain securities examinations.

Popular designations for financial advisors

As mentioned, there are numerous designations that financial advisors can get. Some of these designations can get very specialized and not many people have them. However, there are several designations that are very popular and common in the industry, including:

• Certified Financial Planner (CFP®)

• Chartered Financial Consultant (ChFC)

• Personal Financial Specialist (PFS)

• Chartered Financial Analyst (CFA)

It’s good to see designations, but they aren’t everything

I am in favor of financial advisors getting designations. A designation shows an advisor’s seriousness and commitment to the profession.

However, just because an advisor has a designation, it doesn’t mean that they are immediately “hire-able.” You will still need to investigate to make sure that their business model and expertise are the right fit for you.

Similar to college or any other type of degree or program, there are always those who can study for the test without wanting to truly become an expert in their field. I’ve even heard people in the industry suggest that newcomers should quickly get a more obscure designation, that can be obtained easily, just so that they can quickly “get letters behind their name.”

Again, I am in favor of designations, but they shouldn’t exempt an advisor from being interviewed further.

If you have any comments, questions, or ideas for future posts, please let me know

I hope you found this post helpful and educational. If you have any comments, questions, or ideas for future posts, please let me know. You can reach me directly via email at crawford@ulmerfinancial.com.