Financial Advisor Designations- Which Ones Matter?
I am reading an article right now and the title is What’s a Financial Planner? As I’m reading the article, the body of the article is not what I expect, but it is prompting me to write this newsletter. The first sentence says: “The financial advice industry has 212 reasons to be confused.” This is based on 212 financial advisor designations. I did not know there are that many designations someone in our industry can get and I can see how investors get confused by what some credentials actually mean. And, I see later in the article that there is a website called Designation Depot which allows financial advisors to receive credentials without even having to study or test for the designations. So, which designations matter? Between the five of us at Windsor Wealth we hold a few designations that this industry considers to be at the top of the tier.
Carlos Dominguez & Christina Jones: CFP®
- From the CFP.net website: “CERTIFIED FINANCIAL PLANNER™ certification is the stand of excellence in financial planning. CFP® professionals meet rigorous education, training, and ethical standards, and are committed to serving their clients’ best interests today to prepare them for a more secure tomorrow.
- Based on the article I’m reading, the CFP® designation is “the best-known appellation.”
- The CFP® designation requires applicants to pass nine module tests on subjects including insurance, retirement plans, estate planning, taxes, investment planning, financial plan development etc. before sitting for the six-hour exam.
- As a CERTIFIED FINANCIAL PLANNER™ professional, we are held to a strict standard of fiduciary duty, meaning we must put your financial best interests ahead of our own interests.
- CFP® professionals are also required to complete thirty hours of continuing education every two years with two hours specific to ethics.
- Of the estimated 218,000 financial advisors from 2020, only 89,000 are CFP® Professionals- roughly 40%.
- Forbes quotes the CFP® as being the number one designation your financial advisor should have.
John Lilly: AAMS, CPFA, & APMA
- The AAMS designation is the Accredited Asset Management Specialist and the education “provides advisors with the strong fundamental financial knowledge with a specific focus on asset management and investments.” From the College of Financial Planning website. As an AAMS you must agree to comply to a code of ethics and complete sixteen hours of continuing education every two years.
- The CPFA is the Certified Plan Fiduciary Advisor. From the napacpfa.org website, “Plan advisors who earn their CPFA demonstrate the expertise required to act as a plan fiduciary or help plan fiduciaries manage their roles and responsibilities. This designation gave John the expertise needed to work as a fiduciary with retirement plans and requires ten hours of continuing education each year.
- The APMA designation is the Accredited Portfolio Management Advisor from the College of Financial Planning. This is an 11-module course with a final exam at the end. From the College of Financial Planning website, an APMA® is “educated on the finer points of portfolio creation, augmentation, and maintenance.” This designation also requires sixteen hours of continuing education every two years.
Brooke Cantrell: CFP® Candidate
- Brooke has completed the multiple modules required to sit for the CFP® exam. She passed the CFP® exam in November of 2020 and is now working on her experience requirement. Once she has 2 years of experience, or four thousand hours, of working with another CFP® professional (Carlos and I) she will officially become a CERTIFIED FINANCIAL PLANNER™
- Brooke will be part of the 5.6% of CFP® Professionals aged 20-29.
Bobbie Denton: FPQP™
- Bobbie is a Financial Paraplanner Qualified Professional™ which means she has the credentials from the College for Financial Planning to support CFP® professionals. She had to go through 10 modules of work and a 75-question test to receive the credentials. Bobbie is also required to complete sixteen hours of continuing education every two years as well.
As you can see each team member at Windsor Wealth has the credentials so that we can best serve you, our clients. As we sought out for our designations, we found ones that we felt would improve us as financial advisors and that would create a better experience for our clients. We have all received designations that required rigorous study work, testing to acquire the designation, and continuing education so that we are always improving as your financial advisor. And while these designations are over and above the required licensing that we had to achieve; we feel that they were imperative so that we could best serve our clients.
- College of Financial Planning: com/wealth.management
- CFP: net
- FINRA: org/investors/professionals-designations/cpfa
- Financial Planning magazine, Investing in Advisors, May 2021: What is a financial planner?
- CPFA: org
CFP® Candidates have completed the education and exam requirements of the CFP® Board. CFP® Candidates still 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. Upon completion of the professional experience and ethical requirements, candidates can hold out the CFP® designation.