Before you hire any professional, it’s essential to consider their qualifications to ensure they have the proper education and experience for your individual circumstances. Since financial professionals have varying degrees of formal education and experience, it’s even more important to do your homework when researching financial advisors and coaches.
You’ll find that many financial advisors and coaches have chosen to earn financial certifications to demonstrate their knowledge and dedication to helping their clients achieve their financial goals.
What is a Financial Certification?
A financial certification is a professional designation administered and awarded by a credentialing organization to individuals who meet particular prerequisites, complete the required coursework, pass examinations, and agree to uphold ethical standards.
A financial certification is not the same as a license or registration requirement for financial advisors like those overseen by the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC).
Financial professionals will generally display their earned certifications in abbreviated form following their name on business cards and in online directories like LinkedIn and Wealthtender. While a few letters after their name may look impressive, it’s essential to understand what each certification they hold represents, how it applies to their work and which designations will be most valuable when they’re working with you.
Should You Hire a Certified Financial Planner?
What are the Best Financial Certifications?
The simple answer is there’s not a single best financial certification as each has its own merits. Depending upon your individual circumstances and financial situation, certain professional designations will be more relevant to your unique financial planning needs.
Among the more than 100 financial certifications offered by a diverse range of credentialing organizations, you’ll find several widely held professional designations and many lesser-known certifications in specific areas of specialization.
For example, the Certified Financial Planner (CFP) certification ranks among the most popular and highly respected professional designations financial advisors hold. In contrast, the Accredited Financial Counselor (AFC) certification is considered by many to be the premier designation held by financial coaches and counselors.
You’ll also recognize certain financial certifications as being quite specialized simply by their name. For example, the Certified Divorce Financial Analyst (CDFA) designation is earned by financial professionals specializing in understanding common and complex financial issues that arise during a divorce. Or the Certified Exit Planning Advisor (CEPA) designation earned by financial professionals who help business owners implement a strategy to maximize the value of their business in preparation for its sale.
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Financial Certifications List
We prepared the list of financial certifications below with a brief description of each, plus links to in-depth articles if you want to learn more about a particular designation.
Comprehensive financial planning
Investments and portfolio management
Retirement income and Social Security
Tax and accounting
Insurance and long-term care
Estate, philanthropy and business owners
Life events and special situations
Financial counseling and coaching
No designations match your search. Try a broader term like “retirement” or “tax.”
How Much Does a Financial Advisor Cost?
Frequently Asked Questions
What is the difference between a financial certification and a license?
A financial certification is a voluntary credential awarded by a private credentialing organization to professionals who meet its education, exam and ethics requirements. A license or registration is a legal requirement to sell securities or insurance or to give investment advice for a fee, and it is overseen by regulators such as FINRA, the SEC, state securities regulators and state insurance departments. Many advisors hold both, but a certification does not replace a license.
How can I verify that a financial advisor actually holds a certification?
Most issuing organizations offer a free online lookup of current certificants, so you can search the advisor’s name on the issuer’s website. FINRA’s Professional Designations database lists each credential’s issuer, prerequisites and continuing education rules, although FINRA notes that it does not approve or endorse any designation. To check licenses, registrations and disciplinary history, use FINRA BrokerCheck or the SEC’s Investment Adviser Public Disclosure site.
Is the CFP the best certification for a financial advisor?
No single certification is best for every situation. The Certified Financial Planner (CFP) is widely recognized for comprehensive planning and requires education, a comprehensive exam, work experience and a commitment to act as a fiduciary when providing financial advice. Specialty credentials can signal deeper expertise in areas such as divorce, retirement income, college funding or taxes, so the right fit depends on what you need help with.
Do financial certifications expire or need to be renewed?
Most reputable certifications must be maintained through continuing education, an ethics commitment and periodic renewal fees. For example, the Investments and Wealth Institute requires 40 hours of continuing education every two years for its CIMA and CPWA certifications, and the Accredited Investment Fiduciary requires 6 hours each year. A credential that has lapsed should not be displayed, which is another reason to confirm current status with the issuer.
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About the author
Founder & CEO and Editor-in-Chief, Wealthtender
Brian Thorp is the founder and CEO of Wealthtender and its Editor-in-Chief. With more than 25 years in the financial services industry, he is applying his experience and passion at Wealthtender to help more people enjoy life with less money stress.
Brian and his wife live in Austin, Texas.