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Are you preparing to hire a financial advisor, planner, coach or counselor? Before you hire a financial professional, it’s important to consider their qualifications to ensure they have the right education and experience for your individual circumstances.
Unlike the medical and legal professions that require years of study and advanced degrees among other rigorous requirements before someone can claim to be a doctor or lawyer, financial professionals have varying degrees of formal education and experience which means it’s even more important to do your homework when researching who you’ll hire.
You’ll find that many financial professionals 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 certain prerequisites, complete required coursework, pass examinations and agree to uphold ethical standards.
A financial certification is not the same as a license or registration requirement like those for financial advisors overseen by the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC).
Financial professionals will generally display the certifications they’ve earned 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 important to understand what each certification they hold represents, how it applies to their work and which designations will be most useful when they’re working with you.
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 along with many lesser known certifications in very specific areas of specialization.
For example, the Certified Financial Planner (CFP) certification ranks among the most popular and highly respected professional designations held by financial advisors, while 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 who specialize 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.
If you’re interested in learning more about a financial certification not listed below, please email firstname.lastname@example.org and let us know. We regularly update this list when we publish in-depth articles about financial certifications and your feedback helps us prioritize the articles we’ll write next.
Accredited Asset Management Specialist (AAMS)
An Accredited Asset Management Specialist (AAMS) is a designation for financial professionals who specialize in asset management and investments. Administered by the College for Financial Planning, the AAMS provides them with the extensive knowledge they need to assess and recommend a variety of investment opportunities.
Those who hold an AAMS often support clients with retirement, college, and taxes so they can meet their long-term financial goals.
Accredited Financial Counselor (AFC)
An Accredited Financial Counselor (AFC) is a financial professional who teaches their clients sound financial principles so they can achieve their short and long-term financial goals.
AFC certification is earned through a combination of experience and educational requirements set forth by its issuing organization, the Association for Financial Counseling and Planning Education (AFCPE).
The AFC curriculum helps candidates become experts on topics such as budgeting, debt management, mortgages, estate planning, retirement, stocks, bonds, mutual funds, and personal income taxes. The curriculum also ensures candidates are well-versed in consumer debt and gain a strong understanding of financial counseling, consumer fraud, and debt reduction strategies. And deeply personal and emotional topics including bankruptcy and divorce-related financial issues like child support are also covered.
Certified Divorce Financial Analyst (CDFA)
Certified Divorce Financial Analysts (CDFA) help people going through a divorce (and their lawyers) understand how their financial decisions will impact their future finances. This credential is issued and overseen by the Institute for Divorce Financial Analysts (IDFA), which has been around since 1993 and offers specialized training to accounting, financial, and legal professionals in pre-divorce financial planning.
Certified Exit Planning Advisor (CEPA)
The Certified Exit Planning Advisor (CEPA) is a unique designation for financial professionals who advise business owners on how to successfully sell or transition their business, a strategy referred to as ‘exit planning’. It was created in 2007 by the Exit Planning Institute (EPI), a company focused on educating professional advisors globally on how they can support the success of business owners to maximize value and sell on their terms through a business transition.
Certified Financial Planner (CFP)
A Certified Financial Planner (CFP) is a well qualified financial professional who use a variety of strategies to help their clients. CFPs often analyze a client’s current situation and prepare a number of financial reports that show essential figures like net worth. CFPs may also assist with investment planning, insurance planning, estate planning, income tax planning, and retirement planning.
While many other professional designations concentrate in investment management, the CFP focuses on holistic financial planning. In addition, CFPs stand out because they must abide by a strict standard of fiduciary duty, meaning they are required to put their clients’ best interests ahead of their own. They can’t buy financial products for clients for the sole purpose of earning high commissions.
To earn a CFP, financial professionals must complete certain education and experience requirements as well as pass a rigorous exam that is distributed by the CFP Board.
Certified Financial Therapist
A Certified Financial Therapist is a mental health or financial professional certified by the Financial Therapy Association for their education and experience in the areas of financial therapy, financial planning, counseling and therapeutic competencies. Those who hope to earn a Certified Financial Therapist-I (CFT-I) certification must fulfill certain requirements set forth by the Financial Therapy Association.
Certified Financial Transitionist (CeFT)
A Certified Financial Transitionist (CeFT) helps clients navigate through major life events and the financial implications that come with them. Created by the Financial Transitionist Institute, the CeFT is only available to established professionals in the financial industry.
CeFT holders are financial professionals who understand how life transitions change financial situations. They have also received at least one other highly respected designation such as the CFP, CIMA, ChFC, CDFA, CPWA, CPA/PFS, or CFA.
Certified Investment Management Analyst (CIMA)
The Certified Investment Management Analyst (CIMA) is for financial professionals who would like to stand out as advanced investment consultants. Issued by the Investments and Wealth Institute, it focuses on topics such as risk measurement, asset allocation, due diligence, and investment policy.
CIMA holders have completed an education program at a top-tier business institution such as the University of Chicago Booth School of Business, the Wharton School, University of Pennsylvania, and Yale School of Management.
Certified Kingdom Advisor (CKA)
A Certified Kingdom Advisor (CKA) offers financial services with a Christian perspective to help clients plan their finances in accordance with Christian values. The CKA designation is issued by Kingdom Advisors, an organization that offers training and a community to financial professionals interested in integrating Christian faith and practice.
CKAs are specifically trained to apply biblical wisdom and abide by the Kingdom Advisors Code of Ethics. Clients who work with a CKA can gain a deep understanding of what God hopes they’ll accomplish and how they can go about fulfilling God’s wishes.
Certified Money Coach (CMC)
A Certified Money Coach (CMC) pairs “psychological principles, universal spiritual beliefs, and practical financial guidance” to support their clients. Their ultimate goal is to help people from all walks of life change their relationship with money.
They focus on money coaching, which can lead to “fulfilling purposeful, and prosperous” lives.
Certified Personal Finance Consultant (CPFC)
A Certified Personal Finance Consultant (CPFC) provides financial advice for clients in one-on-one settings. The certification is administered by Fincer, available in English and Spanish, and specifically designed for professionals who provide money coaching, budget counseling, and credit counseling.
CPFCs are highly trained to coach clients on a one-on-one basis. They know how to help them create budgets, get out of debt, and set financial goals.
Chartered Alternative Investment Analyst (CAIA)
A Chartered Alternative Investment Analyst (CAIA) is an internationally recognized credential. It’s specifically designed for financial professionals who manage, analyze, or regulate venture capital, private equity, hedge funds, real estate, and other alternative investments.
Oftentimes, CAIAs work as portfolio managers, analysts, consultants, brokers, risk managers, and traders.
Chartered Financial Analyst (CFA)
A Chartered Financial Analyst (CFA) is a globally recognized and respected designation for financial professionals who would like to develop their expertise in investment management. It’s administered by the CFA Institute, which is an international organization that strives to promote knowledge and financial literacy in investments.
With a CFA designation, financial professionals gain the knowledge and skills needed to succeed in finance, banking, and securities. Its curriculum was specifically designed to reinforce a variety of important investment principles.
Chartered Financial Consultant (ChFC)
The Chartered Financial Consultant (ChFC) designation is administered and awarded by the American College of Financial Services in Bryn Mawr, Pennsylvania, it’s similar to the Certified Financial Planner (CFP).
The ChFC is available to any financial professional who wishes to help clients with complex situations. Those who pursue the ChFC will be required to complete an education component, which consists of eight college-level courses. These courses include similar topics to the ones found in CFP education such as retirement, insurance, taxation, and investing.
Chartered Life Underwriter (CLU)
The Chartered Life Underwriter (CLU) is a certification for financial professionals who specialize in life insurance as it relates to estate planning and business planning. It involves an extensive educational program that covers topics such as insurance, annuities, risk management, and more.
The CLU is one of the oldest designations as it’s been around since the late 1920s when The American College made its debut.
Personal Financial Specialist (CPA / PFS)
The Personal Financial Specialist (PFS) is a designation for licensed Certified Public Accountants (CPAs) who wish to provide financial planning services to their clients. Designed by the American Institute of Certified Public Accountants (AICPA), the PFS allows CPAs to go beyond their traditional duties and help others plan for their futures.
About the Author
About the Author
Brian is CEO and founder of Wealthtender. He and his wife live in Texas, enjoying the diversity of Houston and the vibrancy of Austin.
With over 25 years in the financial services industry, Brian is applying his experience and passion at Wealthtender to help more people enjoy life with less money stress.
Disclaimer: The information in this article is not intended to encourage any lifestyle changes without careful consideration and consultation with a qualified professional. This article is for reference purposes only, is generic in nature, is not intended as individual advice and is not financial or legal advice.