Adviser Certifications – Buyer Beware of Financial Planner Certifications by Hammerle Finley Law Firm

Talk about alphabet soup. There are at least 200 different kinds of financial certifications used in the marketplace, and it seems like more are being added every day. As you would suspect, some certifications are more meaningful than others. Here are a few of the more popular ones.

A CFP (Certified Financial Planner) works with clients to evaluate their options and make financial decisions.  The certification is awarded through the Certified Financial Planner Board of Standards. Candidates must  complete studies on over 100 topics, pass a certification exam, have work experience and adhere to a code of ethics.

An RIA (Registered Investment Advisor) advises high-net-worth clients on investments and manages their portfolios. They must be registered with the SEC. No particular education or exam is required, although an RIA who charges an hourly or flat  fee to dispense advice must have a Series 65 license..

A CFA (Chartered Financial Analyst) usually works in the field of institutional money management and stock analysis. They are certified by the CFA Institute, which requires the 3 by 3 –  meaning candidates must pass 3 rigorous exams and have at least 3 years of work experience.

A CMA (Certified Management Accountant) works for an organization in the areas of accounting, corporate finance and risk management. They are accredited by the Institute of Management Accountants and must pass a two-part exam.

A CFS (Certified Fund Specialist) provides advice on mutual funds and may, with the appropriate license, buy and sell funds for their clients. They are certified by the Institute of Business and Finance and must take continuing education classes.

A ChFC (Chartered Financial Consultant) provide financial planning to individuals. They are given their designation by the American College and must complete an exam and have at least 3 years of experience in the financial industry.

A CIC (Chartered Investment Counselor) provides portfolio manager. They are given the designation by the Investment Counsel Association and qualify by basically being a CFA on steroids.

A CIMA (Certified Investment Management Analyst)  usually works for a financial consulting firm and works with clients on managing large amounts of money.  They are qualified by the Investment Management Consultants Association and must have at least 3 years of investment consulting experience.

A CPA (Certified Public Accountant) works with clients and must pass examinations for accounting and tax preparation.

A PFS (Personal Finance Specialist) works with individual clients. They earn the designation from the American Institute of Certified Public Accountants and must have a CFP designation.

A CLU (Chartered Life Underwriter) usually works as an insurance agent. The designation is given by the American College. A candidate must have completed a 10-course program of study and 20 hours of exams.

A CHFP (Certified Healthcare Financial Professional) certification is designed for mid-level healthcare professionals who have at least 3 years experience in healthcare provider operations.

Now for the bogus professional designations – there are a lot. FINRA(Financial Industry Regulatory Authority)  has an excellent website that decodes initials for consumers. FINRA also occasionally sends out alerts about some of the more egregious scam certifications.

Whatever your advisor’s credentials, just keep in mind that no certification guarantees competency or honesty.

Virginia Hammerle is a Texas attorney whose practice includes estate planningguardianship and probate. Sign up for her newsletter at Contact Hammerle Finley Law Firm to schedule a consultation at