When considering a career as a financial advisor, a person may believe that the job is all about numbers. He’ll soon discover, however, that the letters that follow his name on his business card, particularly those that designate the various financial advisor certifications he currently holds, are given a lot of weight and importance. Based on his area of expertise, a financial advisor can become certified in a variety of skill sets. Certified Financial Planner® (CFP®), Certified Public Accountant (CPA), Chartered Financial Analyst (CFA), and Chartered Life Underwriter are the most popular certifications (CLU).
A CFP® certified financial advisor has demonstrated that he is a well-rounded finance expert who understands all major aspects of the financial industry, particularly individual financial planning needs. He has successfully completed and passed an examination, has the required level of industry experience, and has the required educational background. In order to keep his CFP® financial advisor certification current and in good standing, he must complete ongoing continuing education requirements and periodic retesting.
CPA certification is given to a financial advisor who specializes in accounting and has completed the necessary education, experience, licensing, and examination requirements. A CPA prepares and files tax returns for individuals and businesses, as well as conducting subsequent tax audits. A person who has already been designated as a CPA may seek certification as a Personal Finance Specialist (PFS) from a financial advisor to demonstrate his knowledge of personal financial planning and taxes.
After three years of relevant accounting experience and passing three certification exams, an individual is awarded the CFA financial advisor certification. The certification is intended to demonstrate a thorough knowledge of accounting procedures, portfolio management, and investment analysis. Many people who have earned the CFA designation also have the Chartered Investment Counselor (CIC) designation. This supplemental financial advisor certification demonstrates that the individual has a deeper understanding of portfolio management standards and practices than the CFA requires.
CLU certifications are awarded to people who specialize in the financial aspects of various insurance and benefit policies. It entails a combination of study programs as well as a lengthy series of exams. Estate planning, life and health insurance, retirement planning, and investment management are all topics that a CLU-certified financial advisor can handle. Individuals seeking work in the insurance industry who will be dealing with the financial aspects of the industry are frequently required to have CLU certifications.