Something that confuses investors are the professional designations that are displayed by the various practitioners in the ‘money business’. I thought I would maybe give a run-down of a few of the most common ones and explain briefly what they are. Next week I am going to discuss the RIA (Registered Investment Advisor) registration in detail, as there has been much controversy about it in recent months.
CFP – Certified Financial Planner
Someone who is qualified to provide a broad range of financial advise and can write a complete financial plan.
CLU – Chartered Life Underwriter
Specialist in life insurance.
ChFC – Chartered Financial Consultant
Similar to a CFP, but with a strong emphasis in insurance.
CPA – Certified Public Accountant
Provides accounting and audit services. Is one of only a few groups that can represent an individual before the IRS (enrolled agents and tax attorneys also can).
PFP – Personal Financial Planner
Similar to a CFP.
CFA – Chartered Financial Analyst
Someone who is certified to do analysis of securities. Most professional securities analysts have either a CFA designation, or get their college MBA (Masters of Business Administration).
RIA – Registered Investment Advisor
An RIA is not a professional certification, though most states require passing an exam to prove they have knowledge about investments. An RIA is rather a legal designation about how an individual is required to represent their client’s interests. Usually an RIA will also have a professional designation as well, whether it’s a CFP, CPA, CFA or MBA. I will discuss this at length next time.
There are many other designations, but these are the most common ones in the US. Hope that helps to understand a little of what all those letters after people’s names mean.