The Top 10 Financial Certifications - SmartAsset (2023)

The Top 10 Financial Certifications - SmartAsset (1)

When you’re searching for a financial adviser, you’re likely to encounter an assortment of initials after each financial professional’s name. Some of the most common are CFP, CFA and CPA. These letters signify different financial certifications, which are signifiers of expertise in a certain area of the financial space.Financial certifications are signifiers of expertise in a certain aspect of the financial industry. Advisors seeking a certification typically need to complete hours of coursework and then pass an exam. They also need to abide by professional ethics standards in most cases. Holders of certifications may also need to take continuing education courses in order to maintain their knowledge as well as their certification.

1. Certified Financial Planner (CFP)

Certified financial planners (CFPs)are well-versed in topics across the financial field. They assess their clients’ full financial portfolio and then provide personalized financial plans. To become a CFP, a professional must complete a set of courses, then pass a seven-hour test. The test is administered by the CFP Board, and the pass rate is below 70%, which illustrates how stringent the requirements are.

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2. Certified Public Accountant (CPA)

A CPA license is for accountants, tax preparers and financial analysts. It is one of the more widely recognized financial certifications in the industry. This certification is administered by the American Institute of CPAs (AICPA). It requires 150 hours of coursework and then passing a rigorous exam. A CPA can be helpful for those looking for financial advice regarding reducing taxes and organizing investments.

3. Chartered Financial Consultant (ChFC)

The ChFCcertification was created as an alternative to the CFP certification. The program offers specialties beyond the CFP’s essentials. A charted financial consultant is who you should work with if you have a niche need, such as financial planning for divorce or small business planning. The course is run by the American College of Financial Services and requires four months of study and testing.

4. Chartered Financial Analyst (CFA)

The Top 10 Financial Certifications - SmartAsset (2)

A CFA, or chartered financial analyst, is an expert in investments and securities. The certification is administered by the CFA Institute, which calls the CFA credential “the most respected and recognized investment management designation in the world.” The program requires candidates to master 10 investment topics and also pass three levels of rigorous exams. Working with a CFA is an excellent choice if you are looking for an investment manager.

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5. Chartered Investment Counselor (CIC)

A CIC is a subset of the CFA designation specifically for those working in investment counseling and portfolio management. To be eligible to earn a CIC designation, a candidate must be working at an Investment Adviser Association-member firm and have at least five years’ experience. Candidates also need character and professional references and to work as a fiduciary. You should seek a CIC if you have a large portfolio and need an experienced, high-level expert to manage your investments.

6. Financial Risk Manager (FRM)

An FRM is a risk-management specialist. Holders of this certification are likely to be found working in banks as risk analysts. They can also deal with private clients needing investment advice. To earn an FRM, candidates must pass a two-part, eight-hour multiple choice test administered by the GARP. Thepass rates are often below 50%.

7. Chartered Life Underwriter (CLU)

A CLU is the best certification for insurance agents. There is no comprehensive exam, but candidates have to take eight courses administered by the American College of Financial Planning. Chartered life underwriters are experts in life insurance, estate planning and risk management.

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8. Chartered Alternative Investment Analyst (CAIA)

The CAIA is for professionals managing alternate investments, such as hedge funds and real assets. The charter program, run by the CAIA Association, takes about a year to complete and includes coursework as well as exams. If you are interested in putting some of your portfolio into alternate investments, these are the experts to work with.

9. Chartered Mutual Fund Counselor (CMFC)

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If you are looking to invest specifically in mutual funds, you may want to work with a charted mutual fund counselor. Holders of this designation are experts in mutual funds. To become a CMFC, candidates must complete a 10-week course and then pass exams administered by the College for Financial Planning. Coursework specifically prepares designees to understand the complexities of the field of mutual funds and other packaged investment products.

10. Certified Management Accountant (CMA)

A CMA is an expert at management accounting. These individuals often work on the corporate side, rather than in a private accounting practice. They use their skills in both accounting and management to make strategic financial business decisions. The IMA administers the CMA exam, which has two parts and tests for 11 financial competencies.

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Bottom Line

It’s important to consider an advisor’s certifications when you’re deciding who to work with. Financial certifications are indicative of a financial advisor’s area of expertise and level of education. For instance, if you need tax advice you might consider working with a certified public accountant. If you’re looking to create a comprehensive financial plan, consider working with a CFP or ChFC.

Tips for Finding a Financial Advisor

  • Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • One important qualification that doesn’t show up as letters after the name? Fiduciary status. A fiduciary financial advisor is one who’s legally obligated to always act in your best interests. “Do you abide by fiduciary duty?” should be the first question you ask.

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Danielle Klimashousky Danielle Klimashousky is a freelance writer who covers a variety of personal finance topics for SmartAsset. She is an expert on topics including credit cards and home buying. Danielle has a BA in English from Wesleyan University.


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