Professional designations — those clumps of capital letters that often follow a financial advisor’s name — can sometimes look like alphabet soup. But they’re far from meaningless.
Take, for example, the gold standard of financial designations: CFP. Literally, it means “certified financial planner.” But for the people who earn that certification, it means three years of financial planning experience, months of study and a commitment to a strict moral code.
“These three letters, C-F-P, signify a commitment to excellence and a dedication to competent and ethical financial planning for clients,” said Kevin Keller, CEO of the CFP Board, which administers the certification. “When a financial advisor becomes a CFP professional, it sends a message to clients and potential clients that the advisor has met rigorous education, examination and ethical standards.”
But beyond CFP, there are plenty of other valuable designations. Just ask Ashley Folkes, the founder of Inspired Wealth Solutions in Birmingham, Alabama. Folkes is a CFP, a certified private wealth advisor (CPWA), a certified retirement planning counselor (CRPC), a retirement income certified professional (RICP) and a certified exit planning advisor (CEPA) — and he’s about halfway through the coursework to become an accredited estate planner (AEP).
“Designations create credibility,” said Folkes. “For me, I just truly believe that I need to keep learning and stay ahead of the curve for my clients. I think they deserve it.”
But even someone like Folkes can’t rest on his laurels. For many designations, keeping them requires dozens of hours of continuing education every few years. According to Keller, this is a matter of staying up to date — as long as the economy keeps evolving, wealth managers need to keep up.
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“Financial advisors must prioritize continuous learning to stay competitive, serve clients well, adhere to regulations and adapt to economic changes,” Keller said. “CFP professionals must meet continuing education requirements to maintain their certification. This means they can provide clients with the best advice for the current environment.”
So in terms of expertise, these letters mean a lot. The trouble is there’s so many of them — by FINRA’s count, there are 242 designations for financial professionals.
“They’ve just multiplied,” Folkes said. “There used to only be about 10 or 12 of them, and it’s just gone crazy.”
Not all these designations are equally essential. Here are six that all financial professionals — and their clients — should know: