If you’re interested in learning about the financial services industry, you may have noticed there’s quite a bit of jargon out there. The sheer amount of industry terms and acronyms that go along with them can be overwhelming. That’s why we’re going to clear up some things you may run into somewhere along your finance journey.
The topic for today’s post is professional designations in the financial services. If you’re planning on becoming a financial professional, or you’re just looking for advice, you may find various certifications or charters. There are quite a few different types of these credentials, which can make it confusing and frustrating to find the right financial professional for you. To aid you in this process we’ll discuss four of them–the CFP, CFA, CLU, and ChFC–and before you know it, you won’t be shouting four-letter words over these three-letter acronyms.
Certified Financial Planner
The Certified Financial Planner (CFP) is perhaps the most widely recognized designation in the industry. Those who wish to be awarded a CFP must have at least a bachelor’s degree as well as have completed required coursework in financial planning or another accepted financial designation. Candidates must also have at least three years of professional experience, or two years of apprenticeship experience. If they meet these qualifications, then they can take the CFP exam, a three-day test on a variety of financial service topics. If they pass the test, attend continuing education, and adhere to the CFP ethics requirements, the candidates are awarded the CFP designation from the Certified Financial Planner Board of Standards, Inc.
Generally, financial professionals with this designation offer fee-based services and work in the tax, legal, and investment professions.
Chartered Financial Analyst
The Chartered Financial Analyst (CFA) designation is a prestigious certification of a financial analyst’s competence and integrity. To qualify for a CFA charter, candidates must have four years of professional experience, a bachelor’s degree, or a combination of work experience and education totaling four years. Qualified candidates must then pass three levels of exams, which generally takes four years to complete. They are then awarded a charter from the CFA Institute.
Individuals who hold a CFA charter generally work as portfolio managers or financial analysts.
Chartered Life Underwriter
While the CFP and the CFA have a broader scope in financial services, the Chartered Life Underwriter (CLU) is designed for individuals specializing in life insurance, estate planning, and business planning. The CLU is an older designation with its inception dating back to the 1920s and is widely respected in the financial services world.
Individuals wishing to acquire the CLU designation must complete a curriculum of five core courses as well as three elective courses, with each course culminating in a two-hour exam. The CLU is then awarded to successful candidates by The American College.
Chartered Financial Consultant
The Chartered Financial Consultant (ChFC) is similar to the CFP designation in that those who hold the certification have studied classes in financial matters.
The requirement to be considered for the ChFC program is three years professional experience. Those who qualify must complete seven required courses and two electives. The ChFC designation is then conferred to the successful candidate by the American College. The main distinction between this credential and the CFP is a board examination is not required to receive a ChFC.
Hopefully these explanations were helpful in your quest for more knowledge of financial services. If you enjoyed this post and would like more information on finances and the industry, subscribe to our blog by providing your name and email address to the boxes on the right-hand side of the page.
Sources:
https://www.investopedia.com/terms/c/cfp.asp
https://www.investopedia.com/articles/professionaleducation/08/cfp-clu-chfc.asp
https://www.investopedia.com/terms/c/clu.asp
https://www.investopedia.com/terms/c/cfa.asp
https://www.investopedia.com/terms/c/chartered-financial-consultant-chfc.asp
