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7250 Heritage Village Plaza, Suite 101
Gainesville, VA 20155-3058
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The Alphabet Soup of Financial Designations

The “Wall Street Journal” cited CFA, CFP® and CPA as the “highly rigorous” and more difficult to earn professional credentials in the financial services industry in an article titled, “Is Your Advisor Pumping Up His Credentials?”  There are literally hundreds of designations and a mind-numbing array of letters of the alphabet that people place after their names.  Most of these designations have only minimal requirements compared to the truly rigorous ones.  Often, if the check you write to one of the organizations offering these designations clears, you get to place its letters after your name with little else required. 

Insight Wealth Management, Inc. (IWM) believes that investors and consumers of financial advisory services deserve to work with professionals who have demonstrated their competence and knowledge, and have met the most rigorous standards set by their peers and industry leaders.

It is important to consider the type of financial assistance you need.  Financial planning and investment management are two different services.  Financial planning provides a broad overview and assessment of many important areas.  If your needs are limited to a financial plan, a CFP® generalist alone can help.  If, however, you need more specialized services in investment management you should seek a professional who has demonstrated such expertise by earning the CFA designation.

Chartered Financial Analyst (CFA) is recognized globally as the leading, most thorough and respected credential an investment professional can earn.  Moreover, the CFA exams are cited frequently in lists of the most difficult to pass exams in the world

The CFA program consists of three, sequential exams at the graduate level that focus on investment analysis and portfolio management.  If your financial needs include investment management you should work with an advisor who has earned the CFA designation, or a firm with CFA Charterholders as part of the team that will serve your financial needs.  For more information on CFA, please visit the CFA Institute’s website.

CERTIFIED FINANCIAL PLANNER™ (CFP®) is the leading professional designation in financial planning.  It provides an undergraduate-level overview of key financial planning areas such as retirement, education, insurance, investments, tax, and estate planning among other subjects.  CFP® certification does not provide the depth of knowledge in estate planning that a licensed attorney would offer, the tax expertise of a Certified Public Accountant, or the investment skills of a CFA Charterholder.  However, having a CFP® certificant provide a broad, comprehensive financial plan is a good starting point for many people.  Read more at the Certified Financial Planner Board of Standards, Inc. website. 

Certified Public Accountant (CPA) is the most respected credential for tax and accounting professionals.  Some CPAs have also earned the Personal Financial Specialist (PFS) designation.  PFS is a respected, credible designation in financial planning available only to CPAs, and is similar in content and purpose to CFP® certification.

National Association of Personal Financial Advisors (NAPFA) is not a professional designation, but a professional association of CFP® certificants whom NAPFA has vetted to ensure that they are fee-only, fiduciary advisors.  CFP® certification is not limited to fee-only, fiduciary advisors.  Many commission-based (sales) and fee-based (commission and fees) advisors hold CFP® certification.  Holding CFP® certification is the first step required to join NAPFA.  NAPFA vets each application for membership thoroughly to ensure that the advisor works as a fee-only fiduciary, has a clean regulatory record, and meets standards of experience and ethics.  According to the Certified Financial Planner Board of Standards, Inc. there are about 77,000 CFP® certificants.  According to NAPFA, only about 2,700 are NAPFA members.

Licensing exams such as Series 7, Series 6, Series 65, etc. are not professional credentials.  In fact, FINRA, the agency that administers these exams describes the purpose of the Series 7 (license to work in securities sales) is that it, “assesses the competency of an entry-level registered representative to perform his or her job as a general securities representative.”  A general securities representative is someone who sells securities.  Read more at the FINRA website.

IWM President, Bob Pugh has earned both the CFA designation and CFP® certification.  In addition, Bob is a member of the National Association of Personal Financial Advisors (NAPFA), and a NAPFA-Registered Financial Advisor, as well as a member of the Financial Planning Association.  Bob is an experienced financial economist with two graduate degrees and is a member of the National Association for Business Economics (NABE).  

IWM will coordinate a team of professionals to ensure that your investment and wealth management, and financial planning needs are all addressed in an effective, comprehensive plan.  We can refer you to outstanding CPAs who work with other IWM clients for tax or accounting services, and highly-respected attorneys with whom to partner in serving your estate planning needs.

If the cacophony of hundreds of relatively meaningless financial designations is leaving you confused, if you want to avoid making the mistake of putting your trust in just another financial sales person, and if you want to ensure that you are dealing with an advisor who has met the most rigorous standards for professional credentials and ethical conduct, then please give Insight Wealth Management a call.