Decoding Financial Adviser Alphabet Soup
By MP Dunleavey
Sent: Thursday August 19, 2010
Is an MBA better than a CPA? Is a CDFA more qualified than a CFP? How do you sort through the alphabet soup credentials to pick the right financial adviser?
We'll tell you, PDQ:
CFA—A chartered financial analyst is a prestigious designation, often held by securities analysts, investment advisors. It doesn't spell "financial planner" for ordinary folks.
 |
CFP—A certified financial planner has completed years of training, tests and work experience, and is geared to help consumers choose investments and manage a long-term financial plan. You want to see these three letters, at minimum. |
ChFC—A chartered financial consultant is trained sell insurance products and can also do basic planning.
CDFA—Certified divorce financial analysts offer financial advice to those going through a divorce. They aren't financial planners, unless otherwise noted.
CPA with PFS—A certified public accountant with a personal finance specialty indicates that a highly trained tax pro (CPA) has an additional certification that allows them to do financial planning.
Bottom line
Take any adviser's designations as a starting point for discussion, "rather than the final criteria," says David McPherson, a CFP in Falmouth, MA. And beware of flimsy titles like "financial planner," without the appropriate credential.
Do you have a financial planner? Are you a financial planner—what kind? Tell us.
