CFP, CDFA, CFA, CRPC, CFT-I....???

See a bunch of letters after a financial advisor’s name? What do they mean, and why should you care? This article will explain which each one means, and like all things in the financial & legal, the answer of one best for you is... “it depends” What does it depend on? Well, your goals. For example, if you’re looking for a comprehensive financial plan, then a CFP® is probably the best bet. But if you’re in the midst of (or thinking about) a divorce, a CDFA would be helpful. Below will explain in much more detail.

It's also useful to know which designations actually represent expertise. A study in 2013 by the Consumer Financial Protection Bureau found more than 50 senior specialist titles on the market — a few requiring a year or two of hard work, the rest not much more than pieces of paper. Alphabet soup does not necessarily make a good financial planner. However, some designations actually do signify a commitment to specialized knowledge in specific areas of financial planning and wealth management. They can provide clients with assurance that they are working with a knowledgeable and skilled professional who is dedicated to helping them achieve their financial goals with expertise tailored to their specific needs. These not only add credibility to financial professionals but also signal a commitment to ongoing education and ethical standards.

So how do you wade through which mean something and which are junk? Well, this article is hoping to help. This will focus on designations that require many months to years of preparation, rigorous exams, and ones that have continuing education requirements.

Let’s walk through the designations. What they mean, clients they are targeted for, the requirements to obtain them, and the continuing education requirements to maintain them.

Designations specific for financial planning:

The Certified Financial PlannerTM (CFP®)

This designation is one of the industry's most recognized and respected certifications.

What does it mean? CFP® professionals specialize in comprehensive financial planning. They help clients with all aspects of their financial lives, including financial goal planning, investment management, estate planning, tax planning, and insurance analysis. This designation signifies a comprehensive understanding of financial planning principles and a commitment to ethical standards.

Clients it is targeted for: individuals, families, and business owners seeking holistic financial advice for their financial goals (near-term and long-term)

What are the requirements to obtain it:

• Completion of a CFP Board-registered education program or equivalent coursework. This is typically a 1+ year education program.
• Passing the CFP exam. (~60-70% pass on the first try)
• Accumulating relevant work experience. (6,000 hours as financial advisor or 4,000 hours of apprentice.)
• Passing and adhering to the CFP Board’s Candidate Fitness (ethical) standards.
• Bachelor’s degree

Continuing education requirements:

• 30 hours per 2-year cycle year of CFP board approved credits, including a minimum of 2 specializing ethics.
  

The Certified Divorce Financial Analyst (CDFA)

What does it mean? This designation is tailored for professionals specializing in financial planning for divorcing individuals. a unique skill set focused on helping clients make informed financial decisions during challenging life transitions.

Clients it is targeted for: CDFA professionals are equipped with the expertise to navigate complex financial issues related to divorce, such as asset division, alimony, and tax implications. CDFAs assist clients during divorce proceedings. They analyze financial implications, including property division, alimony, child support, and tax consequences.

What are the requirements to obtain it:

• Completion of CFDA education program or equivalent coursework. This typically takes several months.
• Education: bachelor’s degree plus 3 years relevant work experience, or 5 years’ experience if they do not have a bachelor’s degree.
• Relevant experience includes:
• Financial planning.
• Family law practice.
• Expertise in three or more of the following areas:
• Tax code.
• Investment advisory or management.
• Real estate, mortgage, and reverse mortgage lending.
• Life and disability insurance.
• Financial therapy or coaching.

Continuing education requirements:

• CDFA holders must complete 30 hours of approved continuing education over a two-year reporting period.
• These CE hours should focus on divorce-related topics, including changes in laws, tax codes, and financial planning strategies relevant to divorce cases.
  

Designations specific to retirement income planning: there are many of them.

The chart below shows the differences, and according to an industry expert, Michael Kitces, these are the designations to look for. Reputable ones include the below plus the CRPC® designation.

The Chartered Life Underwriter (CLU)

What does it mean? CLUs focus on life insurance and estate planning. They help clients protect their assets, plan for wealth transfer, and minimize estate taxes. A word to the wise, however, is to ask a CLU how they are compensated. Many insurance products are commission-based products; ask how they are abiding by fiduciary duty of putting a client’s interest before their own if they are compensated based on selling an insurance product.

Clients it is targeted for: Individuals and families with complex estate planning needs.

What are the requirements to obtain it:

• Completion of the CLU program.
• Three years of experience in financial planning or a related profession.
• Successfully completion the five required courses. (<15 months)

Continuing education requirements:

• 30 hours every two years, including one hour of ethics CE.
  

Certified Financial Therapist (CFT-I)

What does it mean? A CFT-I combines financial expertise with therapeutic skills to help clients navigate their financial challenges holistically. A CFT-I is a licensed professional who has received certification from the Financial Therapy Association (FTA). This relatively new U.S.-based certification is designed for both financial and mental health professionals. It blends financial expertise with therapeutic techniques to address clients’ financial and emotional well-being.

Clients it is targeted for: CFT-Is work with individuals and families who seek a holistic approach to financial well-being. They address not only financial issues but also the emotional and psychological aspects related to money.

What are the requirements to obtain it:

• Education: CFT-I applicants must have a bachelor’s degree or higher in either:
• A financial-related field (e.g., financial planning, personal finance, consumer economics, accounting).
• A mental health-related field (e.g., psychology, therapy/counseling, social work, human development).
• If the applicant holds a bachelor’s degree in any other field and also possesses certifications such as CFP® (Certified Financial Planner), LPC (Licensed Professional Counselor), LMFT (Licensed Marriage and Family Therapist), CPA (Certified Public Accountant), or CFA® (Chartered Financial Analyst), the educational requirements are considered met.
• Competency Training: Candidates gain foundational financial therapy knowledge through the FTA’s Education Video Series.
• Experience: Specific experience requirements across financial therapy, financial planning, financial counseling, and therapeutic competencies.
• Ethical Standards: Adherence to the FTA Standards of Practice, including a fiduciary standard, acceptable forms of compensation, and avoiding product sales.

Continuing education requirements: Once certified, financial therapists must complete continuing education to maintain their certification. CFT-I™ Practitioners are required to submit 20 hours of continuing education each bi-annual period after initial certification.

Designations specializing in investment management:

Chartered Financial Analyst (CFA) chartholder

What does it mean? A CFA chartholder is a prestigious title awarded by the CFA Institute to investment professionals who have demonstrated expertise in advanced investment analysis and real-world portfolio management skills.

Clients it is targeted for: financial advisors seeking outsourced expertise in portfolio management, commercial & investment banks, high net worth individuals who need specialized investment management, individuals and advisors seeking investment consulting.

What are the requirements to obtain it:

• Education:
• The CFA Program consists of three levels of exams.
• Passing all three levels is a mandatory requirement to obtain the CFA charter.
• Experience:
• Accumulate at least 48 months (four years) of qualified work experience.
• This experience must be directly related to investment decision-making or producing work that adds value to that process.
• References:
• 2-3 letters of reference from sponsors who can vouch for your work experience and professional character.

Continuing education requirements:

• CFA Institute encourages charterholders to record at least 20 Professional Learning (PL) credits each year.
• These credits help you stay current with industry changes and evolving practices.
• Within those 20 credits, make sure to include 2 credits related to Standards, Ethics, and Regulations (SER).
  

Certified Investment Management Analyst (CIMA):

What does it mean? CIMAs focus on investment management for high-net-worth clients and institutional investors. They emphasize portfolio construction and risk management.

Clients it is targeted for: High-net-worth individuals, institutional investors, and family offices (define).

They specialize in managing complex investment portfolios for these affluent individuals.

CIMA holders work in banks, asset management firms, and pension funds.

They identify investment opportunities for both corporate clients and individual investors.

What are the requirements to obtain it:

• High School Diploma or Equivalent: You need at least a high school diploma or its equivalent.
• 3 Years of Finance-Related Work Experience
• Complete an Executive Education Program: Choose an approved education provider and complete the program.
• Pass the CIMA Certification Exam: The exam covers various topics related to investment management and portfolio construction.
• On average, completing the CIMA exams takes between two and six years.

Continuing education requirements:

• 40 hours of continuing education every two years to maintain the certification status. Within those hours, CIMA-certified professionals must dedicate:
• 2 credit hours to ethics.
• 1 credit hour to tax or regulatory topics
  

Which Designation is Right for Your Needs?

Keep in mind, when looking for retirement advice, you don't need a "senior specialist" at all. You can get the answers you need from a Certified Financial Planner (CFP) who trains in all aspects of financial counsel.

Ideally, you want a fee-only CFP, who sells no products and charges only for advice. Another good set of initials is RIA — registered investment adviser. Even these titles, however, are frosting on the cake. You should be fine with a fee-only CFP. Any additional designations just deepen the knowledge that she has already acquired.

If you’d like to know more about the additional designations and which is the right for for you- you should consider several key factors to make sure you’re aligned with your specific goals when choosing the right professional designation. Begin by evaluating your financial objectives and the areas where you require expert guidance. The key to choosing the right designation lies in aligning the expertise and specialization of the financial advisor with your individual financial goals. By conducting thorough research, assessing your needs, and understanding the areas where you require professional guidance, you can make an informed decision that ensures your financial well-being and sets you on the path toward achieving your long-term objectives.

To learn more about all the financial industry designations, visit Investopedia’s Guide to Financial Designations or FINRA’s Professional Designation Tool.

Investment advisory services offered through Equita Financial Network, Inc. an investment adviser with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. Equita Financial Network also markets investment advisory services under the name, Astraea Wealth Management LLC.