The following list contains several certifications related to financial planning. While this is not an exhaustive guide, we believe it contains several of the designations and certifications you should seek when considering advisors.
Certified Financial Planner™ is an international certification recognized in the United States and a number of other countries. No federal or state law or regulation requires financial planners to hold the CFP® mark, so obtaining it is completely voluntary. The mark is characterized by its:
Certification is granted in the United States by the Certified Financial Planner Board of Standards, Inc. As of 2019, more than 84,000 individuals have obtained CFP® certification in the United States (with 935 in Oregon). To attain the right to use the CFP® mark, an individual must satisfactorily fulfill all of the following requirements:
Agree to be bound by the CFP Board’s Code of Ethics and Standards of Conduct.
The Code of Ethics dictates a CFP® professional must:
Attain a bachelor’s degree from a regionally accredited United States college or university (or its equivalent from a foreign university).
Complete an advanced college-level course of study addressing the financial planning subject areas that the CFP Board has determined to be necessary for the competent, professional delivery of financial planning services. Subject areas include insurance planning and risk management, employee benefits planning, investment planning, income tax planning, retirement planning and estate planning.
Pass the comprehensive CFP® Certification Examination. The examination is administered in 10 hours over a two-day period. It includes case studies and client scenarios designed to test students’ ability to correctly diagnose financial planning issues and apply their knowledge of financial planning to real world circumstances.
Complete at least three years of full-time financial planning-related experience (or the equivalent, measured as 2,000 hours per year).
The Standards prominently require that CFP® professionals provide financial planning services at a fiduciary standard of care. This means CFP® professionals must provide financial planning services in the best interests of their clients.
Complete 30 hours of continuing education every two years, including two hours on the Code of Ethics and other parts of the Standards of Professional Conduct to maintain competence and keep up with developments in the financial planning field.
CFP® professionals who fail to comply with the above standards and requirements may be subject to the CFP Board’s enforcement process, which could result in suspension or permanent revocation of their CFP® certification.
A Registered Investment Adviser (RIA) is a firm that has filed with the Federal Securities and Exchange Commission or State Securities Commission and adheres to certain disclosure requirements. The RIA is not a professional designation. This qualification is necessary for the rendering of investment advice. Investment Advisers who manage less than $100 million are generally state registered.
The National Association of Personal Financial Advisors (NAPFA) is an association of fee-only financial advisors who have a fiduciary responsibility to their clients. Certification requirements include:
Completion of the CFP® requirements as set forth by the CFP Board.
Completion of 60 hours of continuing education every two years.
Successful completion of the Candidate Fitness Standards and background check.
Adherance to the NAPFA Fiduciary Oath, Standards of Membership and Affiliation, and Bylaws.
Signing a Code of Ethics that includes agreeing to abide by the Standards of Professional Conduct and Terms and Conditions.
Certified Public Accountants are licensed and authorized by the state to practice public or private accounting. CPA licensing requirements in Oregon include:
In addition, all American Institute of Certified Public Accountants (AICPA) members are required to follow a rigorous Code of Professional Conduct, which requires that they act with integrity, objectivity, due care and competence. It also requires that they fully disclose any conflicts of interest (and obtain client consent if a conflict exists), maintain client confidentiality, disclose to the client any commission or referral fees, and serve the public interest when providing financial services.
The PFS is a specialty credential awarded by the American Institute of Certified Public Accountants (AICPA) to CPAs who specialize in personal financial planning. PFS applicants study estate planning, retirement planning, investing, insurance and other areas of personal financial planning. To become a PFS, candidates must be active members of the AICPA, have at least three years of financial planning experience, meet all requirements for being a CPA, receive recommendations and pass a written exam.
EA is a designation awarded by the Internal Revenue Service to individuals who wish to represent persons before the IRS. Applicants must pass a comprehensive, two-day exam held by the IRS on all aspects of tax law, including tax filing procedures.
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