Short for certified financial planner, this is the most common appellation used by general planners. CFPs must have three years of experience and take college courses or study at home for a two-day, 10-hour exam. More than 27,000 planners have earned the credential, which is issued by Denver’s CFP Board of Standards.
This signals a certified public accountant (CPA) who’s also a personal financial specialist. A PFS must have at least three years of experience and pass a six-hour exam. The upside to PFSs and CPAs: because accountants usually aren’t compensated through commissions, they’re probably more objective than sales-hungry planners. They also have an edge because so much of financial planning is tax planning. The downside: accountants often shy away from recommending specific investments.
If a planner with this label recommends a lot of insurance, there’s a good reason: the so-called chartered life underwriter is probably an insurance agent. While such planners sometimes get a bad rap for using insurance as the answer to too many financial problems. their schooling is rigorous by financial-planning-industry standards. The CLU program requires two-hour exams in each of 10 subjects.
This one is a close cousin of the CLU; in fact, 95 percent of chartered financial consultants hold both designations. which are issued by The American College in Bryn Mawr, Pa. The difference between the two acronyms: three of the 10 courses are different, and the ChFC program focuses less on insurance and more on general financial planning.
A chartered financial analyst is a stockpicker, plain and simple. It’s just great if a mutual-fund manager or stockbroker displays this credential, but you may not want to ask him about estate planning or life insurance. Forty percent of applicants fail the CFA test at the end of the first year of study-about 18,000 hold the credential.
