The ABCs of the Financial World
CPA—Certified Public Accountant
The world of finance and investments poses a host of challenges for the most savvy consumer. Whom can you count on for financial advice? How can you determine if your financial representative is qualified to handle your needs? Is an RR all you need? Should you consider finding a PFS? Or, would a CFP be a better choice?
There are a wide variety of acronyms you’ll see following a financial rep’s name. They may look like alphabet soup. However, they are important clues to the individual’s education, experience and associations. Kemper Funds offers investors this guide to what those curious letters mean:
CFP—Certified Financial Planner
CFPs have a minimum of three years financial planning experience. They’ve passed several exams, including a two-day, 10-hour case-study exam, and they’ve met continuing education requirements. They are qualified to offer a broad range of advice on investment planning, insurance, taxes, retirement planning and estate planning.
CFA—Chartered Financial Analyst
CFAs have earned a college degree, completed at least three years of study and have been tested by the Association of Investment Management and Research. They also meet continuing education requirements. They are generally money managers and stock analysts.
ChFC—Chartered Financial Consultant
ChFCs are typically life insurance agents who have completed coursework in financial planning, passed an exam and gained three years experience. They generally provide all-around financial planning with emphasis on insurance.
CPAs are required to pass a rigorous national exam and meet continuing education requirements. They can advise you on income tax, investment and estate planning issues.
PFS—Personal Financial Specialist
PFSs are CPAs who have received accreditation from the American Institute of Certified Public Accountants (AICPA). To be accredited, PFSs must prove financial planning experience, pass an exam and submit references every three years.
RIA—Registered Investment Advisor
RIAs are usually financial professionals, such as accountants and insurance agents, who have registered with the Securities and Exchange Commission (SEC). The title does not constitute an endorsement by the SEC or require adherence to a code of behavior.
RRs have passed a qualifying exam administered by the National Association of Securities Dealers (NASD). They are generally sales representatives for a brokerage firm. Their expertise is in the selection and monitoring of stocks, bonds, mutual funds and other financial products.