Financial Planner Credentials

When discussing with your planner how he or she is paid for helping you, it will be helpful to understand the variety of credentials that are offered to financial planners and tax advisors. The most respected designations--those that require the most preparation and knowledge and the highest ethical standards--are the CFA, CFP, ChFC, CPA and PFS.

ATA or ATP: Accredited tax advisors or accredited tax preparers have completed the College for Financial Planning’s Accredited Tax Preparer Program and passed an exam administered by the Accreditation Council for Accountancy on Taxation.

CFA: Chartered financial analysts must pass a rigorous, three-level test on investment analysis, economics, portfolio theory, accounting, corporate finance and other topics that is administered by the Financial Analysts Federation. CFAs also must demonstrate expertise in a specialized area of investments.

CFP: Certified financial planners must meet experience and education requirements and pass a 10-hour exam.

CFS: Certified fund specialists have completed a 60-hour self-study course and passed an examination on mutual fund investing administered by the Institute of Business & Finance in La Jolla.

ChFC: Chartered financial consultants are typically insurance agents who have passed college-level courses in financial planning.

CPA: Certified public accountants are tax specialists who must have a college degree, pass a strict national exam and keep current on changes in tax law.

CLU: Chartered life underwriters have the highest professional designation for life insurance agents and must meet extensive experience and education requirements in the life insurance industry.

CMFC: Chartered mutual fund consultants have completed a 72-hour self-study course on mutual funds. The program is administered by the College for Financial Planning and the Investment Company Institute.

EA: Enrolled agents are tax preparers who either worked for the IRS for at least five years or passed a two-day test on federal tax law.

PFS: Personal financial specialists are CPAs who have met education and experience requirements and passed a comprehensive exam on financial planning.

RIA: The designation simply means they have registered with the Securities and Exchange Commission and paid a registration fee.