When selecting a financial planner to work with, one factor you may want to consider is their demonstrated commitment to developing and maintaining competency through education or through earning professional designations. This list of financial planning certifications is far from complete, as there are well over 100 different certifications of varying quality. However, this list does cover some of the most popular and well-respected designations that you may see some members of the San Diego Financial Advisors Network have.
Every single member of the San Diego Financial Advisors Network maintains the necessary licenses and registrations to provide professional financial planning and investment advice, but we have all chosen to go a step beyond that and pursue additional professional designations as part of our effort to provide competent advice to our clients. All SDFAN members are either CERTIFIED FINANCIAL PLANNER™ professionals or CFP® candidates, meaning that they have completed the education requirements and passed the CFP® exam. Some of us also hold additional certifications related to financial planning such as Enrolled Agent or Chartered Financial Analyst.
Please note that all of these professional designations are strictly voluntary, and are not required by any regulatory agency to be able to provide financial planning or investment management services to individual clients.
Certified Financial Planner (CFP®)
CFP® certification is generally acknowledged as the highest standard in personal financial planning, and demonstrates a deep knowledge and commitment to a career providing professional financial advice. It is the most widely recognized and sought after professional designation within the financial planning industry. Certification is granted and controlled by the Certified Financial Planner Board of Standards, and characterized by its:
- High standard of professional education
- Stringent code of conduct and practice standards
- Ethical requirements governing engagement with clients
To attain the CFP® marks, an individual must complete four requirements known as the “Four E’s”:
- Attain a bachelors degree or higher from a regionally accredited university
- Complete an advanced course of study covering the financial planning subject areas defined by the CFP Board as being important for the delivery of competent, professional financial advice. Subject areas include investment planning, insurance and risk management, income tax planning, estate planning, employee benefits planning, retirement planning, and others.
- Pass the comprehensive CFP® certification examination. The examination is administered in 2 sessions of 3 hours each with a brief break in between. It includes case studies and client scenarios designed to test students’ ability to correctly diagnose a wide range financial planning issues and apply their knowledge of financial planning to real world circumstances. The exam is designed to cover a wide range of subject areas, and passing is regarded as a tremendous accomplishment.
- Because CFP® certification indicates to the public the ability to provide professional financial planning services without supervision, candidates are required to accumulate either 6,000 hours of experience through the Standard Pathway, or 4,000 hours of experience though the Apprenticeship pathway that meets additional requirements. Qualifying experience may be acquired through a variety of activities and professional settings including personal delivery, supervision, direct support, indirect support or teaching. Experience is often required to be supervised or verified by a CFP® professional.
- Individuals must agree to be bound by the CFP Board’s Standards of Professional Conduct, which consist of a set of documents outlining the ethical and practice standards for practitioners.
- Certificants are also required to adhere to a fiduciary standard while providing financial planning services, meaning that they agree to put their clients’ best interests before their own.
Maintaining CFP® certification requires a minimum of 30 hours of continuing education every two years, including 2 hours on the Code of Ethics. It also requires renewal of the agreement to be bound by the Standards of Professional Conduct. You can learn more about CFP® certification at http://www.cfp.net
The following members of the San Diego Financial Advisors Network maintain current CFP® certification:
Enrolled Agent (EA)
An Enrolled Agent is a person who has earned the privilege of representing taxpayers before the Internal Revenue Service by either passing a challenging three-part comprehensive IRS test covering individual and business tax returns, or through experience as a former IRS employee. Enrolled Agent status is the highest credential the IRS awards.
Individuals who obtain this elite status must adhere to ethical standards and complete 72 hours of continuing education courses (specifically related to federal taxation) every three years. Enrolled agents, like attorneys and Certified Public Accountants (CPAs), have unlimited practice rights. This means they are unrestricted as to which taxpayers they can represent, what types of tax matters they can handle, and which IRS offices they can represent clients before.
You can learn more about Enrolled Agents in Treasury Department Circular 230 or on the IRS website at https://www.irs.gov/Tax-Professionals/Enrolled- Agents/Enrolled-Agent-Information
The following members of the San Diego Financial Advisors Network are currently Enrolled Agents:
Chartered Financial Analyst (CFA)
The Chartered Financial Analyst® (CFA) credential is granted by the CFA Institute, and is one of the most respected and recognized investment management designations in the world. The CFA Program provides a strong foundation of advanced investment analysis and real-world portfolio management skills.
The course of study is organized into three levels and each level requires passing a six-hour exam. The program curriculum increases in complexity as you move through the three levels:
Level I: Focuses on a basic knowledge of the ten topic areas and simple analysis using investment tools
Level II: Emphasizes the application of investment tools and concepts with a focus on the valuation of all types of assets
Level III: Focuses on synthesizing all of the concepts and analytical methods in a variety of applications for effective portfolio management and wealth planning
Candidates report dedicating in excess of 300 hours of study per level to prepare for each exam.
Besides passing the exams, becoming a CFA charter holder also requires 48 months of acceptable professional work experience and membership in the CFA Institute. You can learn more about the CFA at https://www.cfainstitute.org/programs/cfaprogram/charterholder/pages/index.aspx
The following members of the San Diego Financial Advisors Network are currently CFA charter holders: