Understanding Financial Credentials
You are looking for someone who can provide you with professional financial advice. Where do you begin? Perhaps you search the internet for investment advice. A list immediately comes up with several advisors from one of the major bank-owned investment firms. A common designation among them is CIM®. You wonder what that is and whether that means the woman you spoke to with that designation is more qualified than someone without it.
There are multitudes of certifications, credentials, and designations in the financial services world. Not all of them may apply to your needs, and some of them may not be that valuable, but having this list of credentials may help you when you are searching for financial advice.
How might you evaluate these designations? I would suggest that one of the best ways is to check the website of the credentialling body to see if they have a page showing disciplinary actions taken. While one aspect of the difference will have to do with the relative quantity of those with the credential in question compared to the other credentials, if you cannot find a listing of disciplinary actions, you may wish to question how valuable and supervised that credential is.
I have put the designations into what I think are the most appropriate categories. Within each category, I have listed them in alphabetical order. Beside the credential is the hyperlinked name of the body that confers the designation. Clicking on the link will give you a greater description of what the designation indicates.
Comprehensive Financial Planning
Comprehensive or integrated financial planning refers to financial services skills that cover the full range, including financial management, investment planning, insurance planning and risk management, retirement planning, tax planning, and estate planning. People with these credentials may act like financial contractors, organizing and developing a financial plan, but they may also specialize in a narrower financial planning niche.
CFP – Certified Financial Planner®. FP Canada. The CFP is probably the most recognized financial planning designation in Canada today and has become increasingly rigorous over the years. Some CFP professionals specialize in supporting wealthy busy owners while others focus on the “average guy.”
CH.F.C. – Chartered Financial Consultant. The Institute for Advanced Financial Education. You are less likely to see this credential these days. While still being maintained, courses to obtain this credential are suspended. The focus is on wealth accumulation and retirement planning.
FMA – Financial Management Advisor. Canadian Securities Institute. This credential is no longer being offered by CSI (the Canadian Securities Institute), having been discontinued in 2009. It covered several financial planning topics. The successor designation that is most closely related is the CIWM, which I have listed under Investment Planning below.
PFP – Personal Financial Planner®. Canadian Securities Institute. This credential was formerly offered by the Institute of Canadian Bankers until it was acquired by CSI. As one might expect, it is still mostly held by bank employees.
Pl.Fin. (F.Pl.) – planificateur financier (financial planner) Autorité des marches financiers (AMF) is the financial planning designation in Quebec equivalent to the CFP.
QAFP – Qualified Associate Financial Planner™. FP Canada. The QAFP is a financial planning designation in its own right but holders of this qualification confine themselves to less complex cases than CFP professionals.
R.F.P. – Registered Financial Planner. The Institute of Advanced Financial Planners. This is an older financial planning credential in Canada and is often regarded as the most advanced and rigorous available. However, the IAFP is a much smaller organization so you will likely see the R.F.P. less often than the CFP.
CCS – Certified Cash Flow Specialist™. CacheFlo. Financial Management includes more than budgeting and the careful use of debt, but it is the area in which holders of this designation may seek to specialize.
CFA – Chartered Financial Analyst. The CFA Institute. The CFA charter is probably the most demanding of designations to achieve in investment management. It is one of the few designations to explicitly impose a fiduciary duty on its charter holders and has graduate-level expectations regarding finance, market knowledge, applied mathematics and statistics, and ethics. In Canada, although it is not a regulatory requirement to hold the CFA charter to become a portfolio manager, it is seen as the highest standard. This is the typical credential required of securities analysts at asset management firms in Canada.
CIM – Canadian Investment Manager. Canadian Securities Institute. This credential was replaced by the Chartered Investment Manager®, below, in 2012. It required three courses to achieve, the Canadian Securities Course, the basic course required to become securities licensed in Canada, followed by Investment Management Techniques and Portfolio Management Techniques. The CIM was a required designation to offer discretionary portfolio management services in Canada. Those who were awarded the CIM may continue to use the designation but are no longer able to provide discretionary portfolio management.
CIM® – Chartered Investment Manager®. Canadian Securities Institute. The education credentials are the same as the old CIM. However, additional requirements include two years of experience in investment management and adherence to a code of ethics. For a Chartered Investment Manager to distinguish him or herself from a Canadian Investment Manager, CSI advises the use of the ®, the registered trademark symbol.
CIWM – Certified International Wealth Manager. Canadian Securities Institute. This designation is aimed at training advisors to support high net worth clients, the type who might use private banking services. The designation is offered in affiliation with the Association of International Wealth Management, based in Switzerland.
Insurance Planning and Risk Management
CHS – Certified Health Insurance Specialist. The Institute for Advanced Financial Education. This is a designation for life insurance representatives who focus on disability, critical illness, long-term care, or group benefits insurance policies.
CLU – Chartered Life Underwriter®. The Institute for Advanced Financial Education. This has been recognized by the Financial Services Regulatory Authority of Ontario (FSRA) as an approved credential for the Financial Planner title, but I list it here as its main emphasis is on estate planning and the transfer of wealth to the next generation, which is generally facilitated by insurance.
PFA – Professional Financial Advisor™. The Institute for Advanced Financial Education (IAFE). As I write this, the PFA is the only credential that has been approved by FSRA for the Financial Advisor title. As you may know, until recently, the titles Financial Planner and Financial Advisor had no regulatory limits on their use outside of Quebec’s regulation of the title Financial Planner. It is my understanding that the IAFE, on behalf of its parent, Advocis, developed this credential to provide those in the financial services industry with a designation that would allow Advocis members to legally identify themselves as financial advisors. The focus is on training advisors on practice development, technical knowledge, compliance, and ethics.
CPA – Chartered Professional Accountant. Chartered Professional Accountants Canada. The Chartered Professional Accountant or CPA designation in Canada came about from the merger of three previously existing accounting designations: Chartered Accountant, Certified General Accountant, and Certified Management Accountant. While accountants do much more than tax planning, this is probably what they are best known for. They might also engage in business valuation, producing financial projections for businesses, income tax planning, auditing, and acting as insolvency trustees, among other things. If you have complex tax needs or operate a business, you may find it useful to hire someone with this credential.
CPCA – Certified Professional Consultant on Aging. CPCA Canada. This designation complements a financial advisory practice by providing information on aging, including economic, physiological, and social aspects. Issues also include navigating healthcare and income support programs, abuse and exploitation, dementia, aging and spirituality, among others.
EPC – Elder Planning Counselor®. Canadian Initiative for Elder Planning Studies Inc. This program includes financial issues relevant to the elderly but goes beyond that to cover areas like long-term care, housing options, care-giving, end-of-life planning, funeral planning and bereavement, nutrition and fitness, and other related matters. It appears to be a good complement to a financial planning designation.
RRC – Registered Retirement Consultant®. The Canadian Institute of Financial Planning. As the credential indicates, this is all about retirement. Based on what I see from the curriculum, it probably covers similar areas to the Retirement Planning and Estate Planning sections of the QAFP or CFP credentials, but perhaps without the same depth.
TEP – Trust and Estate Practitioner. STEP Canada. STEP is a global organization that includes lawyers, accountants, financial planners, and others who help families plan for their futures. People with the TEP credential may guide surviving family members following the death of a spouse/parent, ensure the elderly and vulnerable are cared for, assist with the succession of a family business, or help clients to effectively support charitable causes.
MTI – Member, Trust Institute. MTI® Estate and Trust Professional. Canadian Securities Institute. This credential requires training in estate and trust administration including an understanding of the tax considerations, laws, and ethics that apply in these situations. Holders of this designation learn how to reduce risks for estate trustees and executors.
CEA – Certified Executor Advisor. Canadian Institute of Certified Executor Advisors. Credential holders here can help before death by advising testators (those who make a will) on how to prepare a will in such a way as to minimize the burden placed on the executor. After death, CEAs can also be consulted to avoid problems and guide executors toward the professionals they may need.
There are many more specialized credentials than those listed above. I include some of those specializations below that may be relevant to those in certain circumstances.
Behavioural Finance/Financial Psychology
CFT – Certified Financial Therapist™. Financial Therapy Association.
FBS – Certified Financial Behavior Specialist®. Financial Psychology Institute
Family Business Planning
FEA – Family Enterprise Advisor. Family Enterprise Canada.
Christian-Based Financial Advice
CKA – Certified Kingdom Advisor®. Kingdom Advisors.
CFDS – Chartered Financial Divorce Specialist. Academy of Financial Divorce Specialists.
CFDA – Certified Divorce Financial Analyst®. Institute for Divorce Financial Analysts.
Socially Responsible/ESG/Sustainable Investing
RIS – Responsible Investment Specialist, RIAC – Responsible Investment Advisor Certification, RIPC – Responsible Investment Professional Certification. RIA Digital Academy.
This is the 151st blog post for Russ Writes, first published on 2022-06-06.
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Disclaimer: This blog post is intended for general information and discussion purposes only. It should not be relied upon for investment, insurance, tax, or legal decisions.