When you start looking for a financial professional to work with, you’re going to come across a lot of acronyms. These assortments of initials reflect the courses and designations financial pros have, but they can lead to a lot of FAQ (frequently asked questions).
Because designations and certifications signify expertise and are important to understand, here’s a breakdown of the acronyms. By understanding what they mean, you can start to determine which financial professional may be best aligned with your needs.
The Chartered Financial Analyst (CFA) is one of the most respected global designations in the financial services industry. The 178,000 CFAs around the world are experts in portfolio management, investment analysis, derivatives, accounting and other financial fundamentals.
This designation is difficult to achieve and those that do are financial professionals with deep knowledge. CFA charterholders and candidates are bound by fiduciary duty, which means that they’re legally obligated to always act in their clients’ best interests.
A professional with a Certified Financial Planner (CFP) designation has demonstrated competency in all areas of financial planning. This designation is the most recognized worldwide, with approximately 17,000 CFP holders in Canada.
There are tailored CFP education paths for securities, mutual fund, insurance and banking professionals. Certified Financial Planners have proven they have the knowledge, skills, experience and ethics to expertly examine a client’s portfolio and entire financial situation to provide a personalized plan.
The Personal Financial Planner (PFP) designation is a leading credential in Canada, recognized by the largest financial institutions. This designation focuses mainly on individual financial planning. It is geared to managing all aspects of a financial plan including insurance, investments, estate planning, tax considerations and business income.
Mutual fund-licensed investment advisors can obtain the Responsible Investment Specialist (RIS) designation. Responsible Investment Specialists focus on environmental, social and governance (ESG) investments for Canadian clients.
A Chartered Investment Manager (CIM) is committed to determining the best investment vehicles for clients. They manage investments based on market and economic conditions. A CIM can conduct discretionary portfolio management services, which means they can make trades on your behalf without asking every time.
The Certified International Wealth Manager (CIWM®) is an advanced education program that is internationally recognized. The program is designed for professionals with extensive experience in the financial industry, working within securities or mutual fund dealers, banks or other financial institutions. It is considered the global standard for strategic wealth management.
To obtain this designation, there are several courses that must be completed along with tests at each level. The CIWM Certification Examination will assess expertise in developing strategies and relationships with high-net-worth clients. The examination has three components based on client scenarios, which must be completed over the course of 60 days. In order to qualify candidates must have either a CFA, CFP, PFP or CIM designation and three years of client experience.
Clients that work with financial professionals report greater financial confidence and security. While 40 per cent of Canadians without a financial planner rank money as their main stressor, that number drops to 25 per cent for those who work with one.
Understanding an advisor’s certifications is an important first step. Financial designations indicate areas of expertise and education levels, which will help you determine which financial professional is best for your situation.
Mutual funds, other securities and securities related financial planning services are offered through Qtrade Advisor, a division of Credential Qtrade Securities Inc. Mutual funds and related financial planning services are offered through Qtrade Asset Management Inc. Financial planning services are available only from advisors who hold financial planning accreditation from applicable regulatory authorities. The information contained in this article was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete. This article is provided as a general source of information and should not be considered personal investment advice or a solicitation to buy or sell any mutual funds and other securities.