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Financial Designations Aren't All Created Equal
 
by Mark P. Cussen,CFP®, CMFC (Contact Author|Biography
 
)
 Whether you're new to the financial services business or an experienced veteran, earning one of the manyprofessional designations now available will provide you with a lot of benefits. Increased marketing exposure,credibility and compensation are just some of the advantages offered to those willing to fulfill the rigorousrequirements for certification.However, the proliferation of designations, particularly in the financial planning field, has complicated the process forthose trying to decide which designation will benefit them the most. Over the last several years, a host of newdesignations have sprung up that offers advisors specialized training in various niches of practice. However, many ofthese newer credentials require far less academic coursework and training than what is demanded by the older, moreestablished designations. In this article, we'll go over some of the more respected designations and what they entail.
New Kids on the Block
The increase in new designations has sparked debate in the financial services industry regarding the credibility ofcertain designations compared to others. While there is no black-and-white line of separation between them, ageneral distinction can be made between the "old school" designations that have been around for decades and thenewer ones that continue to crop up. The designations that are most respected and recognized by the financialindustry and the media include:1.
Certified Financial Planner
(CFP
)This is perhaps the most widely recognized credential in the financial planning industry. The media haspromoted this designation over most others for years, primarily because of its unbiased approach to teachingthe financial planning process and the rigorous certification requirements that are administered by the CFP
 board. The academic requirement consists of five courses covering insurance, estate, retirement, education,tax and investment planning plus ethics and the financial planning process. Once that is complete, studentsmust sit for the board exam. This is a 10-hour, 285-question test that spans two days and includes twocomprehensive case studies. Once a passing grade has been achieved, prospective certificants must alsocomplete at least three years of professional experience plus a bachelor's degree in order to obtain the CFP
designation. (To learn more, read
Is A Career In Financial Planning In Your Future 
and
Studying For The CFP Exam 
.)2.
Certified Public Accountant
(CPA)The CPA is by far the oldest and most established financial credential in America. CPAs must now have atleast 30 hours of undergraduate level accounting courses plus a master's degree in order to sit for the 19-hour, two-day exam. This comprehensive exam covers accounting, auditing, bookkeeping, taxes andethics, among other topics. The CPA designation has long been widely recognized by the public as thedefinitive credential of tax expertise.3.
Enrolled Agent
(EA)This is a lesser tax designation often obtained by those who focus on preparingincomeorestate taxreturns. The special agent exam administered by the Internal Revenue Service (IRS) is broken down into four three-hour sessions spanning two days. The test covers personal, estate and corporate taxes, as well as ethics andInternal Revenue Service regulations, but does not include straight accounting, auditing or bookkeeping of anykind. It could perhaps be said that the Enrolled Agent designation allows tax preparers to roughly equatethemselves to CPAs within the specific confines of tax preparation.4.
Chartered Life Underwriter
(CLU) and
Chartered Financial Consultant
(ChFC)Both of these designations were originally created by thelife insuranceindustry. The CLU designation requiresthe same five core courses as the CFP
designation, plus three additional elective courses. The ChFCdesignation has the same requirements, except that it tends to embrace general financial planning issues asopposed to the CLU, which focuses more closely on life insurance and its laws and regulations. There is nocomprehensive board exam required for either credential.5.
Certified Employee Benefit Specialist
(CEBC)As the name implies, this designation is designed specifically for those who sell or administrate employeebenefit plans. The curriculum for this designation consists solely of eight courses covering various business,
 
Page 1 of 3This article and more available at Investopedia.com6/24/2008http://investopedia.com/printable.asp?a=/articles/financialcareers/07/different_designations...
 
insurance, retirement, pension and regulatory topics. No comprehensive board exam is required. Like the CLUor ChFC, much of the material in this coursework is also covered in the CFP
curriculum.6.
Registered Health Underwriter
(RHU) and
Chartered Property Casualty Consultant
(CPCU)These designations denote mastery of each of their respective lines of insurance. Each designation requiresthe completion of several courses of intensive academic study, but as with the CLU, ChFC and CEBC there isno board exam. Generally, these designations are only earned by those who intend to spend the duration oftheir careers focusing on health or property-casualty insurance.7.
Chartered Financial Analyst
(CFA
)This designation is generally considered to be one of the most difficult and prestigious credentials in thefinancial industry, at least in terms of investment management. The academic requirements for thisdesignation are second only to those for CPAs. Three years of coursework must be completed that covers arange of topics and disciplines such as technical and fundamental analysis, financial accounting and portfoliotheory and analysis. Those who earn this designation often becomeportfolio managersor analysts for varioustypes of financial institutions. Holders of these credentials, like CPAs, tend to be compensated chiefly bysalary with performance-based incentives (if they take corporate jobs), or from business revenue, for thosewho start their own private investment management companies. (To learn more, read
What Does "CFA" Mean? 
and
Preparing For A Career As A Portfolio Manager 
.)
Separating the Wheat from the Chaff
While these designations have long since been accepted as part of the financial services establishment, the newwave of credentials that has since arisen has served to cloud the validity of some of these older certifications.However, closer analysis of many of these designations quickly reveals that they only require a small fraction of thecoursework that is demanded from the traditional sources of accreditation. For example, the Accredited AssetManagement Specialist (AAMS) and Chartered Mutual Fund Counselor (CMFC) designations can certainly aidadvisors in the investment selection and management process (and will also likely sound impressive to clients andprospects). However, the academic curriculum required for either certification barely scratches the surface of thematerial covered by either the CFA
or even the CFP
curriculums. But while the coursework required to obtainmost other designations does not compare to that of the CFA
, a notable exception has arisen in recent years.The Licensed International Financial Analyst
(LIFA
) credential covers much of the same material as the CFA
 curriculum in its coursework, but is considerably more flexible in terms of administration. Unlike the CFA
exams,which are administered at set times in specific, approved locations, LIFA
students can go to any Thomson-Prometric testing site and sit for their exams, which can be administered at least 260 days out of the year. LIFA
 exams are also less expensive, and students may also petition to bypass the first two levels of the exam and sitdirectly for level III. It remains to be seen how this newer designation will be compared to the traditional CFA
 certification.Indeed, some designations that have recently been created function chiefly as "marketing" designations(i.e.credentials that are geared toward advising senior citizens.) These certifications often focus more on trainingadvisors how to effectively market certain kinds of financial products and services to senior citizens. Therefore, asubstantial portion of the training is geared primarily toward exploring the mindset of the average senior citizen andhow that can be used to induce them to follow the newly credentialed advisor's recommendations.
Keeping Perspective
Certainly, not all financial professionals who earn designations with less stringent requirements are dishonest orincompetent; merely that many of them have not received the same level of training and experience as others whohave earned one or more of the older designations. But even the lesser designations can help advisors to betterassist their clients, if only in specific areas. In terms of marketing, however, the uneducated public will have difficultydiscerning between the services that a Certified Senior Advisor and a Certified Financial Planner
are able toprovide for them. This, of course, has fostered some resentment from advisors who have earned the more difficultcertifications. Many of them are seeking legislation that would either curtail the influx of new designations or clearlylabel them as being lesser in scope. Time and legislation will ultimately determine how this issue gets resolved.For more insight, see
The Alphabet Soup Of Financial Certifications 
.
 
Page 2 of 3This article and more available at Investopedia.com6/24/2008http://investopedia.com/printable.asp?a=/articles/financialcareers/07/different_designations...
 
 
CPA, CFA Or CFP® - Pick Your Abbreviation Carefully
 
by Daniel Myers,CFA (Contact Author|Biography
 
)
 Whether you're searching for a good career path or just curious about the different financial credentials, this articlewill help guide you through three of the best known professional designations in the financial industry:Certified PublicAccountant(CPA),Chartered Financial Analyst(CFA) andCertified Financial Planner ® (CFP®). Each of these three has a core career focus, and, although their abbreviations often sound interchangeable, each designation gives yousomething unique. Follow along to discover how much coursework and study each designation requires, whatcareers they typically lead to and how much you could make. (For a basic breakdown on these designations andmore, check out
The Alphabet Soup Of Financial Certifications 
.)
Certified Public Accountant (CPA)
 For most people, a CPA is best known as the person who prepares tax returns. CPAs certainly do that, but they domuch more as well. A CPA license is legally required in order to do particular jobs, such as public accounting(independent auditing). However, one does not require a CPA license in order to prepare tax returns. State lawsgovern what CPAs can and cannot do with their license. (If you're looking for a good accountant, check out
Crunch The Numbers To Find The Ideal Accountant 
.)
Requirements: 
Requirements vary by state, but in general, in order to sit for the CPA exam, applicants must have abachelor's degree with 120 semester hours. To obtain the CPA designation, applicants must pass the Uniform CPAExam, gain relevant work experience and meet additional educational requirements. Overall, additional educationalrequirements usually consist of 24-30 semester hours in accounting, earned through a graduate or bachelor's degreein business. Many states also require a minimum number of one to two years accounting and/or auditing experience. Aside from the experience requirements, a CPA license usually takes about 18 months to complete beyond theeducational requirements. Many students choose to pursue a masters degree in accounting to fulfill their educationalrequirements.
Exam 
: Although classroom requirements are a major requirement, the CPA exam is a difficult task in its own right.Exams are administrated by the American Institute of Certified Public Accountants, the governing body of CPAs in theUnited States. The 14-hour computerized exam consists of four sections:1.Auditing andattestation 2.Financial accounting and reporting3.Regulation4.Business environment and concepts
Careers: 
Many undergraduate accounting students receive job offers long before they graduate. Accounting is an in-demand field and is projected to continue to be so. According to the U.S. Bureau of Labor Statistics, employment isprojected to grow 18% between 2006 and 2016; this amounts to nearly 226,000 new positions. For CPAs wishing toadvance to senior-level corporate positions, two to three years of experience at a major accounting firm is crucial.For those seeking gainful employment but not wishing to climb the corporate ladder, there are numerous positionsavailable in every city for accountants at small accounting firms and practices. For more ambitious job seekers,lucrative CPA positions are available in hedge fund accounting andSarbanes-Oxley-related work. The chiefrequirements for these positions are experience and an excellent educational background. (To learn the history of theaccounting profession, check out
The Rise Of The Modern-Day Bean Counter 
.)
Chartered Financial Analyst (CFA)
The CFA reputation in the business community is world class, and CFA charterholders work in many countriesaround the world. The CFA program is very broad, and might be more aptly described as the equivalent of a master'sdegree in finance with accompanying minors in accounting, economics, statistical analysis and portfolio management.Although the CFA designation is not a legal requirement to perform work as afinancial analyst(the cornerstone CFA job), it is a great way to get a foot in the door for one of the most difficult jobs to crack. (For more on the pros andcons of this demanding designation, see
So You Want To Earn Your CFA? 
and
Becoming A Financial Analyst 
.)By reputation, the best way to get a finance job on Wall Street is to get a Master of Business Administration degreefrom one of a handful of exclusive schools including Wharton, Harvard and Stanford. The second best way is to earn
 
Page 1of 3This article and more available at Investopedia.com6/24/2008http://investopedia.com/printable.asp?a=/articles/professionaleducation/08/CFA-CPA-CFP...

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