FAQ - Frequently Asked Questions

Listed below are some of the questions that I’ve received recently regarding financial planning in general, my practice, and investing in general.

Q: What are all of those letters after your name?
A: I think the Financial Planning industry has gone above and beyond the call to provide certification programs of varying flavors to practicing professionals. Unfortunately, the number of designations that a planner has can make understanding what they mean just a little confusing.
For example, I hold three designations: CFP®, ChFC, and CCPS. I’ll explain these and several other common designations found in the financial industry. The designations below represent a few of the most common designations:

CFP® - CERTIFIED FINANCIAL PLANNER™
Held by: 42,000+ advisors
Granted by: CFP® Board of Standards
Requirements: Complete a CFP-Board registered education program and pass a 10-hour exam spanning two days. Must also have three years of experience in financial planning (five if no bachelor's degree) and complete 30 hours of continuing education every two years. Beginning in 2007, a bachelor's degree will be required.

PFS – Personal Financial Specialist
Held by: Approximately 3,000 CPA’s
Granted by: American Institute of Certified Public Accountants (AICPA)
Requirements: Pass a 100-question exam, be a CPA and a member of the AICPA.

CCPS –Certified College Planning Specialist
Held by: approximately 230 advisors
Granted by: National Institute of Certified College Planners (NICCP)
Requirements: Completion of a three-module course that includes paying for college, saving for college, and advanced college funding. Candidate must pass an exam associated with each of the three modules.

ChFC – Chartered Financial Consultant
Held by: 40,000+ consultants
Granted by: The American College
Requirements: Three years of experience and completion of eight courses: five required courses on insurance and financial planning, income taxation, planning for retirement needs, investments, and fundamentals of estate planning, and three electives chosen from the following: the financial system in the economy, financial planning applications, estate planning applications, financial decision making at retirement.

CLU – Certified Life Underwriter
Held by: 90,000+ agents
Granted by: The American College
Requirements: Similar to the ChFC: five required courses and three electives. Required courses include insurance and financial planning, individual life insurance, life insurance law, fundamentals of estate planning, planning for business owners and professionals. Electives are chosen from the following: individual health insurance, income taxation, group benefits, planning for retirement needs, investments, and estate planning applications. Anyone who holds a CLU may sit for the CFP exam without further coursework. Also, any CLU may obtain the ChFC designation by taking as few as three additional courses, depending on the electives chosen.

RIA – Registered Investment Advisor
This “designation” is not a designation at all, but rather a denotation that the advisor in question has registered with the state where they practice, or with the Securities Exchange Commission (SEC). It is actually illegal to use the letters “RIA” after your name (as an advisor), because they do not denote a specific qualification.

There are literally dozens more designations in the financial services industry, far too many to list here. If you come across a designation that you have a question about and would like to know what it means, drop me an email and I’ll do the best I can to get you an answer. You can always email me at jim@BFPonline.com, or call 217-488-6473.