When it comes to financial planning, there are a number of certifications you can pursue. The five most common ones are Certified Financial Planner (CFP), Certified Public Accountant (CPA), Chartered Financial Consultant (ChFC), Chartered Financial Analyst (CFA), and Chartered Investment Counselor (CIC).
The financial industry is one of the fastest-growing in the world. According to Forbes, it is on track to grow by 7% annually through 2020. With so many opportunities for growth, it’s no wonder that people are flocking to these fields in droves.
In fact, according to the Bureau of Labor Statistics (BLS), there were about 2 million financial services workers in 2018. This number is expected to increase by almost 25% by 2024.
Certified Financial Planner
The Certified Financial Planner designation is one of the most highly sought after in the field of personal finance. To become a CFP, you must pass a rigorous test administered by the Board of Financial Planning Standards and Ethics. To maintain your certification, you must complete continuing education courses every three years.
Certified Public Accountant
A CPA provides tax services and financial management consulting. CPAs must have at least 150 hours of education beyond an undergraduate degree in accounting or business administration and pass a national exam administered by the American Institute of Certified Public Accountants, which administers its own continuing education requirements as well.
Chartered Financial Consultant
A ChFC is similar to a CFP but focuses on asset management for high net worth individuals. This designation requires 120 hours of education beyond an undergraduate degree in finance or business administration and passing an exam administered by the Investment Management Consultants Association International.
Chartered Financial Analyst (CFA)
The CFA is one of the hardest certifications to earn; it takes at least seven years of study to complete all requirements for this designation (including acquiring 3,000 hours of qualifying work experience). Additionally, candidates must pass three levels of six-hour exams covering topics like economics, ethics, mathematics and portfolio management before they are awarded their charter by the CFA Institute.
Chartered Investment Counselor
A Chartered Investment Counselor (CIC) is a subset of the CFA designation specifically for those working in investment counseling and portfolio management. To be eligible to earn a CIC designation, a candidate must be working at an Investment Adviser Association-member firm and have at least five years’ experience as either a registered representative or registered investment adviser representative under the Investment Advisers Act of 1940.
The financial industry may at times seem like a major undertaking, but after reading this guide, you should have a better idea of what you’re getting into. We covered each of the five certification options here and briefly outlined their differences.