Invest Wisely

Understanding Financial Advisor Credentials

by Ryan Kinnar5 min read
financial advisor credentials

You wouldn’t select a doctor who didn’t have an MD after their name or an accountant who didn’t have the label CPA. You should follow the same guidelines for choosing a financial advisor. Financial Advisor credentials will tell you about their qualifications.



When selecting a financial advisor, the designation CFP is an important credential. Certified Financial Planner or CFP means they must meet the requirements of the CFP board for the experience and education as well as in regards to ethics. They will have to pass an examination to receive this designation.


The examination covers a broad range of financial topics, including investment, insurance, estate planning, taxes and financial planning. Some advisors will focus on one area while others will strive to provide services in all or some of the topics.



The PFS designation is one in which only CPAs may receive. It is the credentials given out by the Certified Public Accountants. You may want to look for someone who has this designation if you need assistance with advanced tax issues along with your financial planning.


Designations for Retirement Planners

If your focus is on investing for retirement, you can find advisors credentials that show they focus on this area of investing. For instance, consider one of the following:

  • CRC – Certified Retirement Counselor is a designation created by the International Foundation for Retirement Education
  • RICP – Retirement Income Certified Professional is another credential focused on retirement investing from the American College
  • RMA – Retirement Management Analyst comes from the Retirement Income Industry Association


You want to hire someone who knows the details of retirement investing and can offer sound financial advice that will help you reach the level of income to live in retirement comfortably.


Designations for Investment Management

You may be interested in hiring an advisor who will manage your portfolio that includes various stocks and bonds. A CFA designation or Chartered Financial Analyst ensures that you have someone who has in-depth knowledge of securities. These are important financial advisor credentials and it means they have studied for years and passed multiple exams.


Another important designation is CIMA or Certified Investment Management Analyst. Someone with this certification would be knowledgeable about economics, behavioral finance, statistics and other categories. They can help you build a diverse portfolio that helps you achieve your goals.


How Important are Financial Advisor Credentials?

If you are starting out as an investor, you may not need someone with specialized knowledge right now. However, as you advance, you may focus your investments in one particular area, and it is helpful to have someone with the same area of focus. They will often seek out credentials in this area to prove they have the expertise to meet your needs.


It’s important to realize that not all designations have strict requirements and serve only to add the image of expertise without true knowledge. Make sure you research any credentials an advisor offers to find out what standards they had to meet and how their knowledge will benefit your goals for investing.


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