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What are the Different Types of Financial Advisor Certification?

By D. Waldman
Updated: Feb 07, 2024

When a person considers pursuing a career as a financial advisor, he may believe the job itself is all about numbers. He will soon find out, however, that there is a great deal of emphasis and importance placed on letters that follow his name on his business card as well, particularly those that designate the various financial advisor certifications he currently holds. A financial advisor can become certified in a variety of skill sets based on his individual area of expertise. The most common certifications sought are Certified Financial Planner&reg (CFP&reg), Certified Public Accountant (CPA), Chartered Financial Analyst (CFA) and Chartered Life Underwriter (CLU).

A financial advisor holding a CFP&reg certification has proven himself to be a well-rounded finance specialist with knowledge of all major aspects of the financial industry, specifially individual financial planning needs. He has successfully completed and passed an examination, has acquired the required level of experience in the industry and has obtained the minimum education background. He is also required to complete ongoing continuing education requirements and periodic retesting in order to keep his financial advisor certification of CFP&reg current and in good standing.

The financial advisor certification of CPA is granted to an individual who specializes in the accounting field and who has met the necessary education, experience, licensing and examination requirements. A CPA prepares and files tax returns, as well as performs subsequent tax audits, either for individuals or businesses. An individual who has already been designated a CPA will sometimes also seek a financial advisor certification as a Personal Finance Specialist (PFS), showing his understanding of personal financial planning as well as taxes.

A CFA financial advisor certification is granted to an individual who has successfully passed three certification exams after obtaining three years of relevant accounting experience. The certification is designed to convey an extensive understanding of accounting procedures, as well as portfolio management and investment analysis. Many individuals who hold a CFA certification will also hold a Chartered Investment Counselor (CIC) designation. This supplemental financial advisor certification shows that the individual has demonstrated a more detailed understanding of portfolio management standards and practices than required by the CFA.

CLU certifications are given to an individual who focuses on the economic aspects of various insurance and benefits policies. It involves a combination of study programs and an extensive series of examinations. A CLU-certified financial advisor is equipped to deal with a wide array of topics, including estate planning, life and health insurance, retirement planning and investment management. CLU certifications are often required for individuals seeking work in the insurance industry who will be dealing with the financial aspects of the industry.

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