Alphabet Soup

Wikipedia defines a professional certification as a designation earned by a person to assure qualification to perform a job or task. Perhaps you have received a business card from someone with a slew of financial designations following his or her name. You might have been inclined to believe this person must be very knowledgeable and qualified to do everything related to personal finance. Unfortunately, that may not be the case.

With the number of financial designations climbing into the hundreds, financial advisors can readily collect enough letters to give their prospective clients the impression they are deeply knowledgeable in many subject areas. However, many of these designations do not at all demonstrate the experience or expertise of the person holding the designation. In fact, in recent years, some organizations have propagated numerous designations for the sole purpose of marketing an advisor’s services. Oftentimes, those new designations have specifically targeted seniors and their accumulated wealth.

Qualified practitioners can differentiate themselves from less experienced and less knowledgeable advisors by the professional certifications they obtain. Quality designations usually encompass the following:

  • Education requirements – a minimum of a bachelor’s degree
  • Professional examination – a rigorous, multi-part exam covering several subject areas
  • Requisite work experience – practical experience in the relevant field
  • Continuing education requirements – ongoing education requirements
  • Code of ethics and professional conduct – standards for ethical behavior
  • Disciplinary procedures – process by which certification of designees can be suspended or revoked

As Jason Zweig observed in his October 16th column in the Wall Street Journal entitled “Is Your Adviser Pumping Up His Credentials,” many of the well-established credentials, like the Chartered Financial Analyst (CFA), Certified Public Accountant (CPA) and Certified Financial Planner (CFP®), may involve significant study, require rigorous continuing education and enforce strict codes of ethics through the sponsoring organization’s disciplinary process. For example, to become a CFA charter holder, candidates must invest about 900 hours studying accounting, economics, finance, mathematics and ethics and pass three very difficult six-hour examinations. CPA practitioners must obtain a bachelor’s degree with a concentration in accounting and must pass a 14-hour exam delivered in four separate parts. Holders of the CPA must also obtain 120 hours of continuing education every three years. Holders of the CFP® designation have taken the equivalent of 15 credit hours of undergraduate-level courses and have passed a two-part 10-hour exam.

A high-quality designation usually involves considerable initial effort to obtain and additional ongoing requirements to maintain. In contrast, the sponsoring organizations of many of the newer credentials authorize the use of their certifications to individuals who simply pass short, open-book, online exams and pay annual membership fees.

While other worthwhile designations exist in the financial services industry, we agree with Zweig that the CFA, CPA and CFP® marks are the most important and relevant to best serving our clients. Truepoint has three investment professionals who hold the CFA designation (with two other individuals currently pursuing the certification), six CPA holders and nine CFP® practitioners (soon to be ten). We believe the integration of the knowledge embodied by these certifications helps us to deliver a complete level of expertise to high net worth individuals and families as they pursue their financial objectives.

Truepoint Wealth Counsel is a fee-only Registered Investment Adviser (RIA). Registration as an adviser does not connote a specific level of skill or training. More detail, including forms ADV Part 2A & Form CRS filed with the SEC, can be found at Neither the information, nor any opinion expressed, is to be construed as personalized investment, tax or legal advice. The accuracy and completeness of information presented from third-party sources cannot be guaranteed.

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