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Adviser Credentials: Beneficial or Bogus?

Are you confused by all those letters that you see after your adviser’s name? If so, it’s no wonder. Literally hundreds of financial designations exist around the world, with words like “Certified” or “Qualified” or “Accredited” in their names. And while they may sound impressive, many are confusingly similar. However, don’t be fooled – not all designations are worthy of their lofty-sounding names. When researching which adviser is most qualified to help you with your finances, it’s important to know the difference between a robust credential and a weekend crash course. In this post, I’ll explain our individual credentials at AMDG Financial. In a future post, I’ll include some tools you can use to conduct your own comparisons, as well as break down the qualities you should look for in a designation, including some questions to ask when interviewing a prospective adviser.

Certified Public Accountant

The Certified Public Accountant, or CPA designation, should be familiar to most people because it’s considered the gold standard for accounting and tax professionals. It’s offered and recognized in all 50 states, the District of Columbia and four U.S. territories, and U.S. CPAs are often members of the American Institute of CPAs (AICPA), which sets the ethical standards for the profession. To become a CPA in the state of Michigan, candidates must be of good moral character, complete at least 150 semester hours of college education, including a baccalaureate or higher degree with concentration in accounting, pass a rigorous examination, and meet experience requirements that include one year and 2,000 hours of qualifying experience gained through government, industry, academia or public practice. The experience must be verified by another CPA. Michele Ledford of AMDG Business Advisory Services and I are CPAs, and we are both members of the Michigan Association of CPAs (MICPA).

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Personal Financial Specialist

In addition to being CPAs, Michele and I also hold the Personal Financial Specialist, or PFS, designation. A Personal Financial Specialist is a Certified Public Accountant who meets requirements set by the American Institute of CPAs (AICPA) for financial planning. Those requirements include experience, education, passing an exam and meeting ethical standards. Candidates for the PFS designation must be CPAs in good standing, be members of AICPA, earn a minimum of 80 hours of personal financial planning education, pass a comprehensive personal financial planning exam, and have at least two years or 3,000 hours of full-time financial planning business experience. They must also agree to be bound by the AICPA's Code of Professional Conduct and meet continuing education requirements.

Accredited Investment Fiduciary Analyst™/ Accredited Investment Fiduciary®

The Accredited Investment Fiduciary Analyst® designation, or AIFA®, is considered by certification body Fi360 to be the master’s level of its programs, and is awarded to individuals qualified to perform, or assist in, assessments of an investment steward's, adviser's or manager's conformity to a Fi360's Global Fiduciary Standard of Excellence. AIFA® designees possess the ability and knowledge to advise clients of deficiencies in investment processes. It is also the required mark to perform a CEFEX Fiduciary Certification, the independent recognition of a fiduciary's conformity to all fiduciary Practices and Criteria. (fi360 is a provider of services that raise the level of professionalism in investment management.) This certification requires 10 hours of annual continuing education. I am an AIFA® designee, and AMDG Financial has held a certificate of registration from CEFEX for 11 years.

While the AIFA® designation qualifies a person to conduct a fiduciary assessment, the Accredited Investment Fiduciary®, or AIF® qualification provides investment professionals with the fiduciary knowledge and tools they need to serve their clients’ best interests. With the AIF® designation, professionals learn how to reduce risks through the documentation of fiduciary best practices, meet legal obligations by applying Fi360’s Prudent Practices® and investment procedures, and increase efficiency and effectiveness by adopting a consistent, repeatable process. Becky Stroud, a partner at AMDG Financial, and advisers Chris Carlson and Luke Noble have all achieved the AIF® designation.

Chartered Financial Analyst®

The Chartered Financial Analyst®, or CFA® designation, is one of the most respected and recognized investment designations in the world. CFA charterholders agree to follow the CFA Institute Code of Ethics and Standards of Professional Conduct. In addition, candidates must pass three levels of exams. Each exam requires approximately six months of preparation. Candidates must also demonstrate at least 48 months of qualified professional work experience. Becky Stroud is a CFA charterholder.

CERTIFIED FINANCIAL PLANNER™

A global certification available in 26 countries and territories around the world, the CERTIFIED FINANCIAL PLANNER™ or CFP® certification is the most desired and respected certification program for those who are committed to the practice of competent and ethical financial planning. Administered in the U.S. by the Certified Financial Planner Board of Standards, CFP® certification requires candidates to meet initial and ongoing requirements for education, experience and ethics. In addition, each candidate must sit for a comprehensive certification exam. To maintain their certification, CFP® professionals must meet ongoing continuing professional development obligations and continue to adhere to CFP Board’s Code of Ethics and Standards of Conduct. Chris Carlson recently achieved his CFP® certification.

Certified 401(k) Professional, or C(k)P®

Offered by The Retirement Advisor University in partnership with the Anderson School of Management Executive Education program, the Certified 401(k) Professional designation identifies individuals who have the knowledge and experience to favorably affect the outcome of corporate retirement plans. To become certified, candidates must have at least 10 plans under management or advisory, $30 million of assets under management or advisory, and three years of experience in the defined contribution industry. Chris Carlson holds this designation.

Why do we have so many credentials? At AMDG Financial, an expectation of excellence is part of our culture. When I started the firm in 2002, my goal was to be the best we could be for the families we serve. As we’ve grown, our staff remains committed to understanding as much as we can about the issues that affect our clients, and to staying as current as possible on the issues, laws and regulations that involve your taxes, retirement, and investments. The professional credentials we’ve chosen to pursue include some of the most rigorous, and we wouldn’t want it any other way.  

If you have questions about our certifications, we’d be glad to answer them anytime. You can also do your own homework on the “alphabet soup” of designations in the financial world by visiting FINRA’s website of professional designations and their requirements at https://www.finra.org/investors/professional-designations. Next up: we’ll examine what to look for when analyzing your adviser’s credentials, and what questions to ask when interviewing a potential adviser.

 

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