Contributed by Jeff Davis, Business Program Chair, Minnesota School of Business
People working in finance can have a wide variety of licenses, degrees, certifications, and professional designations. Part 1 of this article looked at required licenses: the Investment Adviser Representative (IAR) for those who give advice about stocks, bonds, or other securities, and the Registered Representative (stock broker) for those who buy or sell securities for clients.
Turning to areas that do not require a license, a degree from Minnesota School of Business and professional designations can help the financial professional obtain employment. It can also indicate the professional’s knowledge and areas of expertise to those looking for financial services.
From the professional’s prospective, the Master of Business Administration (MBA) with a Finance Emphasis will give the broadest education in finance, and is suitable for almost any career in the industry. Potential clients should note that someone with an MBA does not necessarily have specific expertise in financial planning for individuals. This degree also covers financial management, corporate finance, accounting, and other sub-fields.
A specific area of expertise can be demonstrated with a professional designation. In financial planning, the most widely known designation is the Certified Financial Planner (CFP), which is focused on investing for individual clients. The CFP program consists of seven courses, covering financial planning, insurance, taxation, retirement, investments, and estates. The designation also requires three years of experience in finance, a college degree, and successful completion of the CFP exam.
A related designation is the Chartered Financial Consultant (ChFC). The ChFC program contains the same seven courses from the CFP, plus two more advanced courses and additional exams.
Professionals with the Chartered Financial Analyst (CFA) designation tend to work for institutions as financial analysts, but are also knowledgeable in portfolio management and strategies for individual investors. The CFA is a self-study program of three levels, each of which concludes with a day-long exam. This is a very challenging designation to earn, as fewer than 20% of those who begin the program ultimately pass all three exams.
The College for Financial Planning offers a number of designations commonly used in the finance industry. For example, financial advisers at Edward Jones are required to earn the Accredited Asset Management Specialist (AAMS) designation. The AAMS program consists of twelve modules focusing on the many strategies used to fulfill an individual’s financial goals, and concludes with a comprehensive exam.
If you have questions about a retirement account at TD Ameritrade, you will speak to a financial professional with the Chartered Retirement Planning Counselor (CRPC) designation, also from the College for Financial Planning. Topics in the CRPC program include employer-sponsored plans like the 401k, individual retirement accounts (IRAs), when to retire, retirement plan distribution strategies, investment during retirement, incapacity and disability, and taxation in retirement.
As a final note, the “alphabet soup” of designations after someone’s name can give you an idea of their areas of specialized education, but it does not guarantee a good financial planner. A common suggestion is to ask friends or colleagues in your same life stage to recommend a planner. The Securities and Exchange Commission has further information on choosing a planner.