Financial advisors often display letters after their names—CFP, CFA, ChFC, and more. These designations indicate specialized training and ongoing education requirements. Understanding what they mean can help you evaluate an advisor's qualifications.
💡Key insight: Designations indicate training and knowledge, but they don't guarantee good advice or ethical behavior. Use them as one factor in your evaluation, not the only factor.
The Major Designations
CFP - Certified Financial Planner
What it means
The CFP is widely considered the gold standard for comprehensive financial planning. Holders must complete extensive coursework, pass a rigorous exam, have qualifying work experience, and commit to ongoing education and ethical standards.
Requirements:
- Bachelor's degree
- CFP Board-registered education program
- 6,000+ hours of professional experience (or 4,000 hours in apprenticeship)
- Pass a 170-question, 6-hour exam
- 30 hours of continuing education every 2 years
- Adherence to CFP Board's Code of Ethics
Best for: Comprehensive financial planning, retirement planning, tax planning, estate planning integration
CFA - Chartered Financial Analyst
What it means
The CFA is focused on investment analysis and portfolio management. It's one of the most difficult financial designations to obtain, with historically low pass rates. CFAs are experts in evaluating securities and managing investments.
Requirements:
- Bachelor's degree (or be in final year)
- Pass three progressive exams (typically takes 2-5 years)
- 4,000 hours of relevant work experience
- CFA Institute membership and annual ethics attestation
Best for: Investment management, portfolio construction, security analysis
ChFC - Chartered Financial Consultant
What it means
Similar to the CFP but with more coursework and no comprehensive exam. The ChFC covers additional topics like behavioral finance and special needs planning. It's awarded by The American College of Financial Services.
Requirements:
- 8 college-level courses (vs. CFP's education requirement)
- 3 years of full-time business experience
- 30 hours of continuing education every 2 years
Best for: Comprehensive planning, particularly for complex situations
PFS - Personal Financial Specialist
What it means
The PFS is exclusively for CPAs who want to demonstrate financial planning expertise. It combines tax expertise with financial planning knowledge—a powerful combination.
Requirements:
- Must be a CPA in good standing
- Pass the PFS exam
- 3,000 hours of personal financial planning experience
- 80 hours of financial planning education every 5 years
Best for: Tax-focused financial planning, particularly for high-income individuals or complex tax situations
Comparing the Designations
| Designation | Primary Focus | Difficulty | Ideal Client |
|---|
| CFP | Comprehensive planning | High | Anyone needing full financial plan |
| CFA | Investment analysis | Very High | Those focused on investments |
| ChFC | Advanced planning | High | Complex financial situations |
| PFS | Tax + planning | High (CPA required) | Tax-sensitive planning needs |
Other Designations You Might See
- CPA (Certified Public Accountant): Tax and accounting expertise, not specific to financial planning
- CLU (Chartered Life Underwriter): Life insurance and estate planning focus
- RICP (Retirement Income Certified Professional): Specialized in retirement income strategies
- CIMA (Certified Investment Management Analyst): Investment consulting and portfolio management
- AIF (Accredited Investment Fiduciary): Focus on fiduciary best practices
What About No Designation?
Some excellent advisors don't hold major designations. This doesn't automatically disqualify them—experience and track record matter too. However, designations do demonstrate:
- Commitment to the profession
- Baseline knowledge verified by examination
- Ongoing education requirements
- Accountability to a professional body
How to Use Designations in Your Search
Recommendations by need:
- Comprehensive financial planning: Look for CFP or ChFC
- Investment management focus: CFA is valuable
- Tax-heavy situations: PFS (CPA with planning expertise) is ideal
- Multiple designations: Shows breadth and commitment, but one solid designation is often sufficient
Find Advisors by Designation
