Objective information about retirement, financial planning and investments


Financial Advisor Credentials


The Wall Street Journal recently ran an article “Is Your Advisor Pumping His Credentials?” The article discussed how some of the initials that some advisors use after their names may not be as impressive as he/she would like you to think.

Rather than question any of the credentials and designations that exist in my profession, I’d like to discuss several that I hold in terms of my career as a financial advisor.

Certified Financial Planner CFP®

I earned this designation in 1996, about the time that I entered the financial planning profession. Over a period of several years I passed exams in the areas of financial planning, insurance, retirement planning and employee benefits, investments, taxes, and estate planning. This was culminated by a two day, ten hour comprehensive final exam.

Currently about 52% of those who sit for the exam pass it. On an ongoing basis I am required to complete 30 hours of continuing education every two years. Two of the hours must be in an approved ethics course.

NAPFA Registered Advisor

NAPFA stands for the National Association of Personal Financial Advisors. NAPFA is the largest professional organization of fee-only financial advisors in the country. NAPFA members are required to complete 60 hours of continuing education every two years, including the required areas of retirement planning, investments, tax, estate planning, insurance, ethics, and client communication. Each member signs a Fiduciary Oath and reaffirms that oath every year at renewal. By far the biggest benefit of NAPFA membership is the ability to interact with a group of like-minded advisors who are willing and ready to share their wealth of industry knowledge and experience. I regularly utilize this knowledge base for the benefit of my clients.

MBA Degree

I earned my MBA at Marquette University in Milwaukee, Wisconsin. I was especially fortunate to be the recipient of a scholarship that covered tuition, and a graduate assistantship that covered living expenses.

The MBA degree was beneficial as I launched my career in corporate finance and accounting. While not directly beneficial as a financial planner, I did learn much about various areas of business. Being a financial advisor is a business and I do find much of the knowledge gained from my MBA studies is very applicable in this role.

My undergraduate degree was in finance from the University of Wisconsin-Oshkosh. This did provide much of my initial knowledge of finance, accounting, economics, and statistics.

Illinois Insurance License

Frankly, I hold this license because I was told that I could be prosecuted for providing insurance advice to my clients without it. I have never checked into whether or not this is true. Essentially the 30 hours of continuing education required every two years is pretty simple and takes virtually no time to complete. There are numerous vendors who provide insurance CE, most of it involves open book tests that are completed online. It is very disappointing to me that the bar to initially receive and to maintain an Illinois Life and Health Insurance License is so low.  (As a fee-only advisor I do not sell insurance or any other financial or investment products.)

There are many other designations that enhance a financial advisor’s knowledge and allow him to add value to his clients. The best route is to ask your advisor about her credentials and her professional designations and affiliations. Ask what was required to earn the designation, what are the continuing education requirements tied to the designation, and what value this adds to their ability to serve your needs.

Here is the link to the Wall Street Journal article referenced above.

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  1. Nice blog,I will keep my eyes on this blog.Hope you can keep posting.

    financial planners Connecticut

  2. Thanks for visiting the site and glad you enjoyed this post. I try to publish 3-4 posts per month. I have also begun blogging for Equifax Personal Finance Blog, here are my first two posts there. I will generally have a new post on that site every Tuesday. http://retirement.equifax.com/2011/02/planning-tax-deferral-strategy-for-your.html and http://www.stumbleupon.com/su/1zoMNh/retirement.equifax.com/2011/02/4-tips-for-loaning-money-to-family.html

  3. Passing those exams are really not that easy. I have known friends and family friends who have taken exams like CFP exam for more than once or twice before they actually passed it (what's the maximum tries? 3 exams?)

  4. Thank you for your comment. I passed the final in '96 and took the six exams leading up to the final over a three year period. None of them were easy, especially the 2 day 10 hour final. I was able to pass it on my first attempt with the help of many hours of studying and taking a comprehensive week-long review course.

  5. I am planning to move out for my first time and I would like to know about how much do I need to have saved financial planning in order to live without worrying?

  6. A good starting point is to make a budget to determine your ongoing and periodic cash needs.

  7. Mike Carter says

    Thanks for sharing this. I think that some of the best financial advisers can help people decide on the best ways to manage your investments. They sure know more than I do when it comes to that kind of stuff.


  1. […] or does she simply try to sell you more financial products?  Moreover does your advisor have the proper credentials such as the Certified Financial Planner (CFP®) […]

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