11 Financial Advisor Designations That Matter

May 12, 2019 | SeekAdvisor, Find an Advisor, Advisor Background Check, Advisor Designations

11 Financial Advisor Designations That Matter

No other industry supports more professional designations than the Financial Services Industry – at last count there were more than 50 professional designations and certifications used by Financial Advisors. 

The business of offering and granting Financial Advisors designations is a sort of industry within an industry.  Some designations can take years to obtain and are academically demanding – while others can be acquired with relative ease over a short period of time.  Knowing the difference between designations that have real merit versus those that are more easily obtained is an important step in understanding the competencies of any Advisor.  

Designations vs. Licenses

When a Financial Advisor holds a professional designation they demonstrate a level of proficiency that goes well beyond what is required of them to be licensed as a Financial Advisor. Professional designations are distinct from industry licenses.  Obtaining a license to sell stocks, ETFs, mutual funds or sell insurance isn't difficult. Obtaining a designation - such as a CFA, CA or MBA, on the other hand, can take several years of hard work, commitment and smarts. 

Consider for a moment what is needed to be licensed with IIROC (The Investment Industry Regulatory Organization of Canada).  IIROC registration allows someone to recommend stocks, bonds or mutual funds - and ultimately refer to themselves as a Financial Advisor/Investment Advisor. 

First of all, there are no prerequisites (education/experience) to getting licensed with IIROC - all you need is an IIROC Dealer who is willing to sponsor your registration.  Once sponsorship is secured candidates need to pass two courses - the Canadian Securities Course (two multiple choice tests) and the Conduct and Practices Handbook (one multiple choice test) and complete a 90 day training program conducted by the sponsoring Dealer.  This can be completed in 3 months at which point the candidate can be registered as a Financial Advisor.  Before 2½ year is up a third course - the Wealth Management Essentials (two multiple choice tests) course must be completed.

For those who are only interested in only selling mutual funds or insurance - the requirements are even less demanding.

Many designations, on the other hand, often require prerequisites such as industry experience and undergraduate degrees and involve a level of academic rigour that many Advisors aren't willing or able to commit to.

Before hiring a Financial Advisor, ensure they have some professional credentials beyond the minimum requirements. Most of the 100,000+ licensed Advisors in Canada do not have a professional designation of any kind.  To verify an Advisor's credentials, follow the links to the directories for each designation provided below.  To perform a more thorough investigation of a Financial Advisor see our post: How To Perform A Background Check On Your Canadian Financial Advisor.  

The list below provides some of the most recognized designations held by Financial Advisors in Canada today.


1. Certified Financial Planner®

Acronym:  CFP®

Specialty: Financial Planning

Grantor: FPCanada

Website: https://www.fpcanada.ca/

Program:  Self Study consisting 2 levels of core curriculum.

Completion Time: 2-3 years

Examination: 2 Exams (4 hours and 6 hours to complete respectively)

Prerequisites: 3 Years of qualifying (financial planning) experience.

Continuing Education: Yes. 25 hours annually.

Code of Ethics/Conduct: Yes.

Advisor Directory: Yes

General:  The CFP® is the standard bearer of all Financial Planning designations and the most commonly held. Currently there are over 17,000 Canadians who have the CFP®.  Along with the R.F.P.® (Registered Financial Planner) people holding either are generally considered to have a high level of competency as Financial Planners.

 

2. Registered Financial Planner

Acronym:  R.F.P.®

Specialty: Financial Planning

Grantor: Institute of Advanced Financial Planners (IAFP)

Website: https://www.iafp.ca/

Program: Peer reviewed Financial Plan + Letter of Engagement + completion of CFP® requirements or equivalent.

Completion Time: 1-2 Years

Examination: Two Exams.  Technical Competency & Practical Exam and Ethics Exam.

Prerequisites: Undergraduate Degree, 3 references from other financial services professionals, one of whom must be a practicing R.F.P.®

Continuing Education: Yes. 30 hours per year.

Code of Ethics/Conduct: Yes.

Advisor Directory: Yes.

General: Although not as well know as the Certified Financial Planner® designation the requirements in terms of knowledge and experience are no less demanding for R.F.P.® certification.  The course of study puts emphasis on practical knowledge and ethics.

 

3. Chartered Financial Analyst®

Acronym:  CFA

Specialty: Investment Analysis, Portfolio Management

Grantor: CFA Institute

Website: https://www.cfainstitute.org/

Program:  Self Study consisting of three ‘levels.  Each level takes 1 year to complete.

Completion Time: Minimum 3 years.

Examination: 3 Exams (1 for each level), 6 hours each.

Prerequisites: Undergraduate Degree.  4 years of professional experience.

Code of Ethics/Conduct: Yes

Advisor Directory: Yes

General:  The CFA® Charter is considered by many the gold standard in investment management designations.  The course of study is rigorous with approximately 300 hours of self study for each of the three levels.  In any given year only ~50% of candidates successfully complete each level.  The CFA® Charter is a globally recognized designation.

 

4. Chartered Investment Manager®

Acronym:  CIM®

Specialty: Portfolio/Investment Management

Grantor: Canadian Securities Institute (CSI)

Website: https://www.csi.ca

Program:  Self Study consisting of a combination of 3 or more CSI courses.

Completion Time: 200 Hours of self study.

Examination: 2 Exams.

Prerequisites: 2 Years of relevant work experience + Canadian Securities Course + Conduct and Practices Handbook.

Continuing Education: Yes. 30 hours annually.

Code of Ethics/Conduct: Yes

Advisor Directory: Yes

General:  The CIM® allows the holder to be registered as a Discretionary Portfolio Manager.  Holding this designation is intended to help the holder serve affluent client with both traditional and sophisticated portfolio strategies with an elevated degree of competence.

 

5. Master of Business Administration

Acronym: MBA or M.B.A.

Specialty: Program focus may vary. Core competencies include accounting, management, finance, business law, ethics.

Grantor: Various universities globally (graduate schools).

Website: n/a

Program:  May be only in-class or a combination of in-class, online, virtual learning.

Completion Time: 1-3 years, depending on the program/institution.

Examination: exams, case studies, projects.

Prerequisites: Undergraduate Degree (minimum), candidates may also require professional work experience.

Continuing Education: No

Code of Ethics/Conduct: No

Advisor Directory: No

General: An MBA is the most common graduate degree held by Financial Advisors and Portfolio Managers.  Only a small percentage of client facing Financial Advisors hold an MBA.  While the MBA is not necessarily specific to investment management, those who have completed an MBA program demonstrate they have an advanced knowledge of a broad range of competencies that apply to investment management and financial planning as well as other disciplines.

 

6. Financial Planner/Planificateur financier (Québec)

Acronym:  F.Pl.

Specialty: Financial Planning

Grantor: Institut québécois de planification financière (diploma), Autorité des marchés financiers (AMF)

Website: www.iqfp.org

Program:  IQPF Professional Training Course. In class and online sessions.

Completion Time: 1 Year or less

Examination: 1 Exam, 4 Hours

Prerequisites: University Level Financial Planning Program approved by IQPF

Continuing Education: Yes (40 hours every 4 years)

Code of Ethics/Conduct: Yes

Advisor Directory: Yes

General: Anyone wishing to use the Financial Planner title in Québec must hold the F.Pl. designation. Outside of Québec there are no restrictions on who can call themselves a Financial Planner.  The F.Pl. Professional Training Course is rigorous, and when combined with the prerequisites suggests that the holder of this designation has the highest level of Financial Planning academic training.

 

7. Chartered Professional Accountant

Acronym:  CA, CPA, CGA, CMA

Specialty: Accounting, Tax, Audit, Finance

Grantor: Chartered Professional Accountants Canada

Website: https://www.cpacanada.ca

Program:  6 Learning Modules

Completion Time: 2+ Years

Examination: Common Final Exam – takes place over 3 days.

Prerequisites: Undergraduate Degree with relevant degree credit courses, 30 months of practical, relevant experience.

Continuing Education: Yes – 20 hours annually and at least 120 hours over a 3-year period.

Code of Ethics/Conduct: Yes

Advisor Directory: Yes.  Link to Ontario Member Directory.

General: The CPA designation replaces the CA, CGA, CPA and CMA designations, all of which are no longer granted, but remain in use.  These accounting designations have application to a wide variety of industries.  Financial Advisors with an accounting designation are among some of the most highly qualified professionals who can provide expert advice in areas such as financial and tax planning.

 

8. Chartered Business Valuator

Acronym: CBV

Specialty: Business Valuation, Litigation Support

Grantor: Canadian Institute of Chartered Business Valuators (CICBV)

Website: https://cbvinstitute.com/

Program:  4 compulsory and 2 elective courses. 1500 hours of business valuation experience.

Completion Time: 2 Years

Examination: 6 Exams (1 For Each Course) + Membership Qualification Examination (4 Hours)

Prerequisites: Undergraduate Degree.

Continuing Education: Yes – 60 hours over a 3-year period.

Code of Ethics/Conduct: Yes

Advisor Directory: Yes

General: The CBV designation is a well-respected designation inside and outside of the financial services industry.  After completion of the course of study, designees are qualified to value businesses, their securities and intangible assets.  They are also able to support informed decision making for succession planning, mergers and acquisitions and strategic planning.

 

9. Fellow of the Canadian Securities Institute

Acronym:  FCSI®

Specialty: Unspecified.

Grantor: Canadian Securities Institute (CSI)

Website: https://www.iafp.ca/

Program: Passing the CSI Financial Services Industry: Business Drivers and Challenges course.

Completion Time: 6 Months

Examination: 1 Quiz and 1 Exam

Prerequisites: 7 Years of financial services industry experience + a recognized designation + completion (or prior completion) of 2 Canadian Securities Institute courses outside of the applicant’s designation stream.

Continuing Education: No

Code of Ethics/Conduct: Yes

Advisor Directory: Yes

General: The FCSI® designation does not necessarily suggest that the holder has gained proficiency in a specific discipline.  Instead this credential represents an honorific which can only be gained through experience, endorsement from peers, and requires an existing designation.  The additional educational requirements alone are not as demanding as many other designations – and while the Canadian Securities Institute claims the FCSI® is the “highest credential for financial professionals”, this is subjective.

 

10. Trust and Estate Practitioner

Acronym:  TEP

Specialty: Trusts, Estate Planning, Wills, Trust and Estate Administration

Grantor: STEP Canada

Website: https://www.step.ca

Program: 4 In-depth courses – Law of Trusts, Taxation of Trusts & Estates, Wills Trust & Estate Administration, Trust & Estate Planning

Completion Time: Up to 4 years

Examination: 4 Exams

Prerequisites: 2 years experience in trusts and/or estates.

Continuing Education: No

Code of Ethics/Conduct: Yes

Advisor Directory: Yes

General: The TEP designation is not specific to the financial services industry and is widely held by accountants and lawyers as well.  The course material is rigorous, and the designation is globally recognized.

 

11. Chartered Market Technician

Acronym:  CMT®

Specialty: Technical Analysis of Markets

Grantor: CMT Association

Website: https://cmtassociation.org

Program: 3 Levels of training, Self Study.

Completion Time: 3 Years

Examination: 3 Exams, Online.

Prerequisites: MTA membership, 3 years relevant experience, 3 references.

Continuing Education: 15 hours annually

Code of Ethics/Conduct: Yes

Advisor Directory: No

General: The path to the CMT® designation is a highly specialized course of study that focuses on aspects of market analysis not addressed by more traditional fundamental analysis of securities.  In addition to covering technical analysis (charting) the curriculum covers subjects such as behavioural finance, risk management and quantitative systems.

 

Danny MacKay is the founder of SeekAdvisor, a former Bay Street Executive and Industry Insider turned Investor Advocate.  If you have any questions or comments about this article, please feel free to reach out - info@seekadvisor.ca