Obtaining an additional certification can significantly impact your marketability as an employee. This is true for many industries, but credentials are especially important in the financial services realm. Those three (or four) letters can mean the difference between a lucrative career or simply scraping by. However, in recent years there has been a significant increase in the number of professional designations available. Use this handy guide to find out which certification would be most helpful for your career objective.
This prestigious credential is administered by the CFA Institute, which calls it “the most respected and recognized investment management designation in the world.” The CFA program curriculum covers 10 key topics encompassing ethical and professional standards, quantitative methods, economics, financial reporting and analysis, corporate finance, equity investments, fixed income, derivatives, alternative investments, and portfolio management and wealth training.
To earn the CFA certification, you must pass three separate exams (Levels I, II, and III). Fees range from $2,400 to $4,590 based on when you register for the exam. CFA charterholders often command very lucrative salaries with additional performance-based incentives available. These individuals work primarily in the field of institutional money management and stock analysis and often choose to start their own private investment management companies
The CFP certification program covers more than 100 topics, including stocks, bonds, taxes, and insurance as well as retirement and estate planning. The cornerstone of the CFP program is the 170-question multiple-choice exam. Candidates must also complete a comprehensive course of study and have three years of practical experience or a two-year apprenticeship. Because of the sensitive nature of their work and the trust required of clients, the CFP Board mandates that all certification holders adhere to a strict code of ethics and makes it easy for the general public to quickly verify a CFP’s status.
Registering for the test costs $695 ($595 early registration and $795 late registration options are also available). However, fees for the education component can range from $3,000 to $10,000 (the price can rise even further if included as part of an undergraduate or graduate degree program). Financial advisors such as CFPs can expect job growth of approximately 30% through 2024 (much higher than average) as well as a median annual salary of $89,160.
Professionals with a CFS advise their clients on which funds offer the best ROI and may buy and sell funds on behalf of their clients (provided they are licensed to do so). The CFS financial designation is administered by the Institute of Business and Finance (IBF) and covers mutual funds, exchange-traded funds (ETFs), real estate investment trusts (REITs), closed-end funds, and similar investments. Candidates receive advanced training in fund analysis and selection, asset allocation, and portfolio development/management. The course is a distance-learning program broken down into six modules with proctored exams that can be taken online.
Fees for the CFS course cost $1,165 to $1,265 depending on if you choose to purchase practice exams and reference sheets. IBF classes are also approved for continuing education credit in a number of states and can count for as much as 60 hours. To maintain their CFS designation, individuals are obligated to complete an additional 30 hours of continuing education every two years.
The CLU credential is held mainly by insurance agents and is issued by The American College of Financial Services. Coursework centers on the fundamentals of life and health insurance, pension planning, insurance law, income taxation, investments, financial and estate planning, and group benefits. The American College offers flexibility for students, allowing them to choose from self-paced study, live webinars, and live reviews in a classroom environment.
The eight-course program costs $4,560 or you may choose to take single courses for $700 each. There is no comprehensive board exam; however, three years of professional experience are needed to earn the CLU as well as adherence to a stringent Code of Ethics and Procedures. 30 hours of continuing education is also necessary to maintain the credential.
The second certification on this list administered by The American College, the ChFC prepares individuals for careers in financial planning with an advanced curriculum focused on ethics, risk tolerance, time-value-of-money concepts, financial planning applications, regulatory issues, insurance planning, income taxation, retirement and estate planning, investments/portfolio management, and the legal and economic environment for financial planning.
ChFC courses are offered online with flexible, self-paced study options for $750 per course. Live webinars and intensive review classes can also be added for an extra fee ($200 or $300, respectively). Obtaining the ChFC designation requires the completion of all nine courses with grades of 70% or above on all exams, three years of industry experience, and a pledge to comply with The American College’s Code of Ethics and Procedures. ChFC holders can earn as much as 51% more than their peers.
The CIC program focuses on portfolio management and offered by the Investment Adviser Association (IAA). To qualify for this designation, candidates must be current CFA charterholders, demonstrate a minimum of five years of work experience in an “eligible occupational position” including at least one year of employment with an IAA member firm, provide work and character references, and endorse the IAA’s Standards of Practice as well as fill out a professional ethical conduct questionnaire. The term “eligible occupational position” is defined as more than 50% of time spent performing some combination of investment counseling and portfolio management duties.
The condition that individuals also hold the CFA designation essentially serves as the education component of the CIC credential. For this reason, the cost to obtain CIC certification is a $100 application fee. Charterholders must also submit an annual renewal form to the IAA that proves they continue to be employed by an IAA member firm in an “eligible occupational position” and have not faced any disciplinary proceedings due to misconduct.
The CIMA credential is reserved for investment consultants with at least three years of experience and is offered by the Investment Management Consultants Association (IMCA). Upon completion of six core topic areas (governance, fundamentals, portfolio performance and risk measurements, traditional and alternative investments, portfolio theory and behavioral finance, and the investment consulting process), students must pass an examination and pledge to follow a strict code of ethics.
To become certified costs between $5,000 and $8,000 depending on whether a candidate is a member of IMCA and which registered education provider they select. CIMA certification is a highly valuable credential and is very well respected in the investment consulting and wealth management industry. According to IMCA’s independent research, CIMA professionals earn an average annual salary of $265,000, outpacing such other prestigious designations as CFA, CFP, and CPA.