What are the different types of financial advisor certifications?
Expert financial advice comes in many different shapes, forms, and certifications, and we’ve explained them all to ensure you get the guidance you need.
Summary
There are nine different types of financial advisors, and each has its own specific areas of expertise.
Certified financial advisors may have completed various exams, accumulated practical experience, and undergone extensive mentorships.
Knowing how to find the right financial advisor can ensure that you get the right advice for your situation or circumstances.
Choosing a financial advisor may depend on your budget, referrals, research, and your unique needs.
What are the different types of financial advisors?
In 2023, 35% of Americans worked with a personal financial advisor. But choosing one for your specific circumstances, budget, and needs can be a bit of a challenge – unless you know what types of financial advisors are available.
There are nine different types of financial advisors. While most of them can provide services across a wide range of financial management topics, each one requires a unique certification to ensure specific, in-depth financial guidance for people with all sorts of needs, from investing to retirement planning.
Let’s take a look at the nine different types of financial advisors you might want to know more about:
Certified Public Accountant - CPA
Certified Financial Advisor - CFA
Certified Financial Planner - CFP
Registered Investment Advisor - RIA
Investment Advisor Representative - IAR
Chartered Life Underwriter - CLU
Chartered Financial Consultant - ChFC
Retirement Income Certified Professional - RICP
Certified Private Wealth Advisor - CPWA
When it comes to hiring someone to manage your personal finances, you don’t want a person who does it on the side or as a hobby. You want a professional, certified financial advisor that you can trust.
These financial advisor certifications ensure that only the most trustworthy and knowledgeable experts are allowed to provide financial services to people and entities around the world.
CPA
What does CPA stand for?
CPA stands for Certified Public Accountant.
CPAs earn their certification by passing a six-hour exam and accumulating over 6,000 hours of professional experience or 4,000 hours of apprenticeship experience in the field of financial planning.
Their services revolve around general financial planning, setting financial goals, and retirement or college planning.
What is a CPA best for?
A CPA is best for general financial advice regarding everyday money management issues.
CFA
What does CFA stand for?
CFA stands for Chartered Financial Analyst.
CFAs gain certification by passing three increasingly more challenging exams, obtaining relevant work experience, and obtaining multiple reference letters from superiors. They also need to apply to the CFA Institute.
CFAs provide comprehensive and advanced investment analysis and often help people develop a stronger investment portfolio.
What is a CFA best for?
CFas are best for new or thinly-spread (but serious) investors who need help managing investments and creating a diverse, powerful investment portfolio.
CFP
What does CFP stand for?
CFP stands for Certified Financial Planner.
In order to become a CFP, you must obtain a relevant degree, perform well in the CFP exam, gain relevant work experience, and demonstrate strong professional ethics.
A professional CFP helps people organize their finances in a variety of areas, including retirement, goal-setting, investments, taxes, and insurance.
What is a CFP best for?
People who require a strong, simple sense of direction with their finances should opt for a CFP.
RIA
What does RIA stand for?
RIA stands for Registered Investment Advisor.
To become an RIA, you do not need any specific certification but rather belong to a financial company that provides expert investment advice to clients.
RIAs have a strong fiduciary duty to fulfill, meaning that it is their responsibility to handle your money in the most appropriate and effective way possible.
What is an RIA best for?
RIAs cover a wide range of financial subjects relating to investments.
IAR
What does IAR stand for?
IAR stands for Investment Advisor Representative.
Similarly to RIAs, IAR professionals are closer to company representatives than educational certifications.
IARs are essentially employees of RIAs and often have at least one of the credentials listed above. This makes them very comprehensive financial advisors.
What is an IAR best for?
An IAR is best for accessing a broad range of financial advice relating to investments, such as basic financial planning, portfolio development, wealth management, and estate management.
CLU
What does CLU stand for?
CLU stands for Chartered Life Underwriter.
A CLU is a certified financial advisor that specializes in life insurance.
To officially become a CLU, you must obtain at least three years of relevant industry experience and complete a number of certification courses pertaining to life insurance, income taxation, life insurance, and retirement planning.
What is a CLU best for?
A CLU is good for providing highly specific advice about life insurance.
ChFC
What does ChFC stand for?
ChFC stands for Chartered Financial Consultant.
A ChFC certification can be obtained by completing a course that covers both estate planning and employee benefits planning.
Once the designation is completed, students are then required to continue earning relevant credentials in the financial field.
They offer fee-based financial planning.
What is a ChFC best for?
Insurance agents, brokers, and estate planners who require a trained eye in the financial field to consult with should choose a ChFC.
RICP
What does RICP stand for?
RICP stands for Retirement Income Certified Professional.
RICP financial advisors specialize in financial planning for retirees. They can offer social security guidance, employee benefits management, estate management, and planning for long-term retirement needs.
In order to become a RICP, you must be accredited by the American College of Financial Services.
What is a RICP best for?
A RICP is best for planning for retirement and ensuring a stable financial future after leaving the working world.
CPWA
What does CPWA stand for?
CPWA stands for Certified Private Wealth Advisor.
CPWA certifications arose as a response to high net-worth individuals seeking help with the management of their estates.
Accredited CPWAs are required to obtain five years of experience in financial services and complete a relevant course of study.
What is a CPWA best for?
These are good for high net-worth individuals seeking help with managing their financial affairs, protecting their assets, and passing their wealth on to the next generation.
How to find the right financial advisor
Identifying the right financial advisor for your unique situation can be difficult when you don’t know where to start. Here are some tips for how to find the right financial advisor:
Consider your budget: Different financial advisors charge different rates. Make sure your available budget lines up with the fees you can expect to pay going forward.
Understand your needs: The more you know about your financial situation, the easier it will be to select a financial advisor who can offer you help in managing it.
Perform research: Most financial advisors have websites and ratings you can peruse in order to determine whether they would be a good fit for your circumstances.
Get matched with the right advisor: Unbiased helps match people with the best financial advisor for their needs. This is an effective and reliable way to find what you need in a certified advisor.
Seek expert financial advice
Finding the right financial advisor for your situation can be a challenge, but once you have access to the right information, making a choice is easy.
By learning all of these financial advisor certifications, you have already taken a step closer to gaining control of your financial affairs. If you’d like to learn more about finances,
Unbiased can help. Get matched with the right advisor now and get expert financial advice that's unique to your circumstances and situation.
Writers
Our team of writers, who have decades of experience writing about personal finance, including investing and retirement, are here to help you find out what you must know about life’s biggest financial decisions.