What’s in a professional designation?

Wondering what the different professional designations in finance really mean? The following overview can help. There are many different certifications that financial advisors commonly achieve. They demonstrate that the professional has invested time and energy in increasing his or her knowledge of a specific financial area. Here are ten of the most common: 

• AAMS^® (Accredited Asset Management Specialist^SM) - Professionals who hold the AAMS designation have completed a course of study through the College of Financial Planning that includes investments, insurance, tax, retirement, and estate planning issues. The designation, awarded by the College of Financial Planning, must be renewed every two years.

• ADPA^® (Accredited Domestic Partnership Advisor^SM) - Individuals who hold the ADPA designation have completed a course of study encompassing wealth transfers, federal taxation, retirement planning, and planning for financial and medical end-of-life needs for domestic partners. Additionally, individuals must pass an end-of-course examination that tests their ability to synthesize complex concepts and apply theoretical concepts to real-life situations.

• AEP^® (Accredited Estate Planner^®) - The AEP designation is awarded by the National Association of Estate Planners & Councils. It’s a graduate level specialization in estate planning, generally obtained in addition to already recognized professional credentials within the various disciplines of estate planning.

• APMA^® (Accredited Portfolio Management Advisor^SM) - Individuals who hold the APMA designation have completed a course of study encompassing client assessment and suitability, risk/return, investment objectives, bond and equity portfolios, modern portfolio theory and investor psychology.

• CAP^® (Chartered Advisor In Philanthropy^®) – This designation can be received from the Richard D. Irwin Graduate School of The American College. The program provides professionals in the nonprofit and financial services fields with the knowledge and tools needed to help clients reach their charitable giving objectives while also helping them achieve their estate planning and wealth management goals. The curriculum addresses the advanced design, implementation and management of charitable gift techniques and strategies.

• CDFA^TM (Certified Divorce Financial Analyst^®) - The Institute for Divorce Financial Analysts™ awards this designation and trains financial and legal professionals to provide financial information and assistance that includes evaluating the tax implications of dividing property and the settlement options for dividing pensions, marital property and awarding of child and spousal support.

• CFP^® (CERTIFIED FINANCIAL PLANNER™) and ChFC^® (Chartered Financial Consultant) — These individuals have passed rigorous exams that typically require one-to-two years of study and ongoing education. The coursework covers key financial planning topics in-depth and helps these professionals learn how to develop well-balanced financial strategies for their clients.

• CLTC (Certified Long-Term Care) - The program is independent of the insurance industry and is designed to provide financial service professionals with expertise and tools to address long-term care planning with their clients.

• CLU^® (Chartered Life Underwriter^®) – The requirements to achieve the CLU certificate include course work and a series of examinations covering life insurance, planning for business owners and professionals, estate planning, investments, law, health insurance and more.  

• CRPC^® (Certified Retirement Planning Counselor^®) – A financial professional receives this license through The College of Financial Planning by completing course work and a series of examinations that cover pre-and post-retirement needs, asset management, estate planning and the entire retirement planning process using models and techniques from real client situations.

Keep in mind that the designation alone does not necessarily ensure that an individual is the right fit for you. It’s only one factor to consider when you’re deciding who to add to your professional team.

Jose Vicente, CFP^®, CLTC, is a Financial Advisor Business Financial Advisor with Ameriprise Financial Services, Inc. in Saddle Brook, NJ. He specializes in fee-based financial planning and asset management strategies and has been in practice for 8 years. To contact him: http://www.ameripriseadvisors.com/jose.x.vicente, (201)221-2700 ext. 12705,  250 Pehle Ave. Suite 500, Saddle Brook, NJ 07663.  

Ameriprise Financial and its representatives do not provide tax or legal advice. Consult your tax advisor or attorney regarding specific tax issues