“Financial advisor” is a generic term with no precise industry definition, and many different types of financial professionals fall into this general category. To be able to distinguish one financial advisor from another, many financial certifications are used in the Canadian financial services industry. Standards for achieving these certifications range from rigorous and demanding to less stringent.
Below are some purposes of getting a financial certification and which ones satisfy those purposes:
To build financial plans
Certified Financial Planner (CFP)
The most popular and comprehensive designation for advisors, CFP is held by approximately 18,000 advisors across Canada. It’s conferred by FP Canada (formerly known as Financial Planning Standards Council.
CFP candidates must complete an FP Canada-approved core curriculum at a post-secondary institution or online. The course, which requires about 40 hours of study, is offered by the Financial Advisors Association of Canada (Advocis), the Canadian Institute of Financial Planning and the Canadian Securities Institute (CSI), as well as by several universities and colleges. Requirements include taking a “capstone” course – the final course that ties together all the financial learning and competencies, culminating in a case study based on a real-world client and passing two exams.
Personal Financial Planner (PFP)
PFP is for bank employees offering financial advice, mutual fund representatives and investment advisors. Candidates must have at least three years of industry experience and pass the Canadian Securities Course (CSC) offered by the CSI before taking courses toward the PFP and then pass the PFP final exam. They must not let more than five years elapse between passing the CSC and writing the PFP exam, or they will need to take a refresher course.
Registered Financial Planner (RFP)
RFP is suitable for experienced advisors whose main activity is providing comprehensive financial plans. Conferred by the Institute of Advanced Financial Planners, RFP holders are more likely to work under a fee-only or fee-based structure than advisors holding a CFP or PFP.
RFP candidates must demonstrate industry experience and provide three referrals from professionals within the financial services industry, including at least one RFP holder. They must also submit a financial plan – including a letter of engagement – for review and complete two exams (one of which is dedicated to ethics and practice standards). They are paired with current RFP holders to mentor them throughout the study process.
Elder Planning Counsellor (EPC)
EPC is for advisors who want to specialize in the post-retirement market. Overseen by the Canadian Initiative for Elder Planning Studies Inc., EPC covers the financial planning concerns of seniors, such
as caregiving and housing and end-of-life planning, including legacy planning. Candidates must complete a three-and-a-half-day classroom course or distance learning (self-paced, to a maximum of six months), culminating in a final exam.
To be a portfolio manager
Chartered Financial Analyst (CFA)
CFA indicates a high level of knowledge and proficiency in advanced investment management. Institutional fund portfolio managers and private-wealth portfolio managers typically hold this globally recognized designation. The CFA program is provided in a self-study format overseen by the Virginia-based CFA Institute. The course is divided into three levels covering investment analysis, valuation and portfolio management. Each level requires an exam (scheduled either in June or December).
Chartered Investment Manager (CIM)
CIM is an advanced designation for investment advisors who want to provide discretionary portfolio management for high net-worth or institutional clients. Offered by the CSI, CMI is also an appropriate licensing qualification for research analysts, product managers and mutual fund wholesalers. Candidates must have two years of related work experience and complete one of two web-based learning paths, one of which is tailored to advisors holding a CFP or PFP.
To sell insurance
Chartered Life Underwriter (CLU)
CLU qualifies advisors to recommend insurance products to clients, specifically those who offer living-benefits products or advanced estate planning services (such as advice on risk management and wealth transfer). Overseen by the designation-granting and standard-setting body of Advocis, CLU is ideal for advisors working with high net-worth families and independent business owners. Candidates must take four requisite courses, which can be bypassed by CFP holders, and three core courses.
Certified Health Insurance Specialist (CHS)
Another Advocis offering, CHS is for advisors who sell living benefits, such as disability, critical illness and long-term care insurance. CHS replaces the registered health underwriter designation. Candidates must complete three courses (two core courses and one elective).
To specialize in divorce
Chartered Financial Divorce Specialist (CFDS)
CFDS is for advisors who already have an existing financial designation and are interested in serving clients undergoing a divorce or marital separation. It’s monitored by the Sudbury, Ont.-based Academy of Financial Divorce Specialists. A CFDS holder can work with lawyers and mediators, or directly with clients, to assess potential financial settlements. Required studies consist of four modules and exams, including a final case-study exam.
Certified Divorce Financial Analyst (CDFA)
Like the CFDS, CDFA is for advisors interested in working in pre-divorce financial planning. It’s overseen by the Durham, N.C.-based Institute for Divorce Financial Analysts. Requirements include a three-module self-study program and a final exam.