Have you ever taken the time to research your potential financial advisors?
When it comes to retirement, taxes, investments, life planning, and more, having someone to help makes the process much less daunting.
Finding a trustworthy financial advisor with top-notch experience and extensive knowledge is not always easy, but doing your due diligence can give you the confidence that your financial team is working for you and on your side.
Learning more about prospective financial advisors is crucial to choosing the right person for you and your finances; this includes understanding their designations.
No, financial designations aren’t just decorative letters advisors include in their profile; they carry real meaning and can demonstrate your potential advisor’s skills, interests, and specialties. All of this information will help you decide whether or not they are a good fit for you and your needs.
So, what are financial advisor designations, and what value can they bring to your engagement?
Let’s find out!
What Are Financial Designations?
During your search for a financial advisor, you may have noticed a few letter combinations after their name; those are their designations.
Many advisors pursue different designations to grow and better serve their clients throughout their careers. Earning a designation or certification gives a financial advisor additional knowledge and expertise in their profession.
How do advisors earn these badges of honor?
They can engage in educational programs for an array of topics like personal financial planning, taxes, and investments, or specific niches like insurance and retirement planning.
What Does Each Letter Stand For?
While financial designations may seem like an endless game of alphabet soup, these letters can carry weight and meaning. They indicate the type of work that advisor specializes in, the code of conduct they follow, and may also denote their interests and career trajectory.
Now that you have an idea of what financial designations are let’s put these letters in context. Below, we’ll dive into TFS’s specific designations and certifications and what they mean.
One of the most prestigious designations for financial advisors is a CERTIFIED FINANCIAL PLANNER™ designation (CFP®).
The financial community often considers this designation the gold standard of excellence, and successfully going through the process is a significant career step.
Well, for one thing, it’s quite challenging to pass.
The most recent pass rate was only 58%. It’s an incredibly demanding and comprehensive exam, but all the hard work is certainly worth it as you learn skills that truly enable you to provide high-quality, comprehensive financial advice.
It’s incredible to see that more and more people are earning this certification. Recent data from the CFP® Board shows that as of December 31, 2021, the number of CFP® professionals in the U.S reached an all-time high of 92,055, an increase of 3.8% over 2020 numbers.
CFP® professionals go through an extensive educational program to earn their certification. The board requires a set amount of previous experience to utilize the CFP® marks once achieved. You then have to study and pass the exam. Once you pass, CFP® professionals must adhere to specific ethical standards and pursue ongoing continuing education.
Our founder, Dale Terwedo, is a CFP® professional, and this credential set the foundation for the holistic and comprehensive approach that TFS uses in every aspect of client relationships.
The financial industry is multifaceted—there are numerous aspects, duties, responsibilities, and paths you can take. A Chartered Financial Consultant® (ChFC®) designation can help you take your skills to the next level.
Similar to the CFP® certification, the ChFC® designation focuses on critical areas of advanced financial planning and knowledge like special needs advising—an area where our Vice President of Financial Planning, Aaron Terwedo, is particularly passionate—retirement planning, tax planning, wealth management, and more. In fact, Aaron plans to pursue a separate special needs designation after completing the ChFC® coursework.
This program is designed for real-world applications and knowledge you can directly apply to your client relationships.
To obtain a ChFC® designation, financial professionals must take an educational course through the American College of Financial Services. Aaron is knee-deep in pursuing this designation and wants to add a special needs designation to his repertoire.
Life insurance is one of those things you hope you never have to use. With so much confusion around the insurance industry, it’s comforting to have a professional who can help you ascertain the type and amount of coverage best for your family.
A Chartered Life Underwriter® designation gives a financial advisor in-depth knowledge about life insurance underwriting concepts and laws.
This training instructs financial advisors with in-depth knowledge about life insurance on a legal and ethical level and how to provide the best solutions for a diverse range of clients. Earning a CLU® has been a top choice for insurance and financial professionals for almost 100 years!
Insurance planning is a significant part of a holistic financial plan. It’s just as critical to protect your wealth as it is to build it.
One of Dale’s most recent certifications under his belt is a Certified Professional Retirement Coach.
So much of typical retirement planning focuses on the dollars and cents—do you have enough money to support your lifestyle in retirement? Will it last? How will your investments, risks, and more change?
And while these are precious and pertinent discussions, one area that’s often left on the back burner is planning for your life in retirement.
Transitioning from 40+ hours of work, purpose, and community can be incredibly overwhelming, and a retirement coach helps you navigate these changes with confidence. We can review everything from identity and purpose to health (physical and mental) to relationships to work and wellbeing, and everything in between.
To become a Certified Retirement Coach, you must go through coursework and training different from tired and outdated practices. This program provides financial advisors with innovative tools and resources to help include non-financial aspects into the retirement process.
The Financial Paraplanner Qualified ProfessionalSM (FPQP®) program is excellent for new financial professionals. It is an introductory program for personal financial planning that requires no experience and provides new professionals and support staff with basic educational training about the industry.
Earning an FPQP® designation helps financial advisors start their careers and take the next step to become successful in the future. Both our Vice President, Aaron Terwedo, and our Registered Paraplanner, Dessie Spasov, carry this special designation.
One of the most critical elements of your income in retirement is Social Security. You likely have so many questions about the program like,
- How can you enroll?
- What can you expect your monthly benefits to be?
- When should you start taking Social Security?
- How can married couples make the most of their benefits?
- What are survivor benefits, and how do they work?
Luckily, Aaron Terwedo can help you navigate the answers to these questions and more! Recently, Aaron earned the NSSA® or the National Social Security Advisor Certificate. With this training, he took his knowledge and application of Social Security to the next level. He loves helping people consider creative strategies to maximize this important retirement benefit.
Behavioral Financial Advisor™
Have you ever considered why you make the financial decisions you do?
Believe it or not but that “why” drives so many of your financial choices, both consciously and unconsciously. So much psychology and neuroscience go into our decision-making habits, and understanding those connections can enrich the financial planning process.
That’s why Dale is a certified Behavioral Financial Advisor™. He’s passionate about helping you make value and goal-aligned decisions that put you on the right path, and this training helps him make creative and strategic recommendations. At TFS, you’re more than just a client, you’re part of the family, and this designation allows us to create more profound and lasting relationships with our clients.
Okay, now that we’ve reviewed a bunch of different designations, how does all of this affect you?
How Do Financial Designations Impact You?
Yes, that was a ton of information, but knowing these designations is essential and can provide a better understanding of the type of person you’re working with and entrusting your hard-earned money to.
You want to be certain that your advisor has the experience and the expertise to guide you in the right direction. These designations are one clue you can use to see if your advisor has what it takes to best serve you. Ask yourself,
- Does your advisor have the experience and the knowledge needed to serve you the best? Perhaps you’ll look for a CFP®, ChFC®, or FPQP®.
- What specialties and other designations do they have or are pursuing? This may indicate if they specialize in areas you need, like retirement or special needs planning.
- What standard of care do they follow? You want to ensure that your advisor operates in your best interest and keeps you at the center of all their recommendations.
It takes a lot to find the right financial team for you, and financial designations are simply one place to start.
Looking To The Future
Our team at TFS advisors has pursued and earned a handful of designations, including the ones above. We believe in lifelong learning and continuing our education to keep serving our clients better every day.
These designations allow us to show up for our clients in the best way possible and make us adaptable to help you as you move through significant life transitions.
Hopefully, you now understand why learning about financial advisor designations is crucial for your financial wellbeing. Beyond simply checking out an advisor’s credentials, you should also explore their website because it can reveal more about who they serve, their processes, fee structure, and more.
Before you hand over your money, dreams, and goals to someone, you want to do your research! We’d be honored to be part of your financial and personal journey.
Schedule a meeting with our team to learn more about how we can best serve you and your family.