The Wall Street Journal this past weekend included an article, Is Your Adviser Pumping Up His Credentials?, which took a look at all of the various credentials an advisor can earn.The article emphasized that it is important for an individual investor to understand the differences between what the Wall Street Journal lists a, “highly rigorous” and “less rigorous” designation. The highly rigorous designations as delineated by the Wall Street Journal included Certified Financial Planner (CFP), Chartered Financial Analyst (CFA) and Certified Public Accountant (CPA).
“Professional certifications arose decades ago as a way for firms in various industries to identify qualified practitioners. In the financial realm, many well-established credentials, including the certified public accountant, chartered financial analyst and certified financial planner designations, require long study, demand continuing education and enforce strict codes of ethics… Many newer credentials, however, require comparatively little effort on the part of the students.
The vast majority of financial-services professionals are honest and competent. And there is nothing inherently wrong with collecting credentials. But while some are rigorous, says John Gannon, head of investor education at Finra, ‘others you could probably get in a weekend.'”