With different financial advisor designations, advisors can offer helpful advice in several areas.
If you’ve ever thought about working with a financial security advisor*, you may be familiar with some of the designations that appear next to an advisor’s name, like CFP®, CLU, Fin Pl. and CFA. But what do each of these designations mean for you and what do they say about the advisor?
Helping you understand the financial planning industry’s key certifications
It’s important that the advisor you choose has the right qualifications to help you effectively manage your finances and make progress towards your specific financial goals. With that in mind, let’s take a quick look at some of the more popular advisor designations.
Certified Financial Planner (CFP)*
Today, one of the most common credentials in the financial planning industry is the CFP, or Certified Financial Planner designation. It has become the most important qualification for financial planners because it requires a candidate to follow a rigorous certification process carefully overseen by the Financial Planning Standards Council (FPSC), a non-profit organization that administers the designation in Canada. Additionally, the CFP credential includes a robust set of ethics and conduct standards that designation holders must follow.i
To obtain the CFP designation, candidates must complete a lengthy study program that focuses on taxation, investments, retirement planning, estate planning, family law and more – in other words, all the topics you need help figuring out when you’re putting together your financial plan.
Financial planner (F. Pl.)
Quebec has its own financial planning designation, the Financial Planner, or F. Pl., which is administered by the IQPF (Institut québécois de planification financière).
To achieve the F. Pl., candidates must take an IQPF-approved university-level financial planning program and the IQPF Professional Training Course. Those pursuing the F. Pl. must also pass a comprehensive exam.ii
Chartered Life Underwriter (C.L.U.)
The Chartered Life Underwriter (CLU) designation is a specialized designation focused on the planning and insurance needs of clients with small businesses or complex personal planning situations. The CLU requires advisors to take 3 insurance-focused courses and pass exams following each course.
Certified Health Insurance Specialist (CHS)
The Certified Health Insurance Specialist (CHS) designation focuses specifically on health insurance. According to Advocis, the Financial Advisors Association of Canada, the CHS was introduced in 2011 to help “raise the bar on professional standards and practice methods of financial advisors in the health insurance sector”.iii
In addition to taking courses focused on disability insurance, critical illness insurance, group benefits and long-term care, those pursuing a CHS must also take a course focused on more general topics in financial planning.
It’s important that the advisor you choose has the right qualifications to help you effectively manage your finances and make progress towards your specific financial goals.Opens a new website in a new window
Chartered Financial Analyst (CFA)
The CFA is considered by many to be one of the most challenging designations to get. Aimed primarily at candidates with an interest in investment analysis and portfolio management, candidates take 4 years to complete 3 exams. There are also prerequisites, including a Bachelor’s degree (or equivalent) and at least 4 years of professional experience. Overall, the extensive preparation required has made the CFA the gold standard for investment portfolio managers and financial analysts in Canada.iv
Chartered Investment Manager (CIM)
The Chartered Investment Manager (CIM) designation is also focused on investment analysis and portfolio management. Advisors often pursue this designation to learn more about advanced wealth management strategies and how to best tailor their investment recommendations to the specific needs of each client. To be eligible for the designation, an advisor needs at least 2 years of recent experience in an investment management role.v
Elder Planning Counselor (EPC)
Advisors interested in helping older adults manage their finances can pursue the EPC designation, which requires completion of the Elder Planning Counselor Designation Program. The focus of this educational program is on providing advisors with a comprehensive understanding of the financial issues facing seniors, from housing costs to social security and estate planning matters.
Finding the right financial advisor for you
Depending on your financial needs, you may want to tailor your search to an advisor based on their qualifications – a young person looking to invest some money may seek out an advisor who holds the CIM designation, while a retiree interested in estate planning may seek out a CFP advisor who also holds the EPC designation.
Some advisors may not hold these particular designations, or they may have others not listed here. That doesn’t mean they’re unqualified to provide you with valuable financial advice. Advisors’ varied backgrounds and skills help them provide a unique perspective when helping you understand your finances. To learn more about the important steps you should take in selecting an advisor, check out our article on the subject.
*This designation is not valid in Quebec.
i“Standards and Enforcement,” Financial Planning Canada.
ii“FAQOpens a new website in a new window,” Institut québécois de planification financière.
iii“Certified Health Insurance Specialist (CHS) Designation,” Advocis.ca.
iv“Compare Our Programs,” CFA Institute.
v“Chartered Investment Manager (CIM) Designation,” Canadian Securities Institute.
The information provided is based on current laws, regulations and other rules applicable to Canadian residents. It is accurate to the best of our knowledge as of the date of publication. Rules and their interpretation may change, affecting the accuracy of the information. The information provided is general in nature, and should not be relied upon as a substitute for advice in any specific situation. For specific situations, advice should be obtained from the appropriate legal, accounting, tax or other professional advisors.