CPA, Financial Planners, Financial Advisors, etc.
What do they mean?

Q. No offense but I see dozens of ads from CPAs, financial planners, financial advisors, certified planners and so on. It is hard to tell who the real professionals are with the proper credentials.

In medicine I know that I want an MD. What is the equivalent in the financial world? What are all those other credentials?

With so many new "designations" out there, this has become a real problem for consumers. But, thanks to the internet, it is much easier to determine the minimum qualifications behind each credential.

Just as different doctors may specialize in different areas of medicine, financial professionals generally also tend to specialize.

Here is a summary of some of the more common designations:

Certified Public Accountant (CPA)

- Have stringent education, testing, experience and continuing education in areas such as accounting, auditing and taxation.

Certified Financial Planner™ (CFP®)

- Have education, examination, experience and continuing education requirements specifically directed toward personal financial planning.

Personal Financial Specialist (PFS)

- This is a relatively new designation available only to CPAs that specialize in personal financial planning. This specialization is supported by experience, testing and continuing education.

Chartered Financial Analyst® (CFA®)

- are securities analysts, money managers and investment advisers who focus predominately on the analysis of investments. Individuals meet certain experience, education, examination and ethics requirements.

As the consumer, you need to determine what type of professional will best meet your needs.

Are you in need of a tax professional, an investment advisor, or someone to handle all of your financial planning needs? This requires interviewing prospective professionals. The designations only provide a starting point.

Even with one of the above designations, individuals may concentrate in one area and have little experience in other areas. A CPA specializing in audits of Fortune 500 companies may not be of much help with your tax or investment questions.