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CFA® and CFP®: The Acronyms of TAM* - Part 2 *Townsend Asset ManagementSubmitted by Townsend Asset Management Corp. on September 28th, 2015
Previously, we deciphered the first set of acronyms/initials following Gerald’s name and found out what it takes to become a CPA. Let’s now look at the next 2 sets of acronyms that come after - CFA® andCFP®. Both are important when evaluating the credentials of your financial advisor.
A Chartered Financial Analyst®(CFA®) has been described as being equivalent to someone holding a master’s degree in finance and also minoring in accounting, economics, statistical analysis and portfolio management. To start you need a bachelor’s degree. Then the successful candidate must pass 3 six-hour exams which become increasingly difficult at each level while also accumulating 4 years of financial work experience. The CFA Institute reports that in June 2015 exam-takers averaged 308 hours studying for one exam – that’s 2 months of full-time work! You can find CFA®s working in areas of finance as Portfolio Managers, Research Analysts, and Corporate Finance Officers.
So how does a CERTIFIED FINANCIAL PLANNERTM CFP®) differ from a CFA®? To become a CFP®, you focus on a myriad of practical subjects with the aim of creating and executing comprehensive financial plans for individual investors as well as small business owners. The topics include investment, insurance, retirement, taxation and estate planning. A CFP® is required to have a bachelor’s degree, 3 years of financial planning experience, coursework, and successfully passed a 10-hour exam.
As a CFA® Gerald is trained to analyze stocks, bonds, mutual funds and other investment instruments, while as a CFP® he has a widespread knowledge of all aspects of a client’s financial life. At Townsend Asset Management Corp., Jim Kniffen, Caleb Griffith and Leon Abbas are also CFP®s.
Stay tuned for Part 3 when we’ll delve into the role of a Chartered Market Technician (CMT).
Bonnie Mole is Client Service and Communications Manager at Townsend Asset Management Corp. Email: Bonnie@AssetMgr.com