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I was awarded the right to use the Chartered Financial Analyst (CFA) designation in 2006. I am now awaiting similar news from the CFP Board regarding the CERTIFIED FINANCIAL PLANNER™ (CFP®) certification. I completed the education requirement, passed the test, and submitted my work experience and ethics pledge. Once the program administrators email my old boss and look me up on IAPD, I expect to pass inspection and be awarded the use of the CFP® marks.
Why the heck did I do both? Am I just collecting letters after my name to look fancy? Did I need an excuse to ignore my family and stay indoors in the beautiful weather? Perhaps I want all the financial calculator manuals. (Okay that last one, maybe.) But the real answer is, I enjoyed learning the material and wanted to increase my competence in the relevant fields.
What’s the difference?
The two programs are very different. Both are extremely valuable for improving and demonstrating competence in their respective fields, which overlap a bit. The Chartered Financial Analyst program involves a series of three tests covering material specific to investing and financial analysis, such as accounting, statistics, portfolio management, economics, and ethics. It is graduate-level work – much of it included material I studied while earning an MA in economics with a business and finance concentration. (That totally gave me a head start on the stats and econ portions!) The CERTIFIED FINANCIAL PLANNER(TM) certification is designed for financial planners, rather than investment specialists. (Well-named, both of them, eh?) It covers topics including but not limited to investments, taxes, retirement planning, estate planning, and ethics. It is also graduate-level work, and I did little of it in my master’s program; much was new to me.
When I started looking into CFP® certification, a surprising number of colleagues said something to the effect, “Oh well you passed the CFA exams, so that will be easy for you.” And foolishly, I believed them. Hello, hubris, my old friend! I got it in my head that I could just whip this out in six months and get on with my life. No such luck. This was *theoretically* possible. Because of previously earning the CFA designation, I was permitted to bypass most of the educational component of the CFP® certification, complete a capstone course or project, and then sit for the exam. I looked up what would be on the exam. Here was the first hint that my expectations were absurd. I was confident in the investment topics.
But the other 83% of the exam material? Nope.
CFP® certification education
I signed up for the College for Financial Planning’s education remote learning-based program. I’ll just whip through these courses one per month, right? Wrong. To be fair, the investment course I whizzed through, so apparently some of my studies for the CFA exams stuck in my parenthood-addled brain. Also, I can use both the HP 12c financial calculator, which uses “reverse Polish” notation, and the HP bII+, which uses “infix notation,” which I learned is the name for what most (Western?) students are taught in school. In case my nerd cred was in doubt, that should convince you.
This is a lot of material. I am a mathy person and parts of the CFA program curriculum that intimidate some folks were much more approachable for me, but law makes no sense in my brain. Taxes, estate planning, and accounting are not intuitive at all, and learning about them by reading was also difficult for me. (There was a lot of me saying “wait, what?” and backing up the recorded lectures with my eyebrows all crunched together.) The stuff that was easiest to learn were the areas I had already applied to working with actual clients, and that was very exciting. Learning something I get to use in real time is totally my jam, which made both programs more enjoyable for me.
Do you just like taking tests?
But the CFA program has three tests and the CFP® certification just has one, so that’s easier, right? No. To be fair, I spent fewer total hours sitting in testing centers for the CFP® certification program. But both programs have very challenging exams. In the educational component of the CFP® certification, I took finals on each subject before moving onto the next one. The CFA exams each test all of the component subjects, but get progressively more difficult. (The Level II exam is famously hard to pass – I came out of that exam feeling like someone had replaced my brain with pudding.)
Not easier or harder, not better or worse, just different.
One reason that a dear friend and colleague asserted as to why I would probably pass the CFP® exam is that I was good at taking tests. This is a reasonable assertion – the master’s degree and the CFA program gave me a lot of practice. I am also well-constructed for taking exams – my brain loves puzzles and latches onto them like a kid in the grocery store candy aisle. But that doesn’t mean any of these exams were easy. It also doesn’t mean I’m a better investment analyst or financial planner than someone who struggles to pass exams. Anyone who has earned the CFA designation or the CFP® certification has demonstrated a level of competency in applying a broad curriculum of subject matter and a commitment to ethical practice in their field. This is much more important in hiring an advisor than whether they are good at taking tests.
Ethics
The professional conduct and regulation portion of these programs, which I vaguely refer to as “ethics,” is not just “don’t be a crook.” (I mean, please don’t. But there’s more.) There are regulations specific to each role, ethical guidelines about conflicts of interest and professional conduct, and both programs want to be sure you are going to use their designations correctly. (I can just imagine my intellectual property lawyer friend rubbing her hands together…) Even an “ethical to the point of annoying” person like me needs to review that material carefully.
Context matters
Lastly and most relevant is when I did each program relative to my own life. Here’s a quick comparison:
Suzanne
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CFA Program
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CFP® Certification
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Age
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Completed at age 32
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Pending completion at age 47
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Job
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Investment Advisor
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Financial Advisor and Investment Specialist
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How long did it take me?
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Three years
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Three years
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How long is it supposed to take?
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At least four years (the experience requirement increased from three years to four after I started)
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Depends how you go about it, but I think at least a year, probably more like 18 months, plus 6000 hours of relevant experience or an apprenticeship
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What previous relevant education did I have?
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A master’s degree in economics with a business and finance concentration, including advanced statistics
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A lot of web searches and a tendency to read insurance policies more thoroughly than normal people do
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Immediate family
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One husband, two cats
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One ex-husband, one fiancé, two kids, one stepdaughter, three rabbits, and a chihuahua
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Living situation
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Same apartment through the whole thing
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Renting second home since selling the one I lived in at the beginning program, looking for third to purchase
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Was there a global pandemic?
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No
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Yes
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How long has it been since I was accustomed to studying for exams?
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Right after graduate school
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Started studying 12 years and two babies after completing the CFA exams
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Thus, at risk of upsetting possibly everyone reading this: They are both very challenging and rewarding programs, and for me, in the context of my life circumstances, prior education, and particular intellectual talents, the CFP® certification was harder. But that does not mean the same would be true for the next person. Also, if you had a carbon copy of me and had her attempt the CFP® certification in 2003-2006 and the CFA program in 2018-2021, she might not feel the same way. (Also send her over here, I could use help wrangling the kids.)
How does this apply to you?
Any advice? Yes. If you are considering either of these programs, or trying to choose between them, please read the description of the curriculum on their respective websites. Does it look interesting? Do you want to know those things? Is that the sort of stuff that you go look up and say “oh, interesting!” when you find the answer? Because if not, please don’t do it. This is a lot of your life to spend on something you “need for work” or that looks impressive to you but isn’t your passion.
I knew I was on the right track when I found the CFA Level III exam fun, like a (really, really hard) jigsaw puzzle; and again in the CFP® certification coursework, when I realized one Saturday night at 10 PM, lying on my couch, eating peanut butter M&Ms and climbing down an internet hole of different types of dividend treatment in permanent-life insurance loan programs, that I was happy as a clam. I come from a long line of hard-core geeks. That made both programs well-suited to me.
If your job wants you to complete one of these programs – do you like your job? Do you find the reading in your job interesting or tedious? Are you excited to do at least a large portion of the things your job requires? If not, getting what amounts to a graduate degree in said field is not as helpful to your wellbeing as figuring out what you might like better. It’s very, very hard to excel in a field you don’t like. Yes, some people do. But they usually regret it.
Suzanne Highet is a financial advisor and investment specialist at Cultivating Wealth. Suzanne loves the intersection of finance and psychology found in financial advising. She hopes to empower her clients to experience financial clarity and peace of mind. After spending 15 years in the investment industry and feeling full service financial advising tugging at her sleeve, she made the switch in 2018 and has been having a blast.