With the unemployment rate across most sectors still high (including finance), the number of job candidates with advanced degree in business is growing too. In many cases, It’s just not enough to help candidates stand out from the competition for finance and accounting jobs. One path that many practitioners take to enhance their candidacy is to earn professional certifications and designations.
The “letters after the name” send the message that the individual possesses certain knowledge and skills and in many cases promises to adhere to professional ethical standards.
Certifications are usually earned from the professional association for the specific field. Most require a combination of test performance, experience, continuing education and adherence to industry norms.
If you are the owner of a company that seeks to hire or consult someone (or several people) with financial or accounting skills and expertise, how do you decipher the alphabet of designations and certifications? What do they mean and who issues them?
Here is a primer on the top financial certifications and designations in alphabetical order. The links provide additional information on each certification and the issuing organization. For a comprehensive database of over 80 financial (but not accounting) credentials and designations,visit the database put together by the Financial Industry Regulatory Authority (FINRA).
- ASA - Accredited Senior Appraiser - Issued by the American Society of Appraisers, the oldest association of appraisal specialists. Areas of accreditation include appraisal of businesses, gems and jewelry, machinery, personal property and real property.
- ASA - Associate, Society of Actuaries - Issued by the Society of Actuaries, the leading organization for professionals in risk measurement and management.
- CQF - Certificate in Quantitative Finance - Issued by 7city Learning, a financial services training company. The 6-month program deals with derivatives and risk management.
- CFM - Certified Financial Manager - Issued by the Association for Accountants and Financial Professional in Business. This certification was discontinued in 2007, but nearly 5,000 people earned the certification prior to its discontinuation.
- CFP - Certified Financial Planner - Issued by the Certified Financial Planner Board of Standards. It is focused on personal financial planning expertise.
- CFS - Certified Fund Specialist - Issued by the Institute of Business and Finance, it is the oldest mutual fund designation in the country. Recipients are certified to evaluate and compare financial measurements and benchmarks when constructing a mutual fund portfolio.
- CIA - Certified Internal Auditor - Issued by the Institute of Internal Auditors. This is the only internationally-accepted certification for internal auditors.
- CIIA - Certified International Investment Analyst - Issued by the Association of Certified International Investment Analysts in Switzerland, an organization with over 60,000 portfolio managers, analysts, investment advisers, asset managers and fund managers as members.
- CIMA - Certified Investment Management Analyst - Issued by the Investment Management Consultants Association. Targets investment professionals who on average manage at least $125 million in investor assets.
- CMA - Certified Managerial Accountant - Issued by the Institute for Management Accountants which is the assocation for accountants and financial professionals in business. Tests for knowledge in financial planning, analysis, control, decision support and professional ethics.
- CPA - Certified Public Accountant - Issued by “Board of Accountancy” for the state where the CPA is licensed. A list of state board is here. The American Institute of CPAs (“AICPA”) has represented the CPA community since 1887 and offers more information.
- CPA-PFS - Certified Public Accountant - Personal Finance Specialist - Issued by the AICPA. It is for licensed CPAs with specific expertise in personal financial planning.
- CTP - Certified Treasury Manager - Issued by the Association of Financial Professionals. The focus is on cash management expertise including: optimizing cash resources, maintaining liquidity, ensuring access to financing and more.
- CTFA - Certified Trust and Financial Advisor - Issued by the American Bankers Association. It covers fiduciary and trust activities, financial planning, tax law and planning, investment management and ethics.
- CAIA - Chartered Alternative Investment Analyst - Issued by the Chartered Alternative Investment Analyst Association, the only global organization dedicated to alternative investment professionals. Alternative investments cover non-traditional asset classes. It includes hedge funds, private equity, venture capital and more.
- CFA - Chartered Financial Analyst - Issued by the CFA Institute. It is a broad-based curriculum that covers investment principles with professional conduct requirements. The examination requirements are based on industry standards of practice as opposed to just “textbook” learning.
- ChFC - Chartered Financial Consultant - Issued by the American College. A nine-course college level program that addresses financial planning for individuals and small businesses.
- CIC - Chartered Investment Counselor - Issued by the Investment Advisor Association to investment advisors. A pre-requisite for this designation is earning the CFA designation.
- FRM - Financial Risk Manager - Issued by the Global Association of Risk Professionals. Typically for individuals that aspire to positions such as Chief Risk Officer, Senior Risk Analyst, Head of Operational Risk or Director of Investment Risk Management.
- Some designations, such as the CFA, are broad in scope and recipients of the designation can address many areas of finance. Other designations, such as the CFS, have a very specific scope. It is essential to first determine what type of expertise and skill set your company needs and then deciding which designations are relevant in job applicants.
- While professional designations can provide hiring companies with additional peace of mind, they should not be taken as an automatic “stamp of approval.” In cases where you have equally qualified candidates, however, the one with the designation should receive the additional consideration.