CFP and CFA – Why Not Both?

In the past several years, there has been a vast increase in advertisements regarding the CFP® and CFA® certifications. There is much confusion concerning the benefits and or differences between these certifications.

(PRWEB) July 8, 2006 -- In the past several years, there has been a vast increase in advertisements regarding the CFP® and CFA® certifications. There is much confusion concerning the benefits and or differences between these certifications. Professionals who have just completed an examination in one of these programs, may be asking “Why would I ever need more?” Before answering the question, let’s briefly compare the two programs:

The CFA® Program and its body of knowledge focus on company analysis, individual security valuation, and portfolio management from an institutional perspective. Asset allocation and security selection analysis are not concerned with income tax issues since institutional investors are generally non-taxable. Taxable investor portfolio management is now addressed in some portions of the final year of study. On the other hand, the CFP® Program focuses on individual and family financial planning with respect to insurance and risk management, employee benefits, retirement and estate planning, income tax, and investments. Investment analysis, an integral part of the CFA® Program, is only one segment of the CFP® Program.

Back to the question – why both? The answer is demographics. Baby boomers are marching towards retirement with not only increasing amounts of financial wealth and prospects of significant inheritances, but with an ever-expanding set of investment opportunities and products. Knowledge gained in the CFP® Program leads to expertise in generational, holistic planning for wealth accumulation, tax minimization, and employment and retirement benefit provision while expertise in the areas covered by the CFA® Program brings to the table detailed knowledge of investment alternatives, diversification possibilities, and portfolio return and risk management. In addition, given that individuals and households are more likely than ever to have exposure to international markets (and even foreign family members!), the global scope of the CFA® Program includes knowledge of international investments and markets, and global portfolio diversification.

Individuals equipped with both sets of knowledge are in an enviable position in the growing wealth planning and management market. Private wealth management boutiques, single and multiple family offices, trust companies, and small independent financial advisory firms have already discovered the benefits of employing individuals who realize that portfolios include financial assets, real assets, and human capital assets, and are able to efficiently and profitably integrate and manage these across the planning spectrum of wealth accumulation, retirement, and estate distribution. Increasingly, private client divisions of large financial services firms, brokerages, and banking institutions are beginning to comprehend the benefits of the complementary knowledge and skill sets that this double designation represents. CFP®, CFA® – is it for everyone?

An important note to those considering the CFP® certification, but have not completed a bachelors degree: As of January, 2007 the CFP Board will require all applicants to hold a bachelors degree from an accredited university. If the course work has been completed, an individual still has time to apply and complete the certification examination in November of this year. Those considering a CFA®, are not required at this time to hold a bachelors degree, but they are required to have three years of specific work experience and meet other required criteria.

If you need study materials to help you prepare for the CFP® or CFA® exams, please go to Keir Educational Resource’s website at www.keirsuccess.com or call Keir toll free at 800-795-5347.

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