Professional Initials

By: Charles Thomas

Many students who graduate with majors in finance dream of one day have huge salaries and many extra initials after their name. However, simply doing a little background research on what obtaining those initials may require is enough to deter the grand majority of the financial professional-hopeful population. Two of the most well known professional certifications are the CFA (Chartered Financial Analyst) and the CFP (Certified Financial Planner), and most people are largely unaware of how hard it can be to get just three little letters.

Obtaining either an Analyst or a Planner certification both entail a grueling, demanding process. The requirements for obtaining a CFA title seem simple at first; all you need is an undergraduate degree, 3 years of relevant work experience, and to pass the certification exam. Well, actually exams, because there are three of them. Each of these exams are extremely difficult, having only around a 50% rate of success, they are each 6-hours long and require on average a minimum of 250 hours of study each. It takes on average about 4 years to complete the program, so at least you know that your 3 year experience requirement will be met if you are working in the industry at the same time. To sum up the CFA, that over 750 study hours, 4 years, 18 hours of testing, and only about a 50% chance of passing each exam.

The CFP certification is slightly different, but just as difficult and draining as the CFA, if not worse. Th requirements for the certification again, seem simple: undergraduate degree, 3 years experience, passing the exam, and in addition, the CFP must also complete six specific courses concerning personal financial planning. The exam it self is 10-hours long, and covers just about any and everything concerned with personal finance. This exam generally requires around 1000 hours of study time and still only has a passing rate of 50%.

While each exam is tailored to a specific area of financial professionalism, they still cover incredibly broad and complex areas of finance as well a specific codes of ethics for each individual certification. Furthermore, a generous amount of time should be devoted to studying the exams themselves, that is, the make up of questions, percentages of the exams devoted to each topic, and how the tests are scored.

Those are just two of the terribly difficult professional titles that could be pursued. One might also choose from a Certified Public Accountant (CPA), a Certified Fund Specialist (CFS), a Certified Investment Management Analyst (CIMA), or a laundry list of other potential initials. What makes this decision even worse, is that many of these professional titles do not necessarily command massive salaries and may not have a great market demand. So, my suggestion is if you want to be a professional, do the simple homework of deciding which path is best for you before having to all that other, much more difficult homework.