Have you ever wondered about the alphabet soup of letters following a financial advisor’s name? There are more than 100 different financial advisor certifications and designations according to a Kiplinger.com article, 5 Key Credentials to Seek in a Financial Advisor.

Here are the top three (in no particular order):

Certified Financial Planner (CFP)

A Certified Financial Planner (CFP) is bound by rigorous requirements set by the Certified Financial Planner Board of Standards, Inc. (CFP Board). There are four parts to the initial CFP certification; education, examination, experience and ethics. A CFP candidate will need to put in up to 1,000 hours to complete the required coursework and the exam. The CFP applicant must have a minimum education level of a bachelor’s degree and coursework in financial planning. The ethics component requires the applicant to meet the Fitness Standards for Candidates and Registrants and promise to follow the Rules of Conduct which put the clients’ interests first.

According to the CFP Board, before being awarded the CFP designation the applicant must pass a comprehensive computerized one-day (six-hour) examination. Since the CFP must be able to work without supervision, they must have at least three years of professional financial planning experience before holding the title.

Chartered Financial Analyst (CFA)

The prestigious investing credential of Chartered Financial Analyst (CFA) is issued by the internationally recognized CFA Institute. The CFA is especially important in the areas of investment research and portfolio management. Similar to the CFP, there are rigorous educational, experience, and examination requirements for the CFA.

“To become a regular member of CFA Institute you will need to hold a bachelor's degree from an accredited institution or have equivalent education or work experience,” according to the CFAinstitute.org website. The CFA holder must also have 48 months of related professional work experience in an investment related field. The most challenging aspects of obtaining the CFA certification are the three required examinations. Each are six hours and must be taken over several years. The CFA examination tests topics from these disciplines: accounting, economics, ethics, finance and mathematics.

As with the CFP, the CFA must adhere to certain ethical guidelines as well. This designation is highly concentrated in the investing area and when working with a CFA, it’s likely you will receive a high level of investment counsel.

Personal Financial Specialist (PFS)

The Personal Financial Specialist (PFS) is credentialed by the highly regarded American Institute of Certified Public Accountants (AICPA). This professional is a Certified Public Accountant (CPA) with additional expertise in all aspects of financial and wealth management.

The PFS studies estate planning, retirement planning, investing, insurance and additional areas of personal financial planning. This designation also requires three years of work experience, rigorous continuing professional education, and high ethical standards. Similar to the prior high level certifications, the PFS must pass an exam.

The Bottom Line

Financial advisor credentials matter. Ask the advisor what was required to obtain a particular certification. Realize that the top financial advisor credentials require rigorous study, experience and high ethical standards.