This is a roll call for all the people who do financial planning strictly for HNW individuals. Let’s say your clients are individuals who have 500k to 5M of investable assets. I have heard some of the other financial planners poo-poo the CFA credential because “it’s too academic”. Personally, I think it’s a bunch of sour grapes.
I would like to hear from other CFPs/CFAs how the CFA has assisted them in investment selection, portfolio management etc with individual clients , and which sections were less useful (maybe because they were too academic). How has the CFA paid off?
Speaking as someone who has the CFP designation, the CFA curriculum has brought me far more value for my clients than the CFP. As long as you’re dealing with clients who spend responsibly in relation to their portfolio size, there is overall very little use for the CFP in my opinion.
The CFA is good for the portfolio construction side and thinking about risk tolerance and investment policy statements. However, the tax, trust, and insurance issues covered by the CFP are not part of the CFA curriculum and are highly relevant to personal finance. So CFP’s who want to poo-hoo the CFA will concentrate on those issues.
The CFA is a harder exam to pass though. There’s no reason that one can’t learn the tax, trust, and insurance issues if you put even a fraction of the effort into learning them.
Typically, retail or HNW financial advisors will not be picking individual stocks, however, so a fair amount of the CFA curriculum will go unusued in those roles.
I have been a CFP for 15 years and a CFA Charterholder for about five months. It’s too ealry to know exactly how much doing the CFA Program will pay off, and to be honest the last thing I wanted to do for the first six months after the Level 3 exam last June was to go back to the CFA curriculum and pull out the good bits.
There is however lots of great material from all three levels, but Level three is probably the best for what I do in terms of dealing with clients and making portfolio decisions.
The CFP study, from what I remember, tells you very little about real investment management, and was way easier.
Add to this the fact that there are over 5,500 CFP’s in Australia and less than 50 of those are CFA Charterholders, and it helps me stand out from the crowd…once I explain to people that CFA doesn’t stand for Country Fire Authority.