I recently left my job as an equity analyst after almost a decade on the job to take a new opportunity as a PM in the PWM arena so my wife and I could be closer to family. I’ve realized that the CFA is highly regarded yet not as applicable to my day to day job as it was as an analyst. The CFA sets me apart from the others I work with. I’ve thought about getting the CFP, and I know this sounds terrible, but I’m wondering if earning the CFP would look as though it dilutes my CFA. Coming from my background and co-misreading with others on this forum and others in the CFA Program, I’ve always sort of looked down on the rigor of the CFP and its worth in the financial services arena. However, everyone recognizes it. I dont know of anyone who got the CFA then went to get the CFP, but I know it’s common the other way around. Any thoughts here?
^ this is the general feedback you’re going to get from the rest of the forum, as you would expect.
However, I would look at it in terms of “value-add” to your clients. Do you believe the CFP would make you better at your PWM job? Is it worth the time investment to go through the whole curriculum or would it be more beneficial to just read the content that is unique to the CFP (estates, tax, financial planning etc.)?
I think this whole idea of looking down at other designations is childish, the CFP and CFA can definitely co-exist without the dilution of the latter.
In any case, the CFP would serve you well in PWM. Level 3 of the CFA suits you well for the asset allocation portion of the job, but that is only the tip of the iceberg. Many seeking wealth management have other needs than just investment advice; think tax implications, estate planning, asset transfers, gifting, and so forth. The CFP addresses these items strengthening the value you can add to not only your firm, but your clients as well. The average Joe Plumber, LLC doesn’t know what a CFA is, most have heard of the CFP though. It sounds likea good move for you, I would imagine the demands of a position like this will afford you more time with your family which is a great way to live your life.
Aside from that, learn to play golf. There will be plenty of client prospecting, networking, hole sponsorship, on the golf course. If you can get down to a single digit or low double digit handicap, you’ll be the ringer to win business. Those who can’t break a 100 will be stuck in the office on those nice days.
CFP has more stuff about estate planning, insurance, trusts, tax planning, etc… It’s useful if you are doing retail, even HNW retail.
Also the CFP people, for reasons unfathonable to many here at AF, tend to think of CFA types as snooty, when in fact they are simply overeducated for what much wealth management requires and undereducated in some key areas like tax planning. So if you are going into places with lots of CFPs, you may not want to lord your CFA credential over them like an Aztec Priest about to feed the sun-god (I’m not saying you do, I just like the image of that last sentence).
So, you may want to have a separate resume for CFA type jobs and CFP type jobs. In the latter, de-emphasize the CFA (perhaps by not putting it after your name, but leaving it in the credentials section).
Honestly, since you already have your CFA you don’t have to take any of the (usually mandatory) classes. All you have to do is sit for the exam. You will have to study up on some of the other areas: taxes, estate planning, etc.
With your new gig, I would image there might be times where a CFP designation might be a useful thing to show, other times not so much. If it doesn’t take that much effort to get it, I would say go for it. Keep a set of business cards that say CFA, a set that say CFP, and a set that has both on it. Then you have all your bases covered.
I second what CvM and BChad and Kan and Greyhound say.
There are a lot of things that you can learn from CFP that you can’t learn from CFA. (EG–and this is CRUCIAL for anybody working with people–the difference between Roth and Traditional IRA, the age you can take withdrawals penalty-free, mandatory distributions, age limits, income limits, taxation–especially when you have a Traditional with a basis, maximum contributions, etc.) Then you have 401k’s, 457 plans, solo 401k’s, SEP IRA’s, SIMPLE IRA’s, SARSEP’s, and Keough plans. These are just the different retirement vehicles–haven’t even discussed the investments inside of them. Certainly haven’t discussed any of the other five parts of financial planning.
The CFA doesn’t cover these, which will be very important to your HNW people–especially if they have their own businesses. Sure, you could learn it pretty easily, but without some initials after your name, there’s nothing to PROVE that you’ve learned it.
I think anybody who plans to work in retail would do well to get the CFP. And I don’t think it would dilute the value of the CFA. It should compliment it, if anything.
If you’re going to be a PM for a PWN shop you really dont need the CFP desigination, if you’re going to be an advisor you may want to consider it. I’m sure you’ll fill in the knowedge gaps about financial planning on the job, and I dont think the designation will add any career value since you have the CFA designation.
At least wait a year to make a decision, I think you’ll see that its probably not worth it given your background. As a financial planner you really aren’t going to be doing any estate planning or advance tax work- that’ll all be outsourced. You’re really just going to make sure they’re on pace to withdrawal 4-5% when the retire, have insurance or an annuity if they want to hedge their life expectancy. In your roll you purely be trading clients assets, rebalancing, research and analysis stuff… you shouldnt be on the phone with clients discussing ILITs or CRUTs.
One benefit is that that I believe you can sit for the CFP exam w/o taking any classes because of you charter.
Source- I have the same job you’re starting and would never pursue the CFP designation
Ignore the naysayers. The two designations are complimentary, especially if you are working with (or managing portfolios for) HNW investors. If you have regular contact with individual clients the CFP will be useful. The CFP is a widely recognized designation which is respected by clients (and better known to investors than the the much more difficult CFA). It will only help your career as it shows you have a client focus.
You did not mention the size of the firm where you work? Certainly in the larger firms holding both designations is encouraged for those who have regular client contact, just as those firms are encouraging those who hold the CFP to pursue the CFA. The idea behind this is that HNW clients have complex, interconnected wealth management needs that require comprehensive financial advice.
Don’t expect to pass the two-day exam without some preparation and practice exams, especially if you are coming from the analyst side. You can sit for the CFP without taking the interim courses/exams but you’ll need some preparatory reading or a review course. It’s interesting material, because it will apply to your everyday financial life as well as helping you to understand your clients better. It’s not particularly difficult.
They actually changed the requirements last year for CFA charterholders, CPAs, JDs, wishing to challenge out of the pre-educational requirements. Now CFA charterholders, CPAs, JDs have to take the capstone of the pre-education requirement, which encompasses Insurance, Investments, Tax Planning, Retirement planning, and Estate Planning. In my opinion, the CFP is a complete racquet and a waste of money and time for people with the CFA, CPA or JD. The pre-education requirement alone costs like $4,500 and for those taking the capstone it costs like $600. I was pursuing the CFP, but have decided to stop because the curriculum was so weak. I think you’d honestly be better off studying up on these topics through your own continuing education with better resources than what is used for the CFP exam. The CFP is an inch deep and an inch wide on each topic and basically provides you with nothing more definitions and basic calculations. People should really consult CPAs for tax issues and Lawyers for estate planning.
I work alongside some CFP’s and they all view the test as inferior to the CFA designation. they also don’t see why someone would feel the need to get the CFP after obtaining the CFA. From what I gather, most of the CFP curriculum can be learned on the job, but it is a good way to quickly learn the information in a formal setting.