High net worth investors prefer to work with an advisor who has the Certified Financial Planner designation or other professional mark. Learn more.
High net worth investors, those with investable assets of $5 million to $25 million, strongly prefer to work with an advisor who is a certified financial planner, chartered financial analyst or other licensed professional, according to a new Millionaire Corner study on the relationships between affluent investors and their financial advisors.
The high net worth prize trustworthiness more than any other quality in a financial advisor and they appear to have a great deal of confidence in the certified financial planner mark and other professional designations,” Catherine McBreen, president of Millionaire Corner, said. “We were a little surprised to see that the youngest investors are the most likely to care about an advisor’s credentials.
Two-thirds of high net worth investors surveyed over the third quarter indicated, “It is very important to me that my advisor has professional registrations and licenses such as CFP (certified financial planner) or CFA (chartered financial analyst).” More than 80 percent of the youngest high net worth, those ages 44 and younger, agreed with the statement.
The certified financial planner designation is awarded by the Certified Financial Planner Board of Standards to experienced financial professionals who have taken additional courses, passed a comprehensive exam and submitted to an extensive background check. A certified financial planner must also adhere to a strict code of ethics and bears a fiduciary duty to clients. To maintain the certification, a planner must complete continuing education requirements and renew the license every two years.
A chartered financial analyst designation is awarded to individuals who have at least four years of investment experience, and who complete a three-tiered course, according to the CFA Institute which administers the program. Each tier requires 300 hours of study in preparation for a six-hour exam. Professionals must also pledge to the CFA code of ethics each year, and must join a local CFA member society.
In addition to the certified financial planner and chartered financial analyst designations, other common credentials include Chartered Financial Consultant, Certified Public Accountant and Chartered Life Underwriter, according to the Financial Planning Association.