Alphabet soup

You thought that the world of financial planning and investment management was complex enough on its own, but now you've noticed the alphabet soup following the names of financial professionals and you're more confused than ever. What do all the letters mean and why should you care?

There are dozens of professional designations for financial professionals, but here are some of the most common ones and an explanation of what they should mean to you.

Certified Financial Planner (CFP)
Obtaining this designation is no easy task but it's quickly becoming the standard for top-notch financial advisors. Candidates complete a rigorous curriculum, pass a difficult comprehensive exam, complete 30 hours of continuing education every two years and must adhere to a strict code of ethics. If your financial advisor is not a CFP, ask him/her why not.

Certified Investment Management Analyst (CIMA)
This designation, bestowed by the Investment Management Consultants Association, requires coursework and a final exam plus three years experience in investment consulting.

Certified Public Accountant (CPA)
A CPA must hold an accounting degree and pass a four-part exam--no simple task. CPAs frequently offer other financial services or sell investments but their specialty is tax issues.

Chartered Financial Consultant (ChFC)
Like CFPs, ChFCs have broad knowledge in financial planning, estate planning, taxes and investment management. They tend to come from the insurance industry.

Chartered Financial Analyst (CFA)
Probably the most difficult designation to obtain, the CFA charterholder has passed three arduous exams over a three year period and is bound by a code of ethics. This is the desired designation for portfolio managers, mutual fund managers and stock analysts.

Chartered Life Underwriter (CLU)
The CLU designee has completed a ten course curriculum on life insurance products.

Certified Fund Specialist (CFS)
This designation, which focuses on mutual fund investing, is awarded through the Institute of Business and Finance to professionals who complete their course and comprehensive exam.

Registered Investment Advisor (RIA)
The is really not any kind of certification at all, but an investment manager who manages $25 million or more in clients' assets, must be registered with the Securities Exchange Commission and is referred to as an RIA.

While these credentials are not everything, they are indicative of a professional's dedication and desire to do his/her very best for clients. When evaluating financial professionals pay attention to other factors as well such as experience, investment style, areas of expertise or specialties and, of course, how he or she gets paid.