Today I thought it might be interesting to share with you some lingo about the financial profession. Some of you may already know that my professional background is in financial planning.

Yes, I like to write, blog, and journal aimlessly on occasion, but in the “real world” I make my bones like most people. Basically, I work, shuffle paper, smile, shake hands with strangers, and generally share what I know about navigating the needlessly overwhelming red tape of the world of money. And believe me, that’s a pretty vast world of which there are a hundred-and-one different specialized sub-fields.

I have a master’s degree in financial planning, but I’m always surprised when most people assume that I’m somehow a “finance guy.” To be honest, I don’t even know what that means. However, I assume that most people just figure that anything related to working with money automatically translates to pop culture fantasies about working on Wall Street. That’s just passé. Of course I own stocks, but that’s not at all what I “do” for a living. I think doing something like that would absolutely bore me to tears.

The good news is that for peeps interested in a career in finance, you will no doubt find endless possibilities. To begin, I should point out that the two most coveted professional designations in the financial world are the CFA and the CFP. I’ll leave the CPA out of this very brief overview for now because the CPA isn’t really a finance related professional designation, although it’s certainly distinguished in its own subfield. Instead, the two acronyms you’ll run into the most in the world of finance are the Chartered Financial Analyst (CFA) and the Certified Financial Planner (CFP). If I had to describe each in the most overly simplistic terms, I would broadly characterize the CFA as a specialist designation, while the CFP is more of a generalist certification.

One of my old professors once called the academic exercise of studying for these designations like this. “The CFA is like looking at the ocean of all there is to know about money and studying an inch wide and a mile deep, but a CFP is like studying a mile wide but only going an inch deep.” Thankfully, considering the rapid pace that everything changes in the world of other people’s money, an inch deep is all you really need to be versatile. Oddly enough, my old prof. also said that a good CFP thinks like a quarterback for his clients, while a CFA is like being a place kicker. However, I honestly don’t want to offend anyone here because I think the last analogy can so easily become misinterpreted. The truth is that both designations have rigorous training programs and the failure rate of sitting for either exam is extremely high. So let’s just say that the CFA and the CFP are two most coveted financial courses of study for anyone thinking about advancing their career in the industry. Just one more quick note about acronyms. In the financial world, neither the CFA nor the CFP are equivalent to the MBA. Actually there simply isn’t any professional certification board that oversees bestowing the MBA. The MBA is a business administration degree that does not necessitate becoming certified in any particular specialty. In an nutshell, the MBA is administered by an educational institution, while the CFA and the CFP are trademarked designations overseen by a professional board of standards that certifies the certificate or charter holder’s competency in the administered course content.

Okay, that’s all for now. I’ll be back tomorrow to share more. Peace. 🙂