What designations are important for a financial advisor? Anyone can hang out a shingle as a financial advisor and pack on an alphabet soup of letters after their names, but some designations require a lot more knowledge and experience to obtain than others. The Financial Industry Regulatory Authority (FINRA) lists 214 different professional designations and 10 accredited designations.

So, how do you know which ones really matter for an advisor? A 2019 article from Forbes suggested that there are three designations that stand above the rest: CFP, CPA, and CFA.

Let’s dive into the requirements for these credentials. The CFP requires you to have at least a bachelor’s degree, complete the CFP education program, and then pass the CFP Board Exam. Recently, the pass rate was only 62% for this rigorous exam. Finally, you also need 6,000 hours of professional experience or 4,000 hours of apprenticeship experience to earn the CFP designation.

The requirements for the CPA are 150 semester hours of relevant coursework, then passing the Uniform CPA Exam. The pass rate for each section of the CPA exam averaged between 46.37% and 61.76%. Finally, you need to achieve 2,000 hours of qualified experience before you can use the CPA designation.

The requirements for the CFA are a bachelor’s degree or 4 years of work experience. You then need to pass three sections of the CFA exams with a pass rate of just 41%–56%. Finally, you will need to submit multiple reference letters and apply to become a charterholder.

Now that we have gone over how rigorous the requirements are for the CFP, CPA, and CFA, let’s compare them to some designations that sound similar but are not nearly as prestigious as the three we just went over.

Let’s compare the CFP side-by-side with the requirements for a CPFA (Certified Plan Fiduciary Advisor). The CPFA does not require any undergraduate education and only requires an individual to complete online modules. No experience is required. The exam is only 70 questions over three hours, there are no ethics requirements, and the continuing education requirement is minimal.

Now let’s compare the CPA with the requirements for the RAP (Registered Accounting Professional). The RAP has no education, experience, exam, ethics, or continuing education requirements. The candidate only needs to self-attest to have any license or credential in accounting or that they simply work in accounting.

Lastly, let’s look at the requirements of the CFA compared to the CPS (Certified Portfolio Specialist). The CFA requires 900 hours of studying, and the CPS only requires about 40 hours of studying. The CPS only has one exam, taking approximately one hour, whereas the CFA has three levels of exams taking approximately six hours each.

As you can see, not all designations carry the same weight. Some take a weekend to achieve, and others half a decade or more to achieve. It is imperative to do your research before selecting a financial advisor based on designations.