The credentials that financial advisors tack on after their names aren’t just spillage from alphabet soup. They’re important marketing and messaging signals for advisors. Turns out they’re also keys that unlock a treasure chest of pay hikes.
Earning certain professional certificates and designations is worth an 18% boost in income on average the following year, according to the College for Financial Planning’s (CFFP) latest Survey of Trends.
And next to helping your clients, building your practice is one of your key goals as an advisor, like attending major industry conferences to learn what investment strategies are hot, how to cope with regulatory red tape, and how to reach out to prospective clients.
Buffing your skills can also help you attract clients you value the most, like high-income corporate executives.
The CFFP survey found that after receiving any of nine credentials, average starting income rose to $133,524. That was up 18% from $113,524 the year before.
Income hikes ranged from $2,672 for newly minted Registered Paraplanner recipients, whose pay went to $41,921 on average, to nearly $96,000 for advisors who earned their Accredited Portfolio Management Advisor (APMA) designation. Their income in the year after they received their credential rose to $271,458 on average.
The widely used Certified Financial Planner (CFP) certification is good for a nearly $19,000 boost in income to an average of $123,635.
Advisors who were surveyed reported an average income of $161,133 for 2015. That was 42% better than the respondents’ collective starting incomes, in whatever years those occurred.
There are more than 65,000 active CFP advisors, according to the CFFP. The CFP is issued by the Certified Financial Planner Board of Standards.
The APMA debuted in 2010. It educates advisors in the finer points of portfolio creation, augmentation and maintenance. There are about 1,000 APMA graduates.
The College for Financial Planning offers paid instruction for all nine of the credentials included in the survey, and it issues all but the CFP.
For advisors who want to specialize in mutual funds and master their use as investments, the CFFP offers the Chartered Mutual Fund Counselor (CMFC) designation, which was created in partnership with the Investment Company Institute.
The latest CFFP Trends survey also reported facts and figures about advisors. Members of the professional tend to be well educated, with 89% holding at least a bachelor’s degree and 34% having earned a master’s degree or better.
Survey respondents were 71% male and 29% female. That ratio was reflected in most of the individual credentials, except for Registered Paraplanner (RP) designation, which is 81% female. A paraplanner is a junior member of a financial planning.
Also, the typical client is a two-income couple. The typical advisor manages more than $60 million for clients.
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