Are you considering a professional career in finance? If so, you must get educated and pursue a financial designation in Canada.
There are a number of financial designations in Canada. These designations label the individual as a competent professional in their field of study. Some of the most common financial designations in Canada include CPAs, CFAs, and CFPs.
The finance career field is projected to see moderate growth over the next few years, according to the federal Job Bank. Not sure which financial designation you want to pursue yet?
Keep on reading for a complete breakdown of the similarities and differences between Canada’s financial designations.
Financial designations are three-letter acronyms that define a financial professional’s area of expertise and study. Some particularly ambitious individuals pursue multiple financial designations to broaden their knowledge and open themselves to more career opportunities.
Financial designations are similar to those given to a medical professional, such as an RN (Registered Nurse) or MD (Doctor of Medicine).
The most common financial designations in Canada are:
|Financial Designation||What It Stands For||What They Do|
|CFA||Chartered Financial Analyst||Manage investments and perform in-depth financial analysis|
|CFP||Certified Financial Planner||Counsel individuals in retirement planning, tax preparation, insurance, and investments|
|CIM||Chartered Investment Manager||Specialize in investment portfolios and wealth management|
|CPA||Chartered Professional Accountant||Professionals in tax reporting, accounting, and auditing|
|PFP||Personal Financial Planner||Experts on personal finance, with a focus on government programs and regulations|
|RFP||Registered Financial Planner||Advanced financial planners with in-depth knowledge of personal finance and financial planning|
|TEP||Trust and Estate Practitioner||Experts in estate planning and trust administration|
|CLU||Chartered Life Underwriter||Professionals who focus on life insurance and estate planning|
|CHS||Certified Health Insurance Specialist||Professionals in health and disability insurance|
|CIWM||Certified International Wealth Manager||Professionals who help clients manage international wealth, assets, and cross-border taxes/business|
There are several other financial designations in Canada, and more designations may be added in the future. Many of these designations are obtained by passing courses and tests administered by the Institute for Advanced Financial Education in Canada.
Some designations require less time and are easier to obtain, while others require a substantial investment of time and passing difficult tests. Typically financial designations that are more difficult to obtain are associated with higher pay and prestige in the financial world.
Now that you have a better understanding of what a financial designation is, let’s take a closer look at each designation listed above. Below, I’ll outline the key areas of study and expertise associated with each designation and the average pay based on salary data.
The CFA designation is recognized globally, within Canada and many foreign countries. Chartered Financial Analysts are some of the most respected financial professionals in Canada.
Professionals who hold the CFA title are regarded as experts in areas such as:
- Portfolio management
- Accounting principles
- Investment analysis
- Global financial markets
As a CFA charterholder myself, I can attest to the intense level of study and dedication needed to obtain the designation.
Those pursuing CFA designation must complete a rigorous curriculum and successfully pass three levels of examinations. Each level has a high rate of failure. Candidates must also have at least four years of work experience, or a combination of work and educational experience, to be eligible for the designation.
In addition to their financial expertise, CFA charterholders must have a strong commitment to ethical standards and adhere to the CFA Institute’s Code of Ethics and Standards of Professional Conduct.
The Certified Financial Planner (CFP) designation is one of the top qualifications that a financial planner can achieve.
It is often pursued by professionals in related fields, including:
- Investment managers
- Tax experts
Financial planners who have earned the CFP designation are able to provide comprehensive advice to clients on various aspects of their personal finances, including their investments, taxes, estate planning, retirement, life insurance, and more.
To obtain their CFP designation, candidates must meet specific pre-requisite course requirements and undergo a stringent examination process.
Like CFAs, CFPs must adhere to a high standard of ethics and professional conduct. Their commitment to professionalism makes the CFP designation highly respected and sought after in the financial planning industry.
Chartered Investment Managers (CIMs) are trained to analyze investment opportunities and determine the best investments for particular clients.
Much of this depends on the level of risk that the client is willing to take on. Some clients are looking for a steady, low-risk portfolio to hedge against inflation, while others are interested in building a high-risk, high-reward portfolio.
As a CIM, you’ll need to understand both of these mindsets and work with clients to meet their needs. In this way, CIMs also help their clients with overall wealth management.
Many professionals with CIM credentials start off as basic portfolio planners to complete the two years of work experience required to be eligible for the program offered by the Canadian Securities Institute.
The Chartered Professional Accountant (CPA) financial designation is one of the more common financial career fields in Canada. CPAs are tax and accounting professionals who know the ins and outs of CRA regulations and tax brackets and are expert bookkeepers.
Unlike financial planners and CFAs, the primary focus of the CPA designation is on accounting, auditing, and taxation rather than finance or economics.
To earn their CPA designation, candidates must:
- Obtain a bachelor’s degree in accounting or a closely related field
- Successfully pass the Common Final Examination (CFE)
- Complete a minimum of two years of qualifying work experience
- Agree and adhere to CPA Canada’s stringent professional ethics and conduct standards
CPAs can be found working for corporations, charities, and non-profit organizations, assisting clients with tax services, bookkeeping, and consulting.
CPAs may also work with individual clients who are looking for greater expertise than that offered by a standard tax preparer.
Personal Financial Planners (PFPs) assist clients in managing their wealth help them optimize their asset portfolio. This credential is commonly pursued by bankers and financial advisors to help them better service their clients.
Those who’ve earned their PFP designation should thoroughly understand financial topics like:
- Real estate investments
- Basic investment strategies
To earn the PFP certification, candidates must first complete a course offered by the Canadian Securities Course (CSC) or the Investment Funds in Canada (IFC) .
After completing the qualified course, they must finish two mandatory Personal Financial Planning courses and pass a final certification evaluation test.
Registered Financial Planners (RFPs) provide comprehensive financial planning advice to individual clients and couples. This certification isn’t quite as common as the CFP designation, but both designations require a similar level of knowledge and expertise.
To be eligible for the RFP program, candidates typically have a bachelor’s degree in finance, accounting, or a related field, along with three years of experience in financial planning. They must be actively involved or employed in a position that involves financial planning as well.
RFP candidates must complete a series of financial planning courses and successfully pass the RFP exam.
The TEP designation, awarded by the Society of Trust and Estate Practitioners (STEP), signifies expertise in executing estates and managing trusts. TEPs often help their clients plan for their long-term retirement goals and help them create and execute their last will and testament.
This may involve:
- Retirement planning
- Distribution of inheritance to survivors
- Creating an elderly care plan
- Hospice plans
- Helping clients identify charities to donate to
Chartered Life Underwriters (CLUs) specialize in life insurance and estate planning. They provide tailored advice to clients on topics such as:
- Portfolio risk management
- Tax planning
- Wealth transfer
- Life insurance policies
To become a CLU, candidates must complete a series of courses offered by the Institute for Advanced Financial Education and pass the relevant exams.
The program covers topics such as life insurance, taxation, estate planning, and financial planning, equipping professionals with the necessary skills to serve their clients effectively.
A Certified Health Insurance Specialist (CHS) is an expert on health and disability insurance, offering expertise in living benefits insurance products (as opposed to life insurance).
The CHS designation is awarded by the Institute for Advanced Financial Education and requires candidates to complete courses on insurance before passing a final exam.
The program covers risk management, underwriting, and product knowledge related to living benefits insurance products.
A Certified International Wealth Manager (CIWM) is a financial designation awarded by the Canadian Securities Institute. CIWMs are experts in international taxes, managing global investments, and general wealth management for individuals who frequently live and work in more than one country.
Depending on the financial institution and clients that they’re working with, CIWMs could earn anywhere between $68,000 and $130,000 annually.
While the salary shouldn’t be the only reason you select a career path, it’s definitely a major factor when deciding which financial designation you may want to pursue. With an average salary of $126,311, Trust and Estate Planning (TEP) is the highest-paid financial designation in Canada.
That being said, salaries can vary significantly, depending on your experience level, additional certifications, and where you work. As a CFA charterholder, I earned significantly higher than the average pay of $76,984 referenced above.
Interested in pursuing a career as a CPA? Keep on reading for my guide on how to become a CPA in Canada!