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Certificates, certificates on the wall, which are most prestigious ones of all?

Competition can be fierce in every profession, but in the world of financial services, it's pretty much a given. So you want to be armed with most powerful tools and weapons at your disposal. Ranking high in that arsenal are the financial certifications and degrees you acquire as you advance through minefields or along career paths littered with tripwires designed to purge the industry through its own form of corporate Darwinism.

While having your walls papered with certificates and degrees has become the standard, not all certifications and MBAs are created equal. To put it another way, just because you have a CFP or a CFA, doesn't mean you graduated with a degree in finance from an accredited business school, implying that CFP would lack the firepower of one hanging next to a degree from Wharton. 

"Somebody with a degree in comic book art or folklore-mythology can apply for charter, board certification, or certificates to some of the most well known organizations," said Dr. George Mentz, Wealth Management professor and author.

In fact, the newest trend in standards over the last decade is for certification bodies to partner directly with accredited business and law schools whereby graduates of specialized courses and assessments become eligible for board certification or professional designation, said Mentz.

The Consumer Financial Protection Bureau and other global organizations are trying to improve the way they apply meaning to someone's professional and educational credentials. "Often overlooked is that the Council of Higher Education Accreditation (CHEA) already recognizes several premium business school accreditation agencies such as the Accreditation Council for Business Schools and Programs (ACBSP)," he added.

Recently, business and financial certifying bodies such as the American Academy of Financial Management (AAFM); the Investment Management Consultants Association (IMCA) and the Certified Financial Planner (CFP) Board of Standards recommended that designations and certifications be rated or ranked for quality assurance, noted Mentz. "That rating should be based on quality of education, standards, assessment and experience."

The best business schools are already accredited by the ACBSP and many of the best ranked programs have over 100 years of quality education, degrees, diplomas, or world recognition, he explained. "Accordingly, a board certification earned by successfully completing accredited program exams, courses or concentrations provides assurance that the advisor is proficient with college degree level business education and knowledge," said Mentz.

Accredited business schools that also have a separate university institutional accreditation represent approximately the top 10 percent of business degree programs worldwide, he points out. These business programs require learning in the areas of: economics, finance, accounting, management and other key knowledge areas such as ethics. 

On the other hand, the top purveyors of certificates such as CFP and the CFA Institute have offered or may continue to offer certification to those without an accredited business school education and degree, said Mentz.

So what should you be hanging on your office wall? How about combining a degree from an accredited business school with the prestige of a CFP or a CFA? This doesn't mean that if you didn't go to Princeton, Yale, NYU or any of the universities with well known business schools, you'll be ignored. There are over 1,000 accredited business programs in the U.S. says Mentz that have specializations in finance, corporate finance, accounting, economics, math, taxation, wealth management, and related financial topics.

Still, when all is said and done, earning the certificates and degrees can only take you so far. It's what you do with them that really matters.

AUTHORFred Yager Insider Comment
  • Bo
    10 September 2014

    The above post has some fundamental misunderstandings of education.

    1) Accredited education has assessment built into every class or course.

    2) Business schools that are nationally accredited, are accredited by 2 bodies both regionally and nationally.

    3) The bulk of the CFPs are without a college education and only took 5 take home classes i.e. distance mail order education. The first 30 thousand or so CFPs did not take a comprehensive exam

    4) The average business school grad takes 20-30 exams under the supervision of an accredited institution.

    5) CFA and CFP outsource the exams

    6) CFA was originally a bookeepers designation. It is not a board certification but a charter or designation.

    7) CFP and CFA are SRO self regulated societies or associations. The have no government recognition directly.

    8) A business degree from a 3rd tier state school in California, Texas, or New York is probably more rigorous that a 1st tier school.

    The writer above may be a bit surprised to see that there are little or NO executives in finance such as a CEO who is a CFP? or CFA? but rather all of them are MBAs.


  • an
    27 August 2013

    I was very surprised to read this article, and frankly it seems misguided.

    The quality of professional certifications such as the CFA and CFP are well known and consistent nationally (and in the case of the CFA, internationally). The quality of the education received from business schools on the other hand varies considerably from one business school to the next.

    While I agree that an MBA from Harvard, Wharton, Stanford or Booth trumps any professional certification, the vast majority of MBA programs today are now being offered online, in executive formats that cost $50,000 - $75,000 (and let's face it - no one fails) or part-time that take up to 10 years to finish. While the curricula may be broader in scope than say the CFA or CFP programs, they simply lack the focus and depth necessary to prepare the graduate for a career as a Financial Analyst or Financial Planner. It's not that a CFA or CFP is better than an MBA, its just that they're more applicable to certain professions.

    Furthermore, the fact that these certifications do not require a pre-requisite business degree, in my opinion, is a testament to their rigour. A pre-requisite would only be beneficial to the professional certification program if its organizers assumed that candidates had a certain degree of knowledge prior to enrolling. By explicitly assuming that they do not, the program is more comprehensive because it's forced to cover every aspect of professional practice that the candidate can be reasonably expected to face.

    But I do agree that there is a problem in the financial industry with the myriad of other financial designations that are of questionable quality. As such, I would support, albeit for different reasons, a system of benchmarking for both professional certifications/designations AND academic degrees, diplomas and certificates against a meaningful standard such as a Composite of Top 10 MBAs.

    I think that would satisfy the issue to everyone's satisfaction, including the public's, although I think Mr. Mentz may be a bit surprised to see the CFA and CFP trump most and MBA degrees.

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