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CLU vs. ChFC for Financial Advisors

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A financial advisor researching the differences between CLU and ChFC designations.

Financial professionals have a range of certifications to show their skill and specialties. Among these, the chartered life underwriter (CLU) is a certification program for life insurance specialists. It covers law, products, planning and business within the life insurance industry. The chartered financial consultant (ChFC), on the other hand, is a certification program for financial planners. It covers finance, risk management, investing, taxes and other areas related to individual financial management. Both of these are credentials are offered by The American College of Financial Services. Here’s what you need to know.

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What Is the CLU?

The CLU, or chartered life underwriter, is a certification program for life insurance specialists. Financial professionals pursue this program to improve their skills and education in the field of life insurance and to establish expertise for potential clients.

Requirements for a CLU

To enroll in the CLU course you must have three years of related professional experience within the five years preceding the award of this certificate. The program has no educational or other prerequisites aside from a high school diploma or equivalent. That said, most individuals will need an advanced degree in order to get the required professional experience. 

To receive a CLU, you must complete five courses. This includes four core courses and one elective. You must pass a final exam attached to each course and agree to the college’s code of ethics. To maintain the designation, you must participate in the college’s annual recertification program. The chief requirements of this program are 30 hours of continuing education every two years, including one hour dedicated to ethics, and an annual fee of between $105 and $190. 

Enrolling in the CLU program costs either $925 per course or $3,795 for the five-course program. It typically takes between 12 and 15 months to complete a CLU course.

Why Get a CLU?

If life insurance is part of your practice, the question here is whether the CLU will offer benefits to offset almost $4,000 in tuition, almost $200 in annual fees and more than a year of studying. The CLU might be useful for professionals who work in fields that include:

  • Insurance sales and planning
  • Estate and retirement planning
  • Employee benefits planning
  • Holistic financial planning

The CLU can help to attract new clients by showcasing a professional’s expertise. However the other main advantage to this program is the substantive education. The courses in this program cover subjects such as life insurance products, risk management, solutions and needs, employee benefits, insurance law, ethics and estate planning. 

For professionals who already work with life insurance products, this material likely will supplement and fill in their existing knowledge rather than build new expertise. However, this can still provide substantive benefits and education.

What Is the ChFC?

A financial advisor looking up the requirements for the ChFC designation.

The ChFC, or chartered financial consultant, is a certification program for financial planners. Financial professionals pursue this program to improve their skills and education and to establish a comprehensive financial planning specialty for potential clients.

Requirements for the ChFC

To enroll in the ChFC course you must have three years of related professional experience within the five years preceding the award of this certificate. The only educational requirement is a high school diploma or equivalent. That said, most individuals will need an advanced degree to get the jobs required for the professional experience prerequisite.

To receive the ChFC certificate you must complete eight required courses. This program has no electives. Each course has a final exam that you must pass, and the American College of Financial Services requires students to agree to an ethics code. To maintain this designation you must participate in the college’s annual recertification program. Mainly, this program requires 30 hours of continuing education every two years, including one hour of ethics education, and an annual fee of between $105 and $190. 

Enrolling in the ChFC program costs $925 per course or $6,195 to enroll in all eight required courses as a package. It typically takes about 18 months to complete this program.

Why Get a ChFC?

The ChFC is most useful for professionals who work in overall financial management. This can include financial planners, investment and asset managers, and related financial managers.

In addition to attracting new clients, the ChFC offers substantive educational benefits. The course material covers a wide range of issues related to financial planning. This includes tax management, retirement planning, investment strategies, wealth and risk management, estate preparation and many other subjects. For financial managers, this program is typically a good way to learn more about the field and add specialized knowledge to an existing skill set.

Bottom Line

A financial advisor deciding between CLU and ChFC designations.

Both programs offer a certification for financial planners, but each has its own advantages. Broadly, the CFP designation is better known by the general public and potential individual clients. It also requires a bachelor’s degree in addition to the same work requirements as the ChFC. The chartered financial consultant designation, on the other hand, covers a more comprehensive education, and so may be more substantively useful for building skills, but is less well known among potential clients. 

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Photo credit: ©iStockPhoto/Mateja Sekulic, ©iStockPhoto/South_agency, ©iStockPhoto/Mikhail Spaskov

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