Financial advisors can hold a range of certifications and licenses. Two such designations are CIMA (certified investment management analyst) and CFP (certified financial planner). The CIMA is intended for those who help people manage their investments, while the CFP is a much broader certification covering all aspects of personal finance. However, a CFP may also specialize in investment management.
For help finding a financial advisor who can help you achieve your goals, use SmartAsset’s free financial advisor matching service.
What Is a CIMA?
A CIMA is a certified investment management analyst. This certification is offered by the Investments & Wealth Institute for financial advisors who focus on investment management. In fact, Investment & Wealth Institute’s welcome page for the CIMA certification highlights the average assets under management (AUM) of those with a CIMA ($297 million).
A CIMA can work with either individuals or corporations, but their individual clients tend to have high net worths. They may help with a variety of investments, such as retirement funds, endowments or corporate investments.
One way CIMAs differentiate themselves is they must show expertise in business strategy, operations and management. Hence, they are well suited to helping not only individuals but also businesses.
There are two primary prerequisites before one can obtain the CIMA. Firstly, applicants must have three years’ financial services experience. In addition, they must have a satisfactory record of ethical conduct. That determination is made by Investment & Wealth Institute, the organization that sponsors the certification.
CIMA certificates are available for both business accounting (BA) and professional qualifications. The BA exam is 120 minutes long with four sections; the first three have 60 questions each, while the fourth has 85 questions. The professional qualification exam comes in the form of three 90-minute-long objective tests, plus 3-hour case studies to go with each objective test. Results are issued 6-8 weeks after the case study window closes.
What Is a CFP?
A CFP is a certified professional planner, which is a professional who can focus on a wide range of personal finance specialties. For example, they may specialize in investment advice, insurance, tax or estate planning, retirement and more. Generally, CFPs focus on just one of these areas but can help you with the basics in all aspects of personal finance.
CFPs meet with clients and take inventory of all of their finances, including their investments, properties and cash, as well as any outstanding debt. Then, they work with clients to create a tailored financial plan to help them meet their goals.
Because the CFP is so broad, CFPs will often hold other certifications or licenses that match their area of expertise. Hence, a CFP might also have a CIMA or other certifications such as the retirement income certified professional (RICP).
CFPs must also adhere to CFP Board’s ethical standards, which includes the disclosure of their involvement in cases involving things like criminal activity and bankruptcy.
Those who want to obtain the CFP must have at least a bachelor’s degree from an accredited college or university. They must also have three years of financial planning experience or at least 6,000 hours of equivalent part-time experience.
The CFP exam consists of 170 multiple-choice questions divided into two 3-hour sections for a total of six hours. There is a 40-minute break between the two sections. Each section is divided further into two subsections. There are standalone questions as well as those that go with case studies. The exam is scored on a pass/fail basis.
CIMA vs. CFP
While the CIMA and the CFP are distinct certifications, the two have some similarities in terms of their requirements, as noted in the table below.
Comparison of CIMA and CFP
|Issuing organization||Investments & Wealth Institute||Certified Financial Planner Board of Standards|
|Prerequisites||– 3 years’ financial services experience|
– Satisfactory record of ethical conduct
|– Bachelor’s degree or higher|
– 3 years’ experience or 6,000 hours of part-time experience
|Training requirements||– Educational component offered by approved registered education provider|
– In-class program at The Wharton School, University of Pennsylvania or online through Yale School of Management
|CFP-board registered exam or hold a relevant license, certification or degree|
|Continuing education||40 hours every 2 years||30 hours every 2 years|
Those looking for a financial advisor may wonder which certification is better for them, and it really depends what services you’re looking for. If you only want investment advice, a CIMA is a good fit. If you’re looking for more holistic planning, a CFP should be able to get the job done. Of course, some advisors have both certifications, giving you the best of both worlds.
CFPs and CIMAs can have many similarities, but there are also notable differences. For instance, a CFP might advise clients on investment strategies. However, CFPs also specialize in many different areas of finance, such as tax and estate planning and insurance. Meanwhile, the CIMA is intended for financial advisors who provide investment advice. But CIMAs must also have at least some knowledge of business processes and strategy, which is absent from the CFP requirements. Both programs are rigorous, albeit in different ways.
Tips for Financial Planning
- Whether you need a CFP or a CIMA, it is critically important to invest in your retirement. But if you don’t know how much you have saved for retirement, you could be setting yourself up for financial hardship. Use SmartAsset’s free retirement calculator to estimate your retirement savings.
- Regardless of certifications, a financial advisor can help you achieve your financial planning goals. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
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