An individual retirement account (IRA) can be the foundation of a great retirement plan. However, it takes a skilled financial planner to match a client up with the right IRA for their retirement. The Certified IRA Services Professional (CISP) designation can help separate financial advisors who know IRAs from those who may be less familiar. Here’s how the CISP works, what it means, and how to get it.
A CISP Defined
Earning a CISP credential helps wealth and trust professionals demonstrate their expertise in IRAs. It’s an optional credential and doesn’t convey any special privileges or powers. However, the CISP initials show a person has met an industry-recognized standard for IRA knowledge and competence.
Many people who earn a CISP work as bank trust officers, helping individuals plan for a financially secure retirement. They may also be employed as bank branch managers, trust administrators, or advisors in financial planning firms.
The CISP certification indicates that a financial professional is well-informed on traditional IRAs as well as SEP-IRA and SIMPLE IRA. They are also knowledgeable about IRA fees, investing, plan portability, and distributions.
The American Bankers Association (ABA) issues CISP credentials. To earn them, applicants must possess a combination of experience and education. Also, they have to pass an exam.
Applicants with at least four years of IRA experience are eligible to take the exam without any additional education. In fact, they must have a minimum of two years of experience just to apply. If they have at least that much, they have to complete an additional educational program.
The ABA recognizes credits from five IRA-based institutions: Ascensus IRA Institute, ABA IRA Online Institute, Cannon Financial Institute IRA Professional School, Integrated Retirement Initiatives IRA School and The Entrust Trust Company IRA Academy.
The ABA’s IRA Online Institute course takes 12 weeks. The ABA suggests students budget 15 to 20 hours a week while taking the course.
Students learn about eligibility and how to set up traditional and Roth IRAs, SEP and SIMPLE plans. They’ll learn about beneficiaries, contributions, distributions, rollovers and transfers.
In addition to the experience and educational requirement, applicants must pass a 150-question, multiple-choice test. Students get three hours to take the test and can use calculators provided by the testing facility.
Computer-based exam takers learn whether they pass or fail immediately afterward at the test site. Meanwhile, six weeks later, they receive official results.
The test covers seven major topics. Employer plans, including SEP and SIMPLE plans, encompass 10% of the exam.
Another 10% covers IRA documentation and maintenance requirements. For example, some question may establishing and maintaining IRAs, designating beneficiaries and reporting.
Further, 15% of the exam covers IRA eligibility and contribution requirements. In other words, it covers deductibility and rules and penalties on excess contributions.
In addition 25% percent covers retirement plan portability. Topics include transfers, rollovers, conversions and recharacterizations.
Moreover 20% of the test emphasizes distributions. This tests knowledge on taxes, withholding rules, required minimum distributions, death distribution rules and penalties.
Yet another 10% covers fees and investments, rules, fees and prohibited transactions. Finally, 10% is dedicated to estate planning, choosing beneficiaries, trusts and estate and income taxes.
This is what a sample test question looks like:
- Which of the following data is protected by the privacy provisions of the Gramm-Leach-Bliley law?
- Public personal information
- Public institutional information
- Nonpublic personal information
- Nonpublic institutional information
In case you haven’t been studying, the correct answer is, “c. Nonpublic personal information.”
The cost for the online class is $1,595 for ABA members. Non-members pay $1,795.
An applicant with four years of IRA experience can skip the class and fee. However, there is a $295 application fee for all applicants.
The CISP exam fee is $550. Retaking the exam in event of a failing grade costs $300. Applicants must wait 90 days to retake the test. There is no limit to the number of retakes. But applicants have to pass within three years of the first attempt or re-apply and pay the full fee.
Applicants also have to agree to adhere to a code of ethics. They also need to take 24 credits of continuing education, equal to 20 hours of study, every three years. Finally, they must pay an annual $199 membership fee.
Some financial services firms advertise that many or all of their staff have the CISP certification. However, it’s not a requirement to work in the retirement planning field.
IRA advisors also may get certifications such as Certified Financial Planner, Certified Retirement Services Professional and Certified Trust and Financial Advisor. These alternatives to the CISP certificate may provide more distinction, at the price of additional study.
The Certified IRA Services Professional (CISP) certificate signifies that an adviser has a significant level of experience, education and practical knowledge about IRAs.
The CISP certification is optional and doesn’t convey any special privileges or powers. It may, however, be helpful for someone seeking work in a bank trust department or financial planning firms.
- Wondering which IRA is right for your retirement portfolio? Consider consulting a financial advisor. Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.
- Do you know how much money you’ll need for retirement? Do you have any idea what your 401(k) will be worth or how much tax you’ll have to pay? Have you decided how big a role Social Security will play in retirement? If the answer to any of the above is no, SmartAsset’s retirement guide can help fill in some of the blanks.
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