Close Close

Industry Spotlight > Broker Dealers

Should CFAs Be Accredited Investors?

Your article was successfully shared with the contacts you provided.
Accredited investor defintion - CFA, ChFC, CPA or IRS EA?

Which designation should be added to qualify as an accredited investor under the Securities and Exchange Commission’s new definition?

The question has sparked much debate since the securities regulator expanded the definition on Aug. 26 to allow investors to qualify based on defined measures of professional knowledge, experience or certifications.

The new definition added holders of certain licenses from the Financial Industry Regulatory Authority as accredited investors. The SEC said it would “reevaluate or add certifications, designations or credentials in the future.”

In a recent ThinkAdvisor Twitter poll, respondents were asked to choose from one of four designations: chartered financial analyst (CFA), CPA, chartered financial consultant (ChFC) or IRS enrolled agent.

Of the 227 respondents, 59.9% voted to add CFA, with the EA coming in last, at 4.8%.

CPA came in second, with 19.4% of advisors voting to add this credential, while adding ChFC garnered 15.9% of the votes.

Advisors were also quick to weigh in with their votes on other titles that merit consideration.

“CFP should be added way before CHFC,” tweeted Carmari Ellis, who calls himself The Finance Rebel.

Jeff Levine, a certified financial planner, CPA and director of advanced planning at Buckingham Wealth Partners, replied that he was “not convinced having any specific letters after your name (and I have a bunch) should automatically qualify you as an accredited investor.” However, “I can make a reasonable case for CFA, CPA, and ChFC, but NOT the EA. It’s solely focused on taxes.”

Levine’s tweet garnered quite a few responses.

Nikki Schnelle, a CPA, Registered Principal and CFP candidate, tweeted in response to Levine’s tweet that she knows “a lot of CPAs who know nothing about investing … I only became proficient after taking [FINRA exams] and having actual experience.”

Kurt Wunderlich tweeted in response that he’d “vote for CFA and CAIA [Chartered Alternative Investment Analyst] and probably stop after that. The other designations don’t cover investing or analysis like those two do.”

Scott Salaske added that he doesn’t think “any letters after someones name should automatically qualify them as an accredited investor. I know of many people who have either CFP, CFA, or CPA, etc. after their names and are clueless about investing and have no common sense. They are just good at taking tests.”

— Related on ThinkAdvisor: