What it means
Professional designations are everywhere in finance. Some, such as the CPA or the CFA, are widely recognised and carefully regulated, while others are awarded by smaller associations for specialist areas.
The letters after a name are shorthand for a body of knowledge, an exam and sometimes an ethical code. Because many abbreviations look similar, the same letters can mean different things in different countries or industries.
CPGA is an example of a less common abbreviation, and a manager who meets it on a business card or a proposal should ask what it stands for, who issues it and what is needed to earn it. There are four questions worth asking about any designation.
Is the issuing body independent and recognised by a regulator, a government or a respected professional association, and what education, exam and experience does it require? Does the holder need to keep learning through continuing education, and is there a public register where you can confirm that the person is in good standing?
The answers help you judge how much weight to give the title. A designation that requires a supervised exam, experience and an ethics code usually signals reliable competence.
One that can be bought with a short course and a fee carries much less assurance, and the label should not replace your own due diligence. For a business, this matters when hiring, appointing advisers or choosing suppliers.
A tax adviser, an investment consultant or a bookkeeper might all display letters that sound impressive. Checking the credential is quick and inexpensive, and it protects the company from relying on advice from someone who is not qualified for the task.
Finally, a designation shows what someone has studied, not how good they are. Experience, references, a track record and fit with your needs deserve equal attention.
In practice
Real-world examples.
Example
A small company is choosing a consultant to review its pension arrangements. The finance manager notices unfamiliar letters after one candidate's name and asks the issuing body to confirm the designation before shortlisting. The reply arrives within a day and settles the matter.
Example
A founder reads a proposal from an adviser who lists four sets of initials. She checks each one against the issuing bodies' public registers and finds that one has lapsed because the adviser stopped paying annual fees. She asks the adviser to renew it before any work begins.
Example
A recruitment agency is asked to fill a finance analyst role and is told that a specific designation is preferred. The agency lists the recognised designations and explains how each differs in rigour so the hiring manager can choose. The hiring manager decides that the role needs a recognised and regulated qualification.
Case study
Seen in the real world.
Hartwell Components is an illustrative, fictional mid-sized manufacturer that needed an adviser to help with its employee benefit plan. One candidate listed a string of initials, including a designation the finance director had not seen before, and quoted a fee of $15,000. The plan covered 250 employees, so a poor recommendation would have been costly.
Before signing, the finance director asked the candidate for the name of the awarding body and the requirements. She then checked the body's register and learned that the credential was valid, required an exam and needed annual continuing education. She kept a copy of the register entry in the supplier file.
In this illustrative case she hired the adviser, but also asked for two client references and a written scope of work. The designation helped to confirm competence, and the references confirmed experience, which together gave the board the comfort it needed. The finance director now follows the same short checklist for every new adviser.
Watch out
Common mistakes.
- Assuming that any letters after a name signal professional competence without checking who issues them.
- Treating all designations as equal, when the standards and regulation behind them vary widely.
- Forgetting to check that the designation is current, since many lapse if fees or training are not kept up.
Questions
People also ask.
How do I find out what a set of letters stands for?
Ask the person directly, then confirm with the issuing body's website or public register. If the person cannot say, treat that as a warning sign.
Does a designation guarantee good advice?
No, it shows that someone met certain standards, but you should still check experience, references and fit with your needs. A good adviser will be happy to supply references.
Are designations regulated?
Some are protected by law or by a regulator, while others are simply private credentials, so the level of oversight differs.
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