A Quick Guide To Financial Services Lingo


CFP, CFA, FRM – what do these acronyms mean?

There are a lot of industry-specific terms associated with the financial services industry that you might not be familiar with.

Here’s a quick explanation of some terms you’ll want to look into when considering a career in the field:

Finance (just in case):

The management, creation and study of money, banking, credit, investments, assets and liabilities.

Financial institution:

An organization that provides financial services such as investments, loans and deposits to commercial and retail customers.

Financial institutions include banks, trust companies, insurance companies and investment dealers.

Financial plan:

A plan for achieving financial goals that takes into account a client’s current net worth, tax liabilities, assets and future retirement and estate plans.

A financial plan generally includes a budget with specific plans for spending and saving future income.

Financial Advisor (Financial Planner, Personal Financial Consultant):

Financial advisors create financial plans for their clients. They provide guidance that can help their clients get out of debt, save and invest their earnings and create a long-term financial plan.

Financial advisors provide guidance, helping people choose investments, insurance and other financial products. They deal with retirement planning, college funding, estate planning and more.

Certified Financial Planner (CFP):

The globally recognized ‘gold standard’ professional designation for Financial Planners. The certification process involves taking courses, passing two levels of exams and building work experience. To be eligible for CFP certification you must hold a bachelors degree and have at least three years of relevant work experience.


A service fee that financial advisors or brokers charge clients in return for providing investment advice and/or handling the purchase or sale of a security. Financial advisors typically earn a significant amount of their compensation through commissions. In some cases, financial advisor’s work on an exclusively commission basis .

Financial analysis:

Involves evaluating business plans to determine their suitability for investment. Financial analysts will often focus on income statements, balance sheets, and cash flow statements in their analyses. Financial analysts can hypothesize about a company’s future performance based on their analysis of past and present data.

Chartered Financial Analyst (CFA):

The globally recognized ‘gold standard’ professional designation for Financial Analysts. The certification process involves passing three levels of exams on accounting, economics, ethics, money management and security analysis. To be eligible for CFA certification you must hold a bachelor’s degree and have at least four years of investment/financial career experience.

Risk management:

Involves determining the risks associated with an investment, and handling those risks in a way that works best to achieve their investment objectives. Risk management occurs everywhere in the financial sector. For example, individuals practise risk management when they decide whether to invest in low risk bonds, or higher risk stock options. When a bank performs a credit check on an individual before issuing them a personal line of credit, they are using this information to assess the risk of them defaulting on their loan.

Financial Risk Manager (FRM):

The globally recognized ‘gold standard’ professional designation for risk managers. The certification process involves passing two levels of exams. Though there are no educational or professional prerequisites to take the FRM, to pass the challenging exams, candidates must be well versed in financial risk management. To be eligible for FRM certification, you must complete at least two years of related work experience.

This list is just the tip of the iceberg when it comes to Financial Services terms and certifications.

Learn more in TalentEgg’s Financial Services Career Guide!