Certified Private Wealth Advisor (CPWA)

Written by True Tamplin, BSc, CEPF® | Reviewed by Editorial Team

Updated on January 03, 2023

What Is a Certified Private Wealth Advisor (CPWA)?

Certified Private Wealth Advisors (CPWA) are professional financial advisors who advise high-net-worth clients. The Investments and Wealth Institute issues the CPWA certification. 

CPWAs provide complete financial planning services to high-net-worth individuals with $2-5 million in assets, including investment strategy and portfolio management guidance.

They deeply understand the wealth lifecycle from accumulation and preservation to distribution. They develop strategies to minimize taxes, monetize and protect assets, maximize growth, and transfer wealth.

CPWA Qualification and Training Requirements

Certified Private Wealth Advisor is not for everyone. An aspirant must have prior experience working with high-net-worth clients.  You may find the prerequisite, training and exam information below.

Prerequisites

Candidates for Certified Private Wealth Advisors must meet specific educational, experience, and ethical requirements. 

  • Bachelor's degree from an accredited college or university, or any one of the following licenses: CIMA, CIMC, CFA, CFP, ChFC, or CPA license
  • A good record of ethical behavior, as established by the Admissions Committee of IMCA
  • 5 years of client-centered professional experience in financial services or a comparable industry

Designation Training Requirements

CPWA candidates must complete 6 months comprehensive program of study, which includes a combination of self-study and interactive instruction. 

The curriculum covers investments and asset allocation, tax planning strategies for high-net-worth families, estate planning strategies, financial planning processes, and practice management.

The training program can be obtained through the IMCA’s approved course providers, the University of Chicago Booth School of Business or the Yale School of Management, or through their investment firm.

Designation Exam Type 

The CPWA designation requires candidates to pass an examination that consists of 135 multiple-choice questions, 10 of which are beta. You will be graded on 125 questions only.  

The exam covers various topics, including investments, risk management, and estate planning for high-net-worth individuals.

The exam does not have a predefined passing score. The Modified Angoff Scoring Method is used to grade the exam. Your pass percentage is determined by the complexity of the exam you received. 

If your exam is easier, the passing score will be higher. But the passing score will be lower if your exam is more complicated.

Continuing Education Requirements

To maintain their CPWA certification, professionals must complete 40 hours of continuing education every two years. 

This training covers topics related to professional ethics and the practice of private wealth management, as well as any new regulations that may affect the financial services industry.

CPWA_Qualifications_and_Training_Requirements

CPWA Exam Structure

The CPWA exam structure is composed of four sections: Human Dynamics (13%), Wealth Management-Technical Design (34%), Legacy Issues (23%), and Specialty Client Services (30%). 

Each section contains questions ranging from easy to difficult, with all questions rated on a scale of 1-5 points depending on complexity. Candidates will have four hours to finish the exam. 

Human Dynamics (13%)

The Human Dynamics section focuses on people's behaviors and how they affect decision-making in the financial services industry. 

Ethics. Knowledge of maintaining a high level of professional conduct, including the rules in case of any violation. 

Applied Behavioural Finance. Understanding the origins and evolution of behavioral finance and neurological research, as well as its application to financial decision-making

Family Dynamics. Knowledge of resources and abilities required to recognize family dynamics, challenges, and opportunities. 

Wealth Management - Technical Design (34%)

This section explores the technical aspects of wealth management.

Tax Strategies and Planning. Understanding the principles of taxation, tax planning strategies, and how to apply them in various wealth management scenarios.

Portfolio Management. Using tax-aware investment strategies and after-tax return assumptions to calculate portfolio returns. Tax efficiency, tax-loss harvesting, equity performance, and fixed-income manager evaluations are covered.

Risk Management and Asset Protection. Learning about high-net-worth families' insurance options and risk management strategies like self-insurance. It also teaches how to evaluate a client's insurance needs and compare policies to identify coverage gaps.

Client Specialization (30%)

This part focuses on specialized services and strategies for high-net-worth clients.

Client Focus on Executives. Understanding stock option award programs, basis, holding periods, and risk-reward strategies for exercising options.

Client Focus on Closely Held Business Owners. Learning about financing issues, succession planning, and company sale strategies. 

Client Focus on Retirement. Building assets, retirement plan taxation, net unrealized appreciation, and others. Calculating the required minimum distribution, assessing retirement capital needs, and placing assets in tax-deferred and after-tax accounts.

Legacy Planning (23%)

This course covers legacy and estate planning topics.

Charitable Giving and Endowments. Understanding charitable lead trusts, donor-advised funds, unrelated business taxable income, and private foundation operations. Identifying public and private charities, taxing donated property, and planning charitable donations.

Estate Planning and Wealth Transfer. Learning about incapacity, powers of attorney, post-mortem planning, and other strategies. Assessing a client's estate plan and determining lifetime gifts versus transfers at death to help them understand legal documents.

CPWA_Certification_Topics

CPWA Exam & Certification Costs

CPWA certification costs $7,295. Included are the application fee, background check, tuition, course materials, executive education room, board, one certification exam attempt, and the initial two-year certification fee. Retaking the exam will require you to pay $225.

You have 2 options for where to obtain your executive education. 

CPWA_Executive_Education_Options

Benefits of Having a CPWA Certification

CPWA-certified professionals are satisfied in their jobs, earn more money, and manage more assets for high-net-worth customers than other advisors. 

Here are some benefits of having CPWA certification.

Provides Specialized Expertise and Skills

The CPWA certification provides financial professionals with specialized expertise and skills in portfolio management, risk management, asset protection, and legacy planning. 

Moreover, it also provides insight into the different taxation principles and tax planning strategies that can be applied to various wealth management scenarios.

Helps Obtain and Maintain High-Net-Worth Clients

Having a CPWA certification helps financial advisors stand out from the competition and establish their credibility as knowledgeable professionals making them attractive to clients.

It also helps them gain more confidence when dealing with high-net-worth clients, as they are better equipped to provide tailored advice for their specific needs.

Increases Firm Revenues

CPWA-certified advisors can use their technical knowledge and understanding of complex taxation issues to increase firm revenues. 

Moreover, the certification also helps them provide more comprehensive wealth management services to their clients, thereby helping to increase profits.

Vests an Elite Education

The CPWA certification provides financial advisors with a top-level education in portfolio and asset management, taxation principles and strategies, retirement planning, and legacy planning. 

They stay ahead of the competition when providing sound advice to high-net-worth clients. Moreover, CPWA certification is a sign of prestige that can further enhance their professional reputation.

CPWA vs CIMA 

The Chartered Institute of Management Accountants (CIMA) focuses on business skills, management, and strategy and has a focus on industry. In comparison, the CPWA focus on the life cycle of wealth for high-net-worth individuals.

Both CPWA and CIMA certifications offer comprehensive portfolio and asset management training, as well as other areas of investment analysis.

However, there are several differences between the two certifications.

Exam Structure

THE CPWA program is a single-level course focusing on the following four areas of expertise: Human Dynamics, Wealth Management, Legacy Issues, and Specialty Client Services.

The CIMA program consists of a Certificate in Business Accounting and a Professional qualification, each broken down into one of the following levels: Operational Level, Management Level, and Strategic Level.

Course Duration

CPWA certification candidates can complete the course in 6 to 9 months.

On the other hand, candidates for CIMA may need about a year to finish each level. So, it takes about 3 to 4 years to complete the course.

Exam Fees and Other Costs

The CPWA course fees range from $6,995 to $7,995, depending on the candidate's membership status.

On the other hand, CIMA course fees range from $3,055 to $3,666 including exam and study materials.

Potential Jobs

Those who have earned a CPWA certification are qualified to work in various fields, such as wealth management, asset management, portfolio management, and consulting.  They could work as private wealth advisors, managers, financial planners, or financial advisors.

CIMA professionals are well-suited for corporate finance, accounting, and business management jobs. They may work as a finance controller, management accountant, business analyst, forensic analyst, or a project manager.

Exam Date

After completing the Yale School of Management or University of Chicago Booth School of Business program, CPWA candidates can take the certification exam.

Meanwhile, CIMA exams are usually held four times a year.

CIMA_vs_CPWA

Final Thoughts

The CPWA certification is a rigorous and comprehensive program that provides financial advisors with the skills and knowledge they need to succeed in the wealth management industry. It also gives them an edge in providing sound advice to high-net-worth clients.

Candidates who wish to become Certified Private Wealth Advisors must fulfill several specific educational, experience, and ethics requirements.

The candidate's membership status determines the amount of the CPWA certification fee, which can range anywhere from $6,995 to $7,995.

The CPWA certification equips financial professionals with specialized knowledge and abilities in portfolio management, risk management, asset protection, and legacy planning.

Financial advisors can distinguish themselves from the competition and establish credibility as knowledgeable professionals by obtaining CPWA certification. They can increase firm revenue by utilizing their technical expertise and understanding of complex taxation issues.

FAQs

How do you find a CPWA?

Financial advisors who have obtained the CPWA certification are listed on the Investment & Wealth Institute website.

What types of jobs can you qualify for if you are a CPWA?

Those who have obtained the CPWA certification are eligible to work in various fields, such as wealth management, asset management, portfolio management, and consulting.

What is the difference between a CPWA and CIMA?

The CPWA (Certified Private Wealth Advisor) is a single-level certification test. The CIMA (Chartered Institute of Management Accountants) candidate can complete the course by passing all three levels: operational, management, and strategic. The CIMA focuses on investment advice and asset management. In comparison, the CPWA covers tax, estate, and retirement planning.

What are the topics covered in the CPWA exam?

The CPWA exam covers topics related to Human Dynamics, Wealth Management, Legacy Issues, and Specialty Client Services. Each topic is further broken down into sub-topics like Investment Strategies, Estate Planning, Risk Management, Tax Planning, Retirement Planning, and more. The test also includes questions on client service practices and ethics.

How much does it cost to obtain a CPWA certification?

The CPWA certification fees range from$6,995 to $7,995, depending on the candidate's membership status.

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.

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