Choosing an M&A Advisor: Guide to Professional Designations
In choosing a professional advisor, business owners must be careful to pick a trustworthy professional who has their best interests in mind and can execute. One way to gauge a financial advisor’s ability is by his or her professional designations. Obtaining a professional designation requires additional education and testing in a specific field of expertise. Professional designations are an important indicator of the caliber of a financial advisor, though a diligent business owner should also consider additional criteria in evaluating individuals that will provide advice on potentially the largest financial transaction of their lives.
The four most recognized financial designations are Chartered Financial Analyst (CFA), Chartered Accountants (CA) (Canada or UK), Certified Public Accountants (CPA) and Master of Business Administration (MBA). These designations are widely accepted as the highest standard for professionals with regards to the advanced financial knowledge often needed to navigate through the complexities of a mid-market transaction.
There are a number of specialized designation that complement the more recognized financial designations noted above. Obtaining a level of specialty beyond a MBA, CA, CFA or CPA demonstrates the added commitment of the professional to his or her craft.
There are however a growing number of for-profit, weekend designation programs that has led to a dangerous level of confusion in the marketplace. It is important to evaluate the prestige of the organization offering the designation, depth of content and rigor in obtaining the certification. The following compilation of speciality designations is not an endorsement, but merely a summary of the various organizations that provide accreditation to professionals in the areas of exit planning, business valuation and mid-market investment banking.
Exit Planning Designations
Certified Exit Planning Advisor (CEPA)
CEPA is a designation obtained from the Exit Planning Institute (EPI). EPI has offered the five-day certification program since 2007 and it is currently the most widely accepted and endorsed professional exit planning program in the world. CEPAs are trained and educated to identify and address potential exit planning issues, build a comprehensive exit strategy and educate business owners on important exit planning topics. Graduates of EPI’s CEPA Program also continue to benefit from continuing education and access to industry forms and templates.
Certified Business Exit Consultant (CBEC)
CBEC is a professional designation offered by Pinnacle Equity Solutions. Pinnacle’s program consists of a five-day learning program followed by a four-week marketing and sales program designed to get newly certified members hands-on exit planning experience. Graduates of Pinnacle’s program continue receiving monthly training sessions on practice management and technical exit planning training.
A Certified Exit Planner (CExP)
The CExP designation is provided by Business Enterprise Institute (BEI). BEI’s program consists of a two-day training session, 10 online courses, and a two-part exit planning exam. A CExP is required to also hold another accepted professional designation or equivalent professional experience. Graduates of BEI’s program are required to complete 30 continuing education hours per year to maintain their CExP designation. BEI program standards are also backed by an independent, non-profit, Board of Standards Corporation.
Business Valuation Designations
Chartered Business Valuator (CBV)
CBV is a professional valuator who has received their designation from the Canadian Institute of Chartered Business Valuators (CICBV), an accrediting body in the field of business valuation in Canada. CBVs specialize in quantifying the worth of a business, including its intangible assets, brand and intellectual property. To earn the designation, candidate must have a degree from a post-secondary academic institution or university, gain valuation experience at place of employment, complete a number of required courses and pass the Membership Qualification Entrance exam.
Certified Valuation Analyst (CVA)
CVA is a professional accredited in the field of business valuation. CVAs members receive their designation from the National Association of Certified Valuators and Analysts (NACVA). NACVA is a professional association of over 31,000 CPAs and other valuation experts. This designation is obtained after completing a sample Case Study or Fair Market Value report, an optional five-day training program and submission of two personal and two business references.
Certified Business Appraiser (CBA)
CBA is a professional accredited in business appraisal and has received a designation from the Institute of Business Appraisers (IBA). The IBA was established in 1978 and is the oldest professional association devoted solely to the appraisal of closely-held businesses. Prerequisites to obtain the CBA include possession of a 4-year college degree or equivalent, completion of a comprehensive workshop, passing a 5 hour written exam, and submission of two appraisal reports.
Accredited Senior Appraiser (ASA)
ASA is a professional appraiser who has received a designation from the American Society of Appraisers (ASA) and has five years of full-time appraisal experience. The American Society of Appraisers is a non-profit international organization dedicated to appraisal professionals. To receive a designation, ASAs must pass the ASA Online Ethics Exam, a 15-hour National Uniform Standards of Professional Appraisal Practice, and submit three letters of reference.
Accredited in Business Valuation (ABV)
ABV professional appraisers earn this designation from the American Institute of CPAs, the recognized national professional organization for certified accountants. All ABV credential holders are CPAs and additionally have passed an ABC Examination, fulfilled required business experience requirements and completed 75 hours of valuation-related education credits.
Master Certified Business Appraiser (MCBA)
MCBA is a professional who has received this professional designation from the Institute of Business Appraisers (IBA). IBAs possess post-graduate degrees and a minimum of fifteen years full-time experience as a business appraiser. IBAs additionally must provide three letters of reference attesting to the appraiser’s analytical skills and work product, professional and ethical character and contribution to the appraisal profession.
Mid-Market Investment Banking Designations
Corporate Finance (CF) Qualification
CF professionals receive this designation from the Institute of Chartered Accountants in England and Wales (ICAEW), a world leading professional organization for accountancy, finance and business professionals. CF professionals are certified ICAEW Chartered Accountants or Certificate in Corporate Finance holders who have obtained their Diploma in Corporate Finance from ICAEW and additionally have a minimum of three years of experience in corporate finance.
Certified Merger and Acquisition Advisor (CM&AA)
CM&AA is a professional who specializes in middle market corporate financial advisory and transaction services and who has obtained a designation from the Alliance of Merger Acquisition Advisors (AMAA), a professional group of more than 800 professional services firms that focuses on middle market mergers acquisitions. CMAAs are required to complete a 5-day course covering various in-depth M&A topics.
Chartered Merger and Acquisition Professional (CMAP)
CMAP is a professional specializing in middle market mergers acquisitions who has received a designation from the Middle Market Investment Banking Association (MMIBA). As a prerequisite criteria to obtain CMAP credentials, candidates must be accomplished in business, finance, account, economics or business management demonstrated by either a college or university degree, another acceptable designation or M&A related experience. MMIBA’s CMAP Certification program consists of a five-day Mergers Acquisitions workshop and a four-hour CMAP Certification Exam.
Merger & Acquisition Master Intermediary (M&AMI)
M&AMI is a professional specializing in middle-market mergers acquisitions and received a designation from M&A Source, a professional organization specializing in lower middle market M&A transactions. M&AMIs represent clients in mergers acquisitions, advice clients in valuation and facilitate necessary financing for mergers acquisitions. Successful M&AMI candidates require both educational credits and the successful completion of multiple middle-market transactions.
Designations are not a litmus test to base the ultimate decision of selecting an advisor. They can be useful though in the initial evaluation of professional competency. It is also important to remember that not all designations are equal. Business owners should maintain a level of scrutiny in determining if an individual, regardless of credentials, will help them achieve their desired objectives.