What Is an Accredited Asset Management Specialist (AAMS)?

The Accredited Asset Management Specialist (AAMS) is a professional designation awarded by the College for Financial Planning to financial professionals who complete a self-study program, pass an exam, and agree to comply with a code of ethics.

Successful applicants earn the right to use the AAMS designation with their names for two years, which can improve job opportunities, professional reputation, and pay.

Understanding the AAMS Designation

The AAMS program began in 1994 and is taught exclusively online using the CFP’s platform. The College for Financial Planning (owned by Kaplan) is a financial education provider for working adults in the financial services industry.

The AAMS program consists of 10 modules, starting with a review of the asset management process, and then covers a broad range of topics, such as investments, insurance, taxation, retirement, and estate planning issues.

To keep the privileges associated with the designation, AAMS professionals must complete 16 hours of continuing education every two years and pay a fee. The AAMS continuing education program is developed alongside some of the nation’s top investment firms. Applicants explore case studies based on real-life scenarios designed to prepare them for effectiveness in the real world and help them build lasting relationships with clients.

What Does an AAMS Do?

The AAMS certification is designed to equip new advisors with the information they need to help clients plan for and accomplish their personal financial goals. The specialists help people plan college savings, taxes, and retirement savings.

An AAMS focuses on personal finances, over and above checking and savings account management—asset management, investments, and much more.

How to Attain AAMS Certification

The AAMS certification is granted by the College of Financial Planning, the college that created the Certified Financial Planner certification.

To achieve certification, you’ll need to enroll at the College of Financial Planning. This process is not similar to traditionally enrolling in a college. You select the program from the college’s website, choose your options, and pay for the materials. You’re given an opportunity to choose printed study materials when you’re checking out.

Once you receive your materials, you have 120 days from the day you’re granted access to the online material to complete testing and pass the final exam. You follow the course online—using prerecorded videos, self-study, and printed study materials if you buy them.

The final exam for the AAMS program contains 80 questions. A passing score on the AAMS final examination is 70% or better. The time limit for the final exam is three hours, and you’re allowed two attempts to pass.

The self-study program covers several topics:

• The asset management process
• Investment strategies
• Policy and change
• Risk, return, and investment performance
• Asset allocation and selection
• Taxation of investment products
• Investment opportunities for individual retirement
• Investment considerations for small business owners
• Executive compensation and benefit plans
• Insurance products for investment clients
• Estate planning
• Regulatory and ethical issues.

Once you receive your AAMS certification, you must complete 16 hours of continuing education credits per year and pay a renewal fee of $95 once every two years to maintain your certification.

AAMS vs. CFP

AAMS certification focuses on personal finance, asset management, and investments. It is intended for newer financial planners or planners transitioning from other financial work.

Certified Financial Planners (CFP) are finance professionals certified by the College of Financial Planning to help people plan and achieve their financial goals. A CFP can assist someone throughout their lifetime, helping them adjust their finances to meet changing life events and updated financial goals.

The CFP certification is the highest accreditation available for financial planners, requiring 6,000 hours of professional planning experience within the ten years preceding the certification exam.

Special Considerations

The Financial Industry Regulatory Authority (FINRA) specifies that it does not approve or endorse any professional credential or designation. Still, it does list the AAMS as one of the available designations in the financial services industry. According to the College for Financial Planning (CFP), some organizations recognize the AAMS designation as representing 28 hours of continuing education credit.

The CFP maintains an accessible database of the names of all certificate holders and their status. When AAMS students pass their final exam, they receive credit for completing module FP511 from the CFP course.

The Bottom Line

An AAMS is a financial advisor certified by the College of Financial Planning to advise clients about personal finances, asset management, and investments. It is a challenging course of study for those unfamiliar with investing and assets, but it is also a stepping stone for achieving the highly coveted Certified Financial Planner designation.

What Is Affirmative Action?

The term affirmative action refers to a policy aimed at increasing workplace and educational opportunities for people who are underrepresented in various areas of our society.

Affirmative action focuses on demographics with historically low representation in leadership, professional, and academic roles. It is often considered a means of countering discrimination against particular groups.

Affirmative action programs are commonly implemented by businesses and governments by taking individuals’ race, sex, religion, or national origin into account when hiring.

How Affirmative Action Works

The main purpose of affirmative action is to diversify various parts of society. It is a government-backed policy that was developed to provide inadequately represented groups of people with access to opportunities in academia, the private workforce, and government jobs.

These opportunities include admission to schools and jobs in professional positions, as well as access to housing and financing.

History and Implementation

The affirmative action policy rose to prominence in the United States in the 1960s as a way to promote equal opportunity for various segments of society. The policy was developed to enforce the Civil Rights Act of 1964, which sought to eliminate discrimination.

Early implementations of affirmative action largely focused on halting the continued social segregation of minorities and other disadvantaged individuals from institutions and opportunities.

Despite legislation that outlawed discrimination practices in the U.S., tangible change in the status quo was not immediate.

In more recent years, campaigns have expanded to make organizations and institutions even more inclusive by pushing for greater gender diversity. Newer policies are also aimed at providing more access to opportunities for covered veterans and people with disabilities.

Elements of Affirmative Action

Efforts to stimulate change can take the form of financial assistance such as grants, scholarships, and other support earmarked to help with access to higher education opportunities.

In addition, hiring practices may be structured to require the inclusion of diverse candidates for consideration for job openings. Government agencies may mandate that companies and institutions populate their ranks with a minimum percentage of qualified professionals from varying ethnicities, genders, and cultures.

Failure to meet such requirements could disqualify institutions from receiving government funding or being able to compete for public contracts.

Examples of Affirmative Action

Affirmative action has been put to work since the 1960s, despite lack of progress at times and rulings by legal authorities such as the Supreme Court that have hindered it. Here are some examples of the policy in action.

• In 1965, President Lyndon B. Johnson issued Executive Order 11246. It required that all government contractors and subcontractors expand job opportunities for minorities. It also established the Office of Federal Contract Compliance (OFCC) to enforce the order.
• In 1970, the Labor Department ordered and authorized flexible goals and timetables to address the underutilization of minorities by federal contractors. In 1971, women were included in the order.
• In 1973, President Richard M. Nixon signed the Rehabilitation Act of 1973. It required agencies to submit an affirmative action plan to the EEOC that detailed the hiring, placement, and advancement of individuals with disabilities.
• In 1983, President Ronald Reagan issued Executive Order 12432. It required every federal agency with substantial procurement or grant-making authority to develop a Minority Business Enterprise development plan.
• In 1990, President George H.W. Bush signed the Americans with Disabilities Act. A year later, he signed the Civil Rights Act of 1991.
• In 1998, the U. S. House of Representatives and the U. S. Senate stopped attempts to eliminate specific affirmative action programs. Both houses of Congress prohibited the abolishment of the Disadvantaged Business Enterprise program. In addition, the House refused to allow the elimination of affirmative action in admissions in higher education programs funded through the Higher Education Act.
• In 2022, the Wall Street Journal reported that dozens of major U.S. companies including Apple, Alphabet, American Airlines, and General Motors were urging the Supreme Court to uphold the continued use affirmative action policies in college admissions. They asserted that greater diversity on college campuses contributed to ongoing innovation in commerce and successful business endeavors.

Advantages and Disadvantages of Affirmative Action

The implementation and continued use of affirmative action policies have drawn strong support as well as staunch criticism.

Advantages

An obvious benefit of affirmative action is the opportunities they provide to people who otherwise might not have them. These opportunities include access to education for students who may be disadvantaged and career advancement for employees who may be blocked from rising up the corporate ladder.

Proponents of affirmative action say that the effort must continue because of the low percentages of diversity in positions of authority and in the media, as well as limited acknowledgment of the achievements of marginalized or unrepresented groups.

Disadvantages

Opponents of affirmative action frequently call these efforts a collective failure. They cite as evidence the tiny changes to the status quo after decades of effort. The cost of such programs, coupled with a belief that affirmative action forces the populace to make unwarranted accommodations, drives a significant part of the opposition.

Certain individuals believe that there is little to no bias in society. They argue that affirmative action results in reverse discrimination, which can often lead to qualified candidates being overlooked in academics and the workplace in favor of less qualified candidates who meet policy standards.

Affirmative Action Statistics

Affirmative action is a very controversial topic and often leads to heated debates between those who support it and people who feel it doesn’t benefit society. Is there a way to quantify how people feel and how it’s working?

According to a Gallup poll, more than half of Americans (61%) believe in affirmative action policies. This level of support has increased since the last poll, where only 47% to 50% of individuals thought affirmative action was necessary. This increase in support is especially important, given the active issues surrounding race and identity in the U.S. and elsewhere.

Many Americans feel positive about diversity. They are comfortable with the makeup of their communities, saying diversity positively impacts society as a whole.

There is some divide when it comes to identifying race and ethnicity for purposes of hiring. In fact, about 74% of individuals feel that a candidate’s racial or ethnic background shouldn’t be considered when hiring or promoting them. These activities should only be based on someone’s merit and qualifications.

What is an Appropriation Account?

Appropriation is the act of setting aside money for a specific purpose. In accounting, it refers to a breakdown of how a firm’s profits are divided up, or for the government, an account that shows the funds a government department has been credited with. A company or a government appropriates funds in order to delegate cash for the necessities of its business operations. 

How Appropriation Accounts Work

In general accounting, appropriation accounts are mainly prepared by partnerships and limited liability companies (LLCs). They are an extension of the profit and loss statement, showing how the profits of a firm are allocated to shareholders or to increase reserves indicated in the balance sheet. A company might appropriate money for short-term or long-term needs to finance things such as employee salaries, research and development, and dividends.

For a partnership, the primary purpose of the appropriation account is to show how profits are distributed among the partners. For an LLC, the appropriation account will start with profits before taxes and then subtract corporate taxes and dividends to arrive at retained profits.

Government appropriation accounts come into play when they create their budgets. Appropriation credits are taken out of estimated revenues from taxes and trade and allocated to the proper agencies. Credits in appropriation accounts that are unused may be redistributed to other agencies or used for other purposes.

Appropriations for the U.S. federal government are decided by Congress through various committees. The U.S. government’s fiscal year runs from October 1 through September 30 of each calendar year.

Real World Example of Appropriation Accounts

Investors can monitor appropriations of publicly listed corporations by analyzing their cash flow statements (CFS). The CFS shows if a firm is generating enough cash to pay its debt obligations and fund its operating expenses.

Here’s a breakdown of how Tobacco giant Altria Group Inc. (MO), a popular income stock, appropriated its cash and profits in the nine months to Sep. 30, 2018.

What Are Appraisal Costs?

Appraisal costs are a specific category of quality control costs. Companies pay appraisal costs as part of the quality control process to ensure that their products and services meet customer expectations and regulatory requirements. These costs could include expenses for field tests and inspections.

Understanding Appraisal Costs

Appraisal costs can be a key expense for companies seeking to maintain high levels of customer and regulatory satisfaction. Payments for secret shopper salaries, factory floor inspectors, and technical screening equipment all fall into this category. Companies that spend large amounts of money on appraisal costs show that they are concerned with their reputations.

To prevent defective inventory or products from reaching their customers, companies get creative while incurring appraisal costs to spot suspect products. In the end, it is less expensive to incur appraisal costs than to lose customers who are frustrated by the receipt of low-quality goods.

The Internet and social media now give consumers unprecedented opportunities to voice their dissatisfaction with any companies or products that fail to meet their standards. The threat of unpleasant reviews or viral PR mishaps keeps companies on their toes and investing in appraisals of their products.

Appraisal costs can simply be looked at as part of the cost of doing business as well as the cost of creating a product or service. A company’s reputation is one of the most important assets that it has. Once a company’s reputation slips into the negative after the release of faulty products and bad publicity, it is almost always impossible or extremely difficult to shift consumer opinion.

It is for this reason that management needs to pay strict attention to quality control to ensure the lasting success of their company; appraisal costs are a part of that process.

Examples of Appraisal Costs

There are many examples of appraisal costs and every industry has different types of appraisals and therefore the costs associated with them. Appraisal costs can even be driven by where the industry is in a market cycle.

A classic appraisal cost would be what is spent to inspect materials delivered from suppliers. For example, let’s say a music retailer gets a shipment of guitars from a major manufacturer. Last year, the guitar manufacturer’s first round of guitars had faulty tuners, causing customers to return opened products, file complaints with the guitar store’s corporate parent, and in some cases, switch their loyalty to a different music retailer.

So this year, when the new shipment of guitars comes in, the music retailer opens the boxes, inspects each guitar to make sure the tuners are in good shape, and then repackages them before making them available to customers. This process costs money and time, which is accounted for on the balance sheet as an appraisal cost.

Other examples of appraisal costs include:

• Inspecting work-in-process materials
• Inspecting finished goods
• The supplies used to conduct inspections
• The inventory destroyed as part of the testing process
• Supervision of the inspection staff
• Depreciation of test equipment and software
• Maintenance of any test equipment

The next best thing to incurring appraisal costs includes working on increasing the quality of the production processes of all suppliers and the company itself. The idea of vendor and supply chain management seeks to improve the entire process so that it’s inherently incapable of producing defective parts. Like a final product, suppliers need to ensure that their raw materials are in good condition, or else they risk losing supply contracts with the final producer of a good.