Certified Divorce Financial Analyst (CDFA): Meaning, How it Works

What Is a Certified Divorce Financial Analyst (CDFA)?

A certified divorce financial analyst (CDFA) helps couples and their attorneys achieve equitable divorce settlements using knowledge of tax law, asset distribution, and short- and long-term financial planning.

A CDFA can provide in-depth financial analysis and advice to attorneys and couples relating to the divorce.

CDFAs are required to have several years of relevant experience and pass an exam designed by the Institute for Divorce Financial Analysts (IDFA) to receive the designation.

Understanding Certified Divorce Financial Analysts (CDFAs)

The best-case scenario for two people divorcing is that it’s amicable and both parties agree on the division of assets. In such cases, they might need a neutral mediator to help with paperwork. Some divorces that don’t involve property, retirement accounts, children, or large sums of money might even be completed by following a few simple steps online.

However, divorce after many years of marriage almost always requires the hiring of two attorneys—one to represent each party. Court dates, attorney meetings, and negotiations all add time, and time means a whole lot of money for the attorneys. Hiring yet another professional may not be ideal, but some situations call for a CDFA.

The IDFA points out that conducting a financial analysis early in the divorce process can save time, which in turn saves money.

Information provided by the clients and their attorneys is used to analyze proposals for the division of assets, alimony, custody, child support, and other issues. CDFAs can then project the financial impact of a proposal in the short and long term and formulate various options. They may even give absolute values to assets that are under- or overestimated.

CDFAs are best at providing advice for:

• Valuing assets and debts
• Valuing the marital home
• Dividing retirement and pension accounts
• The amount and duration of alimony
• Tax implications of alimony and property division
• Setting up a budget for life after the divorce

Certified Divorce Financial Analyst (CDFA) Qualifications

CDFAs go through a rigorous process to become this type of professional. They must have a bachelor’s degree with three years of on-the-job experience or—if no bachelor’s degree—five years of relevant experience.

Candidates are required to pass an exam designed by the IDFA. There are currently four methods of pursuing the CDFA certification: exam only, self-study, self-paced eLearning, and virtual classroom.

To retain the CDFA designation, holders must also obtain 30 hours of divorce-related continuing education every two years.