The Alphabet Soup Of Financial Advisory

There are 253 Different Types of Financial Designations. Consider This One.

Why do people spend more time finding a good mechanic or plumber than they do a financial advisor? One reason: The average investor has no idea what the various financial designations mean, let alone the requirements for obtaining them.

It’s important to understand that a designation or title is not the same as a certification or license. The requirements for having a title range from rigorous to nothing. Between Queen Latifah and Queen Elizabeth, only Liz could knight someone. Some titles are just made up and used as marketing tools. This is especially true in the financial-planning world.

The Financial Industry Regulatory Authority (FINRA), which is designed to protect American investors, lists 253 financial designations on its database. These range from Bucket Plan Certified to Registered Financial Gerontologist to Rollover Specialist (I had a dog once who might have qualified for that last one).

Ironically, FINRA’s database does not list Financial Advisor, Financial Consultant, Wealth Manager, or Financial Planner – four of the most common titles you’ll encounter¹. This means there are no standardized requirements (either legal or regulatory) for these titles, and anyone can put them on their business cards². I believe Financial Planner is one of the most misrepresented titles in the industry.

Comparatively, a Certified Financial Planner® (CFP professional) has a college degree, at least three years of experience, has taken eight master-level-type courses, and passed a grueling test (it took me 18 months to earn mine). Being certified or not certified is extremely different.

In other words, all financial designations are not created equal. Some have rigorous standards that must be met and maintained to keep that title. Some encourage investors to verify the status of anyone claiming to hold that title. And some have a formal disciplinary process to handle grievances. Other designations are relatively easy to earn and can be maintained by simply paying a yearly fee. And just because a certain title requires an official FINRA examination doesn’t mean its holder is the financial equivalent of a brain surgeon.

I’m not saying that every CFP is good and trustworthy and beyond this type of criticism. They are not. But it’s a much better place to start.

Fortunately, it’s easy to check an advisor’s title and history. You have three great resources:

• FINRA Professional Designations database: Although FINRA does not approve or endorse any professional designation, this database explains what a title or acronym after someone’s name means. Simply type in the designation, and it’ll tell you if any special training is involved and whether the issuing organization requires continuing education, takes complaints, or has a way for you to confirm who holds the credential.
• FINRA’s BrokerCheck: This resource allows you to search for an advisor by name and supplies a snapshot of their employment history, regulatory actions, investment-related licensing information, arbitrations, and complaints. It also lists brokers who have been barred by FINRA.
• CFP Board website: To find and/or verify a CFP certification, you can use the free searchable database on the CFP Board website. It’ll also tell you if the person you’re considering has a disciplinary history or declared bankruptcy within the last ten years.

Securities offered through Raymond James Financial Services, Inc., member
FINRA/SIPC. Investment advisory services are offered through Raymond James
Financial Services Advisors, Inc. Evans Wealth Strategies is not a registered
broker/dealer and is independent of Raymond James Financial Services.

Every investor’s situation is unique, and you should consider your investment
goals, risk tolerance and time horizon before making any investment. Prior to
making an investment decision, please consult with your financial advisor about
your individual situation. You should discuss any tax or legal matters with the
appropriate professional.

The foregoing information has been obtained from sources considered to be
reliable, but we do not guarantee that it is accurate or complete, it is not a
statement of all available data necessary for making an investment decision, and it
does not constitute a recommendation. Any opinions are those of Mary Clements
Evans and not necessarily those of Raymond James.

Evans Wealth Strategies 1134 Pennsylvania Ave., Emmaus, PA 18049
610-421-8664 EvansWealthStrategies.com

1. FINRA Professional Designations Database, https://www.finra.org/investors/ professional-designations.

 2. While FINRA does not have licensing requirements for these titles, Raymond James does have requirements for all professional designations.