Looking Beyond Titles And Credentials

In your search for expert help, you will come across a variety of job titles, including not only the title "financial advisor" but also titles such as financial planner, financial consultant, or even account executive. However, it's important to keep in mind that anyone can use generic titles such as these, 

regardless of his or her training or education.

You may also find yourself adrift in what has been called an "alphabet soup" of credentials—CFP®, CPA, CFS, and CSA, for example. Focusing on advisors who have credentials is usually a good idea because having a professional designation suggests a commitment to the field based on some combination of work experience, formal study (including passing qualifying exams in their field), and continuing education.

No professional credential or job title can guarantee the quality of an advisor's services or ensure that your needs will be met. Moreover, the primary interest of some advisors may be to sell you a particular financial product rather than to provide impartial guidance. So, in your search, look beyond job titles or credentials by gathering other information to ensure that the advisor you choose will be the right one for you.

Most financial advisors come to planning from a sales job. One of the first things the good ones learn is to leave their sales hat at the door.  

The following explanations will help you thread your way through the best-known professional credentials and the types of advisors who may hold them (and some may hold more than one): 

Certified Financial Planner™ (CFP®)

This designation is awarded by the Certified Financial Planner™ Board of Standards to individuals who have had at least three years of work experience in the financial planning field, completed an approved course of study, and passed an exam. The training of CFPs, which focuses on financial planning, includes taxes, investments, retirement planning, estate planning, and insurance.

Certified Funds Specialists (CFS)

This designation is for financial planners and investment advisors who focus more on investments using mutual funds. The CFS designation indicates advisors who are qualified to consult with clients on the advisability and costs of acquiring or retaining mutual funds in their investment portfolio. To qualify for the designation they must complete six ten-hour educational modules provided by the Institute of Business and Finance on: Investment Companies; Fixed-Rate & Variable Annuities; Wealth Management & Performance Measurement; The Planning Cycle; Strategies; and Asset Allocation.

Certified Public Accountant (CPA)

Business accountants, some of who specialize in personal tax planning and preparation, hold this designation. To qualify for the CPA credential, they must pass a two-day examination administered by the American Institute of Certified Public Accountants (AICPA) and meet state licensing requirements relating to work experience and, in most states, special academic work.

Certified Senior Advisor (CSA)

The Society of Certified Senior Advisors offers this designation. The Society is dedicated to providing initial and continuing education about key senior issues to professionals serving the senior market. This program provides participants with the tools they will need to communicate more successfully with their senior clients.

Advisors serving seniors need a credible source of information and access to training from recognized experts in senior issues. Senior citizens require advice and services from professionals who are thoroughly educated about issues that are important to seniors.  Certification is awarded upon successful class completion (21 instruction hours) followed by an exam.

Chartered Financial Analyst (CFA)

This designation is awarded by the Association for Investment Management and Research to investment professionals who have worked in the investment industry for three years and have passed each of three yearly exams involving security analysis and professional money management.

Many mutual fund managers and security analysts have this designation.

Registered Investment Advisor (RIA)

This designation is neither an indication of expertise nor a license to buy or sell securities. It merely indicates that an individual, or his or her employing firm, was required under federal securities laws to file (for a nominal fee) with the Securities and Exchange Commission or a state securities commission for a license to dispense investment advice.

Registered Representative

Securities brokers who have passed mandatory basic exams given by the National Association of Securities Dealers, a regulatory body for the securities industry, hold this designation. Securities brokers recommend investments for clients and execute client orders to buy and sell securities such as stocks, bonds, options, and mutual funds. In other words, it’s a sales license to sell variable insurance and mutual funds.